Synergistic Planning

Advisors have an important role in financial planning.  It is a multi-fold process, but impatience drives them to tactics.  That is wrong, but it makes more money for the advisor.

Planning should include these parts:

  1. Identification of client values and standards
  2. Development of strategy within those standards.  Strategy is generally the answer to “W” questions.  What outcomes do I want? What do I have to get it with?  When do I want it?  Who can help me or share in the result?  Where will I be when I achieve it?  What can go wrong?  Why is important too, but only because it attaches the other questions to the standards.  Why can provide motivation and why can help decide priority questions.
  3. Development of a tactical set to connect resources to the “W” questions.  The “How” decisions.  The choice of which how is quite easy if the strategy is well defined, because it will make sense in the broader strategy.  The allocation of resources and timing will be much easier.
  4. Logistics is the end of the process. Implementation details are often fussy and some skill is required to make a way through the maze. Followup matters because plans relate to the world in which they were created.  They need not change if the world does not change, but history teaches us that is improbable.

Advisors have a very narrow role in strategy development.  Strategy is unique to each client and when complete, there are no wrong strategies.  The advisor’s role in strategy is to address two aspects.  Voids and contradictions.  It is always okay to point out areas that are important and as yet unaddressed.  It is likewise okay to say you cannot have item D and also item K.  If the advisor devises the strategy, the client will not understand how the pieces fit and has therefore, implicit permission to blame someone else if it does not work out.

Advisors are the “How” people.  There is little reason for the client to know and understand product or technique.  There is a reason they should not.  Product and technique is complicated.  Rules change.  New products are developed.  Old ways are found to be deficient.  Someone who is a specialist in one aspect tends to keep up and it’s difficult even for specialists.  Narrow specialties exist in law, accounting, tax and finance.  No client could keep up to everything, even if they were brilliant and devoted time to it.  Applying obsolete technique to current product can be very expensive.  Ask any tax practitioner.

Implementation is similar.  Most implementation is fussy and tiny details often make big differences.  The saving to do it yourself is repaid many-fold by the cost to fix it later.

The areas are strategy, primarily client.  Tactics, primarily advisor.  Logistics, both but dominated by advisor(s).

The win for the client is that they develop a plan with the tools to execute it, a way to select which tools on the basis of closeness of fit to the strategy and all competently implemented. With minimum time commitment.

The final implementation step of followup matters.  The three Rs.  Record, review and revise.  Nothing lasts forever.  When a client understand the tools they are using and how they attach to their strategic vision, they automatically understand a changes in their vision, the world around them, and the options they have to address those changes.  They can understand and accept the risks.  They can accept the value of advice.

Pretty strong, durable and worthwhile relationship.  Now from the advisor’s standpoint, how do you get it all to happen in the first 45 minute meeting?

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 a large 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.  866-285-7772

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