Many of us have seen the dress that is gold and white, or maybe it is blue and black. Who knew that color was not absolute?
Color is not the only thing that is a variable. Most of hopes, fears and expectations are ours alone. Goals and visions can be shared but not easily. Our experience and knowledge define us and as a result, we are truly unique.
It is surprising that we can communicate and share deep thoughts at all.
We each have our personal way of understanding the external environment. We believe we know what we need, but that belief is likely overvalued. Some of what we know is wrong. Some of it is obsolete. Crucial pieces are absent. We often grow impatient and guess.
Our best approach is to recognize that we have no lock on “right.” Our idea of right is conditional on our history. Given a different history, right could be different. We are wise to assume that there are no absolutes that we can all agree upon.
The inability to understand fully outside one’s own experience is a flaw when dealing with financial advisors, especially ones developing plans. Your reality and their reality regarding “right” are different. Possibly only a little, but different nonetheless.
Clients must defend themselves from the tendency to end with a plan that is not truly their own. They can do so by expending more effort developing their vision for their life and the financial part of it.
In all cases, the client should be fully responsible for three things. The vision, a serious attempt to communicate it, and the resources to implement.
Before implementation, the advisor has responsibilities.
- To be sure the client has considered all of the things that are to be included in a financial vision,
- To address inconsistencies and contradictions within the vision
- To find tools that provide an efficient, solution to the vision given the resources.
- Acquire a decision to implement.
The advisor has other responsibilities after implementation.
- Review and suggest revisions to suit new realities,
- Continuing education of the client
- Keep the client focused on the long goals.
You cannot “create” a successful financial plan. All successful financial plans evolve. You cannot be hasty, impatient, or careless.
The gradual completion of the task exists because of the unknown space between what the client knows about financial planning and what the planner knows about the client. Do not overlook the implications of that space. Mistakes happen here.
Don Shaughnessy is with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. He is a retired partner in an international public accounting firm.