“Things are not always what they seem; the first appearance deceives many; the intelligence of a few perceives what has been carefully hidden.”
The Athenian aristocrat, Phaedrus, made this quote in the 5th century BC. The fact that it’s survived intact for over 2,500 years suggests that it still describes how we understand the world today. The relevance of it will be revealed as you continue to read – hopefully proving its own point – but I’d like to start by looking at the recent history of Financial Planning…
Choices, Priorities and Compromises
If we cast our minds back about ten to fifteen years, many Financial Planners worked in a different way from now. We were more like salespeople, and the focus was on selling products and investments. This suited the climate and the market at the time.
Over the years, Financial Planning as a profession evolved. Responding to demand from clients and adapting to the attitude of investors, our focus shifted from a product-based offering to one of lifestyle financial planning. This was a totally new idea and approach. It linked the financial plan and investments with clients’ personal ambitions, encouraging them to enjoy the time they have on this earth and reminding them that it’s pointless being the richest person in the graveyard.
There is still much that is valid and valuable in this approach, but like all ideas in a rapidly changing world, if it doesn’t adapt, it runs the risk of becoming less relevant and not reflecting the times we live in. For example, being invited to choose the vineyard you plan to retire to or the next yacht you’re going to hop on to sail off into the sunset can seem a bit far removed from the realities of most people’s everyday life!
For most of us, our lives are about priorities, difficult choices and considered compromises. We’re constantly juggling the demands of our families and careers, making choices about where and how we live our lives, and often our decisions are a trade-off between a number of competing demands. In these circumstances, our job as Financial Planners is more about helping our clients consider the big issues in a way that helps them identify exactly what it is that matters most to them.
Hearing, Not Just Listening
And this is where we come back to our friend Phaedrus. What drives and motivates our clients and genuinely matters to them in their lives might not always be immediately obvious. Getting to it takes careful questioning, and hearing what they are saying, not just listening to the answers they give – there is a difference. As planners, we have a duty to ask clients the right questions in the right way to get to this information. We want to allow them to see the whole picture and, in some cases, to help unearth information or a new perspective on their situation that they hadn’t even considered themselves. It’s a vital part of building a meaningful relationship with them that will hopefully serve them well for many years to come. We appreciate that this is often easier said than done, but this needs to be a key focus as the profession evolves.
Our first step on working through this new thought process was to go back to our records and look at the type of queries our clients originally raised, their primary concerns and their most pressing preoccupations. These could be on anything from the performance of their investment portfolio to taking tax-free cash from their pension; from their children’s school fees to their projected retirement date. We revisited many of our original client fact finds and files until we had a list of the top hundred issues. As we then delved into these further, we started to see four common strands clearly developing. We turned these into four key questions for clients to ask themselves:
- Am I going to be ok?
- Is my family going to be ok?
- What do I want to do with my life?
- What do I want my legacy to be?
These are the four key areas that we will now encourage our clients to focus on when creating their financial plans. We’ve now built an app, Life Goals®, where clients can give us some more detail for each question about their own circumstances and competing priorities – click here to try it. This means that they can start to think about the important things in their lives and what they want to achieve before we meet, and our conversations have meaning from the get go. The aim is that from this very simple starting point of four questions, we can uncover everything that matters most to them in their lives. It will be important to ask these questions again over time to take account of the shifting priorities and changing circumstances that all of us experience during our lifetimes.
The Next Step for Our Profession
As I mentioned earlier, if an idea doesn’t evolve there’s a danger it will become obsolete. Just as I feel our approach to serving clients continues to adapt to meet their real-life demands, the financial planning profession is ready for the next step in its own evolution. At First Wealth, we see it as our responsibility to be figuring out how we and practices like us can take the next logical step forward.
As our profession embraced the softer approach of lifestyle-based financial planning, in some quarters this also ushered in a mindset where profit was a dirty word and striving for success was deemed unseemly. It would be unthinkable for the great businesses of this world not to have revenue and profit targets. And yet it has become fashionable for some financial practitioners to talk in this way.
We have always been unapologetically and unashamedly focused on growing and expanding our business. Our mindset has always been to deliver the highest level of financial planning and ongoing support to our clients. The marketplace for financial planning is now sufficiently mature for clients to have real choice about the services they require and the fees they are willing to pay for them. If clients perceive value, they will be happy to pay a fee. If they don’t, they will seek alternative solutions.
We, and many practices like us, blend the vision of lifestyle planning, the science of behavioural economics and our knowledge and experience of wealth management to provide a genuinely innovative offering for our clients. If we don’t look to scale up our businesses and take this unique blend to the next level, there’s a danger we will be left by the wayside like a cottage industry.
In building this new framework to guide and help our clients in discerning what matters most to them, we are taking this step up to the next level. We aim to take this innovative offering and making it scalable. The more we can grow our business, the more advisers we can train for the future. The more advisers we can train, the more people we can help achieve their goals. For our profession, for First Wealth and most importantly for our clients, it’s all about what matters most.
If you would like to discuss how we can help you achieve what matters most to you, please get in touch. We’d love to hear from you.