Recently stock market rallies have pushed the major indexes above key psychological levels. For the Nasdaq, that level is 2,000 and for the S&P 500, it’s 1,000. We’ve come a long way from the dark days of last year.
Economic indicators suggest the global economy is stabilizing. The financial dark cloud of the Great Recession may indeed be lifting. It’s given investors some renewed optimism. I’m reminded by this improving economic climate that no matter how dynamic markets are, the core principles of providing quality client-centered financial advice never really change.
I spoke with Roger R. Bell, president of Roger R. Bell & Company, Inc. in Dublin, Va., to get his thoughts on the immutability of financial planning. Here are four timeless tips that can help deliver long-term client relationships:
1. Peace of Mind
Your client’s need for peace of mind does not change regardless of market performance. Bell Bell uses a structured method of active listening to determine a client’s goals and desires. Planning relieves anxiety.
It takes a trained ear to hear what is really important. Bell’s touchstone is to focus on why he does financial planning in the first place. It’s about helping clients get what they want out of their lives.
2. Holistic Planning
Money is an equalizer. Wealth is a means to an end, not an end in itself. Clients’ true goals and desires can be a mystery to them. They may think they are self-aware, but they may not actually have a clear, concise understanding of their tolerance for risk and their real life goals.
It takes time, focus and alertness to empathically listen to clients’ ambitions and hear the subtext of what they are saying around money issues. Bell’s analogy is oatmeal cookies. If you take the shortcut and melt the butter in the microwave, the cookies turn out thin. Folding the butter into the batter by hand allows the cookies to rise. If a planner tries to speed through the “soft” bits of planning, their client relationships will be likewise thin.
3. Plans are Magical
Bell expresses it this way: there is an inherit power in planning. Planning makes dreams come true. Financial plans create energy that is otherwise missing. Lack of planning causes disorientation, entropy and anxiety.
Regardless of market conditions, financial planning, like magic, makes things better than they would otherwise be. Plans become self-fulfilling prophecies. How cool is that?
4. Capacity to Invest