When approaching financial planning some financial advisors get ahead of themselves and many clients do not understand the process. That leads to near unsolvable conflict even when everyone has good intentions.
Suppose we start here. “What is financial planning for?”
You would be surprised how few advisors have a holistic answer and you would further be surprised that some clients do. The conflicts arise in execution. To find an answer think about this.
There are two things to consider. Both are in the form Data-Information-Knowledge-Meaning.
Data is just that. A point. Could be true or not. Information is tested for truth and probability of importance. Knowledge is fitted information. Knowledge is a system and when information is accumulated in that form it becomes self supporting and holes can be observed and filled. Meaning answers the question, What could I use this for? or maybe Why do I care?
The first stream deals with the person. Their needs, hopes, fears and expectation. Until they can collect what they know about themselves to the point where they can judge meaning, they are not finished. They must answer the “W” questions. What do I want? When? Who else is involved? Where? What do I have to get it with? The last “W” Why? is multipurpose. It helps provide motivation and to be planful and persistent. It also creates the ability to assess priorities.
The second stream deals with products, concepts, technique, limits, laws and all of that real world material. Advisors develop their tools and their skills by acquiring knowledge and understanding what the tools do. Realistically, no one cares about the tool, they care about what it does. Holes, not drills. A perfect answer to no known problem is useless.
So the conflict.
People have intuitive ideas about their goals but tend not to be able to express them fully or perhaps cannot see how to act on them. They miss conflicts and usually are not complete. Advisors tend towards templates. Action but without personal nuance.
Advisors should be like plumbers. Assess the problem, find the solution the customer wants, then go for the material, tools and particular skills. Don’t apply the tools before the problem is defined.
The connection of the advisor’s meaning and the client’s meaning is wisdom. It is not easy to achieve and it changes over time. The goal is to match efficient methods supplied by the advisor with effective purposes supplied by the client.
The what is it for question can be answered in terms of Wisdom. The advisor and the client work together to discover the client meaning and fit it together with the tools and technique available. The relationships requires ongoing maintenance to deal with the changing needs of the client and the changing tools in the external world. Record performance, review and revise is an important part.
Advisors are valuable when they are attached to the client’s needs and not so much when they are selling tools without the context of what the tool must do.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. In previous careers, he has been a partner in an international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. firstname.lastname@example.org