The real risk is not reaching your goals, especially if there is no clear plan to get there. Performance won’t matter, asset allocation won’t matter, and the best products won’t matter if clients don’t reach their goals. Do you do goals-based planning with your ideal clients? A big challenge for people is to clearly define their future on paper. A crucial role of a financial advisor is to help their ideal clients get a deeper sense of clarity around their future. So how do you do that? In my workshops with financial advisors, I ask two questions in relation to their own personal goals. First look at the list below and tell me how many goals you personally have? The answer is usually 5 or more, and about a third of the financial advisors have 8 or more. The next question is a little more obvious. How many goals clearly written out, are you getting now from your ideal clients? The answer is typically 1-3 goals. There is the opportunity with ideal clients and prospects! Get more goals on paper with your ideal clients. Share your personal goals and dreams and help others get a deeper sense of clarity around their goals for their future.
Start with goals
How many goals do you get from your clients? Besides the major retirement goal, do you get other clients goals such as family or parents healthcare, home renovations or changes, education, estate planning, gifts donations or charities? A typical advisor gets less than 3 goals while client driven plans get 6 or more goals. Looking at the goals list below, how many goals can you check off?
Goals-Based Planning Exercise
____ Lifestyle – Retire / slow down / part time
____ Debts- Debt reduction-debt free
____ Education – Children / Self
____ Vehicles – Cars / Boat / RV / collector
____ Major purchase – Vacation property / Lifetime Trip
_____ Travel -Vacation property / Trips / bucket list
____ Health care – Family members / personal health
____ Home – Reno’s / Upgrades / downsizing
____ Celebrations- Weddings / birthdays
____ Estate- legacy- family-wishes
____ Gifts- donations / charitable involvement
____ Bequests – Philanthropic goals / legacy
____ Care for someone – elderly / family
____ Business – Investment / opportunity
____ Career – education / changes / courses
____ Memberships / Hobbies – golf or sports clubs / groups / collections
Whenever I share this list with advisors in my workshops, they usually add to the list. Go ahead, make it your list and put it in front of your clients and prospects and ask them this question” looking at this list, is there any goal that jumps out to you that you have been thinking about?”.
What data is missing?
I hate factfinders, they are painful and boring and are not engaging. Finding out their personal income by finding out more than one goal will help you gather the information. If you get more than 6 goals from a client, you are well on your way to gathering critical financial planning information. However, what sometimes missing in financial plans are life expectancy, personal health information including smoking, net worth and other assets or liabilities list such as business assets or liabilities, stock options and deferred compensation options. What risk data or software do you use and does it include insurance risks such as life and disability insurance, long term care needs and longevity risk along with market risk and inflation risk.
What do your clients expect?
While clients may feel confident in the value you deliver, and what they pay for the value, delivering more will eventually become commonplace. As Warren Buffet said” Price is what you pay. Value is what you get.”. What is a quality financial and investment plan? What is the value of having a quality financial and investment plan? How often do clients want their financial and investment plans updated or discussed? These are great questions to ask your best clients who are paying thousands of dollars to you and your firm. Some advisors and clients do not see the value of having a quality financial and investment plan. The days of drafting a large financial plan consisting of 30-50+ pages and then putting it on the shelf and never looked at again may be over.
What does a quality financial and investment plan mean to you?
This is a great question to ask your ideal clients, your staff, your own family members and most importantly, yourself. Start by defining what a quality financial and investment plan means to you. Is it comprehensive? Is it coordinated with other professionals? Clients want to know, am I going to be ok and meet my goals, and am I on track. Delivering these answers is not easy, however, can become easier with a quality financial plan. The real risk is not reaching your goals, especially if there is no clear plan to get there. Performance won’t matter, asset allocation won’t matter, and the best products won’t matter if clients don’t reach their goals.
Quality financial and investment plan
One final comment. In my workshops with financial advisors, I always ask a veteran advisor, “in twenty plus years, how many quality financial and investment plans in writing have you seen from your competitors?” The answer is usually less than 5 quality plans in 20 years. My mission is simple, “Coaching financial advisors to create 1 million quality financial and investment plans for their ideal clients”. Ask your clients and prospects this question ” What does a quality financial and investment plan mean to you? Let me know if I can help you grow your practice.