The 4 Questions That Reveal What Clients Really Want

This person doesn’t need to beat the market or make a huge amount of money. They want to make sure their nest egg is protected. This is a conservative investor. 

“We have an industry that’s almost 100% focused on some goal, when about 100% of people don’t actually use goals,” so you’ve said. How do you apply that to working with clients?

It’s kind of funny that when we do goals-based financial planning, the majority of people don’t have written goals and aren’t really goals-driven in the traditional sense.

Most people may not be able to give you a good answer about what they want 20 years from now. 

Even if they have one, what people think they want at retirement doesn’t usually play out that way: Humans aren’t good at predicting what they’re going to think and how they’ll feel in the future.

What should people consider, then, instead of a specific goal?

It’s silly to think you know the age at which you’ll retire. What you want to talk about is that if you retire, what would you want to do? And why do you think you would retire one day? That’s the conversation.

When it comes to human-centered financial planning, you say to “embrace change.” Please elaborate.

Embracing change is understanding whatever plan we put together we’ll be modifying in the near future. So we reassess and change plans. 

We want to make sure that people understand that we’re making decisions today but that those things may be completely disrupted and changed in the near future.

So that won’t be a shock to them. It’s part of financial planning.

What’s an example?

If you’re saving “X” amount of dollars, and your job changes next week, your [savings amount] may change as well. 

Or if you’re doing the maximum contribution to your 401(k); but then all of a sudden, there’s a family health disruption, and your life changes. That’s a major change.

We know the road to move us to a place we want to go will change. And that’s OK because life happens.

You yourself suffered a serious accident when you were 27 and landed on the injured list for the next six years. You’re 57 now. Were you able to work during those years?

I worked out of a room over my garage.

How did the accident happen?

I wrestled in high school and strained my back for many years. One day I had a strange, awkward bounce on a trampoline. I thought I needed to stop, and I did. 

But [the injury] got progressively worse. A few months later, all of a sudden, I couldn’t get off the couch.

It was a severe back injury. I could walk OK, but I couldn’t sit at all or stand for a long period of time.

I had to figure out how to function without bending over. There are still constraints, but you just learn to live with them.

Right now, I’m in my office at a standing desk and beside me is a huge beanbag and a big recliner. That’s pretty much my office. [But he’s able to work out at a gym and play tennis and pickleball!]

So clients need to know that changes can disrupt financial plans. 

You were a branch manager at Raymond James for many years. Why did you leave the firm?

I was an advisor for the first few years and then had my branch for about 23. 

I became an RIA, a fiduciary, and went fee-only because that’s the business model I felt most comfortable in. 

Also, I have a separate company, Advisor 2X, a substantial outside business of hosting conferences and educational events. It’s separate from my practice. 

But we work with financial advisors; and from a compliance standpoint, I wanted to make sure [the two companies] were totally separate. That’s much easier if you’re in the fee-only world [versus under Finra regulation]. 

When working with advisory clients, the issue of longevity will arise. If you create a plan that goes up to age 90, say; but as the client nears that age, it looks as if they might live to 100, do you change the plan and the types of investments?

We don’t ever assume anybody is going to die at a particular age and plan out just enough money to make it to there — 90, for example.

Clients tell us, “There’s no way I’m going to live that long.” But there they are at age 95. 

They can believe what they want to believe, but I’m going to have to play the numbers.

There’s a chance they’ll hit 90 or 100, so we’re going to plan for that. I have a fiduciary responsibility, and we’re going to consider that you may live to 100.