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Financial Planning > Behavioral Finance

Planning (And Not Selling) Your Way To Success

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While the financial services industry is old, one of its children, “financial planning,” is quite young–a teenager, in fact. And, the business of financial planning shares many of the qualities we associate with teens: confused about where it’s headed; unable to choose from the many paths available; trying to find itself; unsure of its own identity. We are standing at the doorway of opportunity, and yet we don’t recognize it.

The Harsh Truth

Like many of you here today, I have been in the financial services industry for a long time. But, it wasn’t that long ago that I started calling myself a financial planner, at least with any conviction. It’s not surprising that the media, the public (a.k.a. our clients), and those who would “regulate” us don’t know what to make of us–we aren’t even sure ourselves. That may sound harsh, but it’s true.

And sorting this out may be the most important thing we do in the decade ahead. Let me just say this emphatically–and this is the most important thing I’m going to say all day–there is nothing that will propel you forward faster than clarity about what you do, what you want and who you are.

I’m not here to tell you those things. But I hope that by sharing my enthusiasm for the path I’m on, I might ignite a spark in you and lead you closer to your own true calling in this wonderful industry.

Logic certainly suggests that we should not focus on financial planning. Consider some of the reasons: It’s time consuming, the average plan gobbles up between 2 and 6 hours of my time, sometimes more, and I do this for free. Maybe I should charge? But how much? If I charge what it’s worth, who will buy it? And do I really want to be in the same camp as lawyers and accountants, billing for my hours?

The learning curve for most financial planning software is steep. And I assure you, once you master a particular package, a new, better one will come along. And, really, the money comes from elsewhere, doesn’t it? It comes from product sales. So why bother with planning at all? Here are some of the usual reasons we consider planning:

(1) Clients are demanding more. Damn them! Always demanding!

(2) It’s a more complex financial world. Can’t deny that!

(3) Maybe planning will generate more sales.

(4) Maybe planning will generate bigger sales.

Look at these 4 reasons. I would label them as 1. Have to. 2. Have to. 3. Selfish. 4. Selfish.

Here’s the best reason: To answer the burning questions. All clients have similar burning questions. These are the questions they want answers to. Of course, they won’t likely ask these questions. But they’re there. And they are in this form:

Do I/will I have enough to _________________?

Am I making the right/best choices?

What if I _______________________?

Focus on answering these questions, and nothing else. Some might call my idea here the “slow motion business model.” The strategy is remarkably simple. Don’t focus on making money. Focus on helping as many people as you can in the most profound ways you are able.

It’s important to point out here: People don’t want a financial plan. And if you somehow misunderstand something I say and leave here believing that you should focus on “planning” that would be a sad mistake.

Sales versus Planning

The fundamental difference between the “traditional” sales approach and the “planning” approach is a shift from using fear to using hope. In many ways, fear is an easier tool for us to use. It’s how many of us have been trained. Fear motivates. So we look for problems, shortfalls, risks. And fear leads us to solutions.

But people aren’t really looking for motivation. They are looking for inspiration. We all are. We want to know, “Can I do whatever it is that I imagine?” And hoping that in fact we can, leads us to possibilities.

Planning starts with a vision of how you want your future to look like. No matter how impossible you may think it to be, this is the starting point. From this vision and your “starting point (net worth, etc.), we create a financial plan–a roadmap to the vision.

From this will come specific goals: how much to save each month, what rate of return will be needed, etc. And from this will come specific decisions: what can we do now to move us in this direction. We might not yet believe we can get there, but at least we are moving towards it.

And while I have depicted this on a top-down model, in truth this is a cyclical endeavor. You start with the vision, but once you reach the stage of decision-making, you may alter that vision. Most, of course, will assume that means “shrinking” the vision–capitulating to your present circumstances, hence once again moving back to the upside down model.

No. Hang onto the “big vision.” Just see this circle as spinning and growing–growing outwards towards a bigger vision. In fact, the vision you set now will most likely one day be proven too small.

Many of these items will meet with universal agreement:

? Set or clarify goals. Sure, that’s at the heart of any planning exercise.

? Determine present situation. Sure, you can’t go from A to B without first knowing where A is.

? Map possible route(s) to the goals. Sure, that is exactly what the charts and graphs are supposed to show aren’t they?

But now it gets contentious.

? Build belief. Huh? This is, I believe, the main reason to use financial planning. It is the main goal of financial planning. It should be the most fundamental outcome. And, yet, we never talk about it. If someone has a goal–and they truly believe it will be achieved–a plan is pretty much not needed. If someone has a wish, it needs to become a goal. And a plan will help that happen.

We need to bring things down to the level of understanding of the client. And for most clients, that mean simplifying. An important goal, then, of financial planning is to simplify: to help clients understand where they are, and how to get where they want to go, step by simple step.

Finally, we need to inspire. This isn’t so much a goal of planning as it is an outcome. In fact, it’s the ultimate outcome. It’s the acid test of the plan. A good plan almost instantly inspires.

A plan that simplifies, articulates clearly the client’s goals, and shows that those goals can be reached by following simple, achievable steps, will automatically inspire.

Life is about experiences, not about numbers. The more you can help your clients see clear pictures of the goals in front of them, the more inspiration you will help them find, and the more they will be eager to take action. In fact, you will find it hard to slow them down.

Financial planning has allowed me to consistently exceed the expectations of my clients. They literally say things like, “Wow, I wasn’t expecting you to do this much work. This is fabulous. Thank you!”

The financial plan becomes an easy point of reference in the future. Review meetings aren’t focused on investments; they focus on the plan. What has changed? What’s current net worth? Are we on track, and, if not, how seriously are we off track?

Unsolicited Referrals

I don’t do any marketing. I never ask for referrals. And yet, for the past 6 years or more, all new clients come from unsolicited referrals. I recently had a call from a prospect. She told me that she had been referred by friends who had recently become clients of mine. She excitedly told me how happy they were with the financial plan and strategies we had prepared and said, and I quote exactly, “we want some of that.” That, of course, is inspiration.

I didn’t invent these ideas, of course. I’m just trying to tap into some universal laws. I’m trying to build positive, productive, human relationships with people. Our target clients are simply people I can help, who want to be helped, and who will be enjoyable to work with. That’s it. And it’s fun.

Perhaps Henry David Thoreau said it best in Walden, when he wrote, “If one advances confidently in the direction of his dreams, and endeavors to live the life he has imagined, he will meet with a success unexpected in common hours.”

I believe this. And I believe that by helping people to use the excellent planning tools at our disposal, we can help our clients to believe this too.

William Bell, B.Math, B.Ed., RHU, CLU, CFP is the founder and president of , Aurora, Ontario. You may e-mail him at . This is an abridged version of a presentation he gave at the MDRT annual meeting in Toronto.


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