Jeopardy is a good analog of how many people implement financial planning. Here is the answer, now describe the question. Here is a mutual fund, here is a life insurance policy, here is an ETF, here is an RRSP. They are good answers, think of the question. Let me help you with that thinking. Financial planning like that is tactically driven planning and it frequently leads to client confusion, dissatisfaction and failure. Eventually some lawsuits.
Most things in life work in pairs. Question/answer. Problem/solution. Opportunity/implementation. Attack/defense. Warhead/armour. Husband/wife. Parent/child. And many more. Even the army trains their soldiers to operate as mutually supporting pairs. A far stronger force than two individuals.
The idea is that most things we deal with are symbiotic. They are two way. Learn the problem, then find a solution that fits. If that does not quite work, add the experience to your tool set and find a better one.
The conjunction of problem and solution is a working answer. The problem goes away, but because the question was first, the answer makes sense. That makes the answer more durable and more capable of review and follow-up as circumstances change. And circumstances always change.
Problems solved in this way value context above all else. The financial advisor’s role is to provide contextual depth and potential solutions. The client’s role is to establish standards, decide on the time frame, provide resources, determine the goals, and make decisions.
With the framework of “W” questions in place, the solution becomes near trivial. It is defined by the wants, and confined by the resources, standards and priorities.
The client must supply the strategic environment. What do I want, What do I have to get it with, When do I want it, Who will be involved, Where will I be and Why this particular set of wishes. The advisor’s roles are to test the “W’s” for completeness and conflicts. That is filling out the context. After that, their role is “HOW”
Clients who have never tried this method will be clumsy at first and there will be considerable context filling activity. Education. Do not avoid it. Clients with a strong strategic view are the best clients. They interact and bring ideas forward. They know what it means.
Client and advisor become a symbiotic system that arrives at efficient answers to real and effective questions. Everyone wins.
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
Contact: firstname.lastname@example.org 705-748-5181