Your heart sinks as you enter your financial advisor’s conference room. You see the big binder sitting on the table in the spot reserved for you. Fifteen minutes into the meeting, your eyes glaze over from all the charts, graphs, questions and financial jargon. You begin to question why you decided to seek out financial advice.
If this has been your experience, it doesn’t have to be that way! Financial planning can be made more understandable, engaging, and maybe even fun if you’re able to do it “bite-sized” chunks and at a pace that works for you. Having the professional guidance of a financial planner who really focuses on you as a unique individual – working to understand your values, goals, wishes and needs, can be a great experience. Here are seven keys to client-focused financial planning that may help you see things in a new light.
1. Financial planning should leave you feeling optimistic and informed.
Meeting with a financial advisor to review your financial situation can evoke all kinds of fears and prejudices. Have I been wise with my money? Should I have spent less and saved more when I was younger? These are tough but natural questions. It can be difficult to sit across the table from an “expert” and not feel judged. Your financial advisor should be kind, thoughtful and empathetic. Good financial planning should never leave you feeling inadequate. Would you keep going back to the same hairdresser if every time they kept styling your hair it was difficult to maintain?
2. It’s personal (and different for everyone).
Do I need life insurance and if so, how much and what kind? When should I start Social Security? These are all good questions and there is a time and place in the process to answer them. But first your advisor needs to understand you, your values, needs and goals. Good financial planning involves more listening than talking. It’s about understanding where your ideas about money came from, and what beliefs (even fears) you hold about it. It’s about how you make decisions based on your values and beliefs. It is coaching to help drive you to the best outcomes for yourself. When you engage with a financial planner, you shouldn’t pay for advice that isn’t tailored to you and doesn’t meet your needs.
3. Insights abound.
Good financial planning should create excitement for your future. It should unlock doors to new possibilities, even when that requires tough choices. It’s your future – you should be in the driver’s seat. Dictate where you want to go and what goals you want to achieve. Your advisor should be your guide on the journey.
4. You are unique.
You are unique and your individual situation is as well… individual. Good financial planning takes into account your values and passions, your concerns and unique circumstances, your preferences. Good financial planning should take into account your life changes to be flexible and adaptable and to grow and change along with you. One-size does not necessarily fit all.
5. Break it down.
Financial planning should be modular and easy to understand. It should not be a big, fat binder with 100+ pages of charts and analyses. To make good financial decisions, you, as the client, need to understand how all your resources — financial, personal and emotional — fit together to create the unique story that is you. Good financial planning breaks down the complex puzzle that is your financial life into digestible pieces that you can understand. You didn’t become an expert in your career overnight, you should not expect your financial plan to be crafted in a couple hours.
6. Make it simple (and understandable).
Have you walked into your financial advisors’ office and heard them say “We’ve built a portfolio for you on the efficient frontier to maximize your potential return given your targeted risk profile.” Plain English, please! There’s a lot of jargon and complex topics in the financial world. When conversations are filled with jargon they often leave us feeling frustrated and overwhelmed. They sound like English but feel like gibberish. When your advisor takes the time to learn about you and your “money scripts — these are the thoughts we grew up with around money, attitudes (often your parents’ attitudes) history, and biases — often complex topics can be discussed in relatable terms. This is your plan, your goals and your life.
Good financial planning explains complex topics in simple and easy to understand language throughout the entire process. The discussion can be as simple or as in-depth as you, the client, want it to be. The goal is to ensure you gain the knowledge you need at the pace you want so you understand how all the pieces of your financial life fit together.
7. Manage, partner, or both.
You can continue to manage your assets and still receive comprehensive financial advice tailored to your needs and goals. Some people want to manage their own assets but may become overwhelmed by all the other decisions in the financial planning process. They want a guide to help explain the complexities of the financial decisions they need to make. Good financial planning should not require your financial advisor to manage your assets. You should be able to get the former without giving up the later.
Are you read for a different type of financial planning experience?