It’s time to practice what we preach

Are youone of the 54 per cent of financial planners that do not have a structured financial plan?

In my experience, speaking to and coaching financial planners over the last couple of years, I have found that more than half do not have a basic financial plan and even less use the services of an external financial planner.

This may not seem extraordinary to you, but should this information become known to the broader population, specifically your clients, they may well question your commitment to your profession of financial planning and the opportunity it affords to take an objective view to not only your future, but also theirs.

We all know mechanics have the clunkiest cars on the road, plumbers have leaky taps and painters never finish painting their own houses. So should the analogy follow that financial planners’ personal financial plans are also in the most parlous state? The sad result of the matter is that in so many cases this is a fact.

I maintain that a financial planner’s lack of action in relation to their own financial plan is based on a lack of skill in determining their true ‘values-based’ goals. It is all very well to say, “I want to pay the mortgage off by 2010”, “I need to buy a new car next year”, or “I want to take the family on a holiday to Disneyland”.

Consider those statements. We have been taught over the years that goals have to be S.M.A.R.T — stated, measurable, actionable, reachable, and time-framed. Every one of the goals listed meets those criteria, however, every one is also a needs-based goal rather than a values-based goal.

To establish value-based goals, it is important to be able to identify your personal values — those intrinsic elements that determine how you want to live your life and what you want to do to ensure you have a truly fulfilling life.

Your goals then signpost the direction you’ll take in your life that will reflect your values. From there you can establish the strategy or actions you will take to achieve those goals. What follows is a lifestyle oozing with personal satisfaction and fulfilment, rather than a shallow life that is just filled with all the trappings.

A focus on your own lifestyle choices aligns with the industry-wide trend to move towards providing holistic advice and lifestyle planning for clients.

As financial planners, you are in the hot seat when it comes to being a role model and demonstrating to your clients how they too achieve a lifestyle they will love, and that money is just one tool in that bigger picture.

There is such a plethora of information available to your clients, not only in relation to the investment options open to them, but also financial planning models that discuss asset weighting and risk determinants, there are financial calculators to measure their mortgage, their wealth, their budget and their debt.

You may argue that your role is to cut through all that hype and jargon for them, to make recommendations for them because all the information out there is too overwhelming for them to get their head around.

Get real! If that is the case, think again about the future of your business. Just providing the “2 + 2 = 4” model or the “if you do this, this and this, you will get that, that and that” model, you are an endangered species of genus ‘financial plannus’.

Your role has evolved and it is time all planners took on the big picture project of lifestyle planning and recognised that finances are just a small part of it.

At the 1994 FPA convention in Perth, keynote speaker Phil Ruthven forecast the future trend in occupational choice would be in personal services and that in 10-years, we would be outsourcing all the things considered chores in 1994 in order to live the lifestyle we would enjoy.

Today’s client is more savvy, more informed, and more astute than ever before. Spend more time with them in conversation about their goals. Ask more artful questions that will reveal the deeper layers. Talk to them about their life values, and then plan with them the strategies to achieve the lifestyle they really want to achieve.

However, lifestyle planning does not mean you are suddenly a charity either. Charge them for the advice, or by the hour or a performance fee, or charge a percentage of the asset or the profit of the project, just as you do now with a percentage of funds under management. You will be paid your worth.

You will become more attractive as a trusted adviser and attract clients to you who are your ideal fit for the type of client you want in your practice. Understand that the traditional financial plan will for now still be an integral part of the new lifestyle plan but you will be building a stronger client base of more motivated, more satisfied clients and what follows is also a stronger referral base.

A word of warning. As the old cliché says, ‘practice what you preach’. You cannot pretend to be a lifestyle financial planner without putting the effort into your own lifestyle planning.

If you have such high expectations of your clients that they should be able to unfurl their life map before you, think about how you would go facing your own financial planner.

For over 15 years, JennieMurray has worked as aplanner, professionaldeveloper of planners anda coach to planners.