There is an observation that says that to kill a sleeping person there are just three requirements.
There is no limit to what people can do. They can do anything. Tools exist. Processes are known. The trick is to get them to “want to.” Not just murder, but anything difficult, maybe like an estate plan.
Estate planning is the general financial plan. All others, like retirement planning, Succession planning and educational saving are merely subsets of the general plan.
All of the needed tools exist. Processes are known. In most cases, there is only the requirement of selecting and implementing. Nothing requires great skill unless you want to do it yourself. Then identifying and implementing the acceptable options is time consuming and error prone. Advisors are a resource.
Wanting seems easy. Most people agree that they want security, retirement income and something for the children. Financial independence is the popular term. Most plans break down at the wanting stage.
The problem is that the want is either emotional, and thus with little structure, or it is intellectual and organized, but without the emotional engine to drive it over a long time. People need both the logic and the passion.
Financial Advisors sometimes are too logical. Logic is not action inducing. Wanting comes from emotions and sometimes details diminish that.
When reporting to clients and helping to build financial structures, pay attention to both aspects. People can visit the logical once in a while, but they are emotional every day. Reinforce the logic with emotion.
It is okay to ask questions like “How does that make you feel?” or maybe “Is there a anything that is keeping you awake at night?” “Are there any things that frighten you that I should know about?” “What are you happy with?”
The advisor’s tasks go far beyond arithmetic and internally consistent structures. It is a people to people business. Help people to want to do the necessary.
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.