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From my experience working closely with financial advisors, they are competent at asking their clients probing questions that go beyond the money, and discussing what’s truly important to them. In fact, it’s not hard to see from taglines of some advisory firms their attitudes toward financial planning.
Here are taglines I picked up from some websites of local firms:
“Transcending wealth, transforming lives”
“Invest in a life fully lived”
“Build beyond”
The concept of life planning is nothing new, but the proliferation (and formalization) of it is a more recent phenomenon. The idea has been all but canonized by fiduciary-minded advisors.
Yet, if you ask financial advisors – as I have – what’s truly important to them, their personal goals and dreams, and what makes them genuinely happy, they get uncomfortable – and not quite forthcoming.
If I had to guess, they’ve never asked those questions of themselves.
Most advisors do what they do because that’s what they did yesterday. They occasionally try something new they learned at a conference or heard from their advisor buddies. Morning huddle does wonders to employee productivity? Done. Client appreciation events help firms to grow by 20%? Done.
It resembles a prospective client with seven IRA accounts, 10 brokerage accounts and four life insurance policies with no reason for the multiple accounts.
I worked on succession planning with the founder-owner of a successful firm with a strong reputation in my community. I had, and continue to have, a lot of respect for him. After months of discussions and trying to engineer a succession plan, weighing various options and the respective tax and business implications, he still was undecided about which plan to implement. Sometimes I had to push him hard, but mostly I nudged him gently to move the process along.
Finally, after months idling unproductively, I told him: “Let’s not do something because it feels like the right thing to do or because it’s something you learned at a conference. Let’s not even worry about money or what the so-called industry thought leaders recommend. (It’s usually an ensemble firm.) And we’ll definitely not choose an option solely because it maximizes your financial return.”
Then I asked him to ignore money, social expectations, reputation, business risks and other seemingly important factors that were weighing on him. Instead, I encouraged him to think – really think – deeply about what’s important to him, his personal goals and dreams and what would make him truly happy.
Then he mentioned multiples and valuations and how the successor doesn’t have money to pay for the practice and it’s not realistic and so-and-so isn’t ready to take over his practice.
Stop! I told him. Ignore those things. Focus on what you want. What’s most important to you. What will make you truly happy. Start from there. Don’t worry about money for now. It can wait.
Does this sound familiar? It should. It’s what I used to do as an advisor when I was unknowingly involved in life planning (using the term loosely). Most of you do this too daily with your own clients.
Follow your own advice you give to your own clients. Engage in deep self-reflection. The sobering truth is, time is running out. You tell your clients that money and work are but a part of their overall happiness and fulfillment. That they should enjoy their lives while they still can and that it’s okay for those diligent savers to spend money without feeling guilty.
You should do the same.
Do you feel fulfilled? Or are you feeling tired? Do you feel that you have veered off course from what you know is deeply important to you? Is your firm’s vision congruent with your personal vision?
You tell your clients their lives are much more than about money. It’s time to follow your own advice.
Hoon Kang, CPA, CFP®, ChFC, CLU is a practice management consultant with Elliott Bay Advisors. His practice focuses on helping founder-centric advisory firms transform from practices to enduring businesses with legitimate enterprise values. His articles have appeared on AICPA PFP Planner, Leimberg Information Services and Journal of Financial Service Professionals. He can be reached at [email protected].
Read more articles by Hoon Kang
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
