A key role for any financial advisor includes helping clients discover and address goals. Retirement comes up suddenly or it seems that way. Succession started early is better than later. Estates need some liquidity. There are efficient ways to get necessary spending money. And even more problems.
There is another area that is important. The resolution of conflicts within the set of goals. Most clients think vision before plan as they should but some visions cannot work. You cannot spend money today and expect it to be there at retirement as well. You get to spend money just once.
When addressing financial plans with inherent conflicts included, advisors must cause the client to rethink their ambitions and come to more appropriate goals. At a minimum they will need to address their priorities.
It is not the advisor’s place to do more than point out the inconsistency. No advisor can fully understand a client’s experiential history, nor can they understand the deep psychological reasons that drive delusional goals. Advisors are there merely to say, “You can’t get there from here.”
In my experience client’s are good at sorting and fixing. They learn quickly enough although they never start before someone points out the problem.
Forty years ago a Hong Kong businessman made a comment in a meeting involving a complicated business deal. It can be the foundation of the conflict discussion.
“That is not a problem; that is impossible”
In my mind, it has become Max Ma’s Law.
You waste your time trying to find a solution to an impossibility. Just as a dollar wasted is not recyclable, neither is time wasted recyclable. Better to get the conflicted idea out in the open where it can be redesigned to work.
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.