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When your clients walk into a traditional planning session, you can almost guarantee that the first question they will ask you is, “When can I retire?” They’ll work with you to pick a retirement day in the future, then you go about figuring out how to invest their money. Then, when their last day of work comes, they can flip the switch, walk off into the sunset, and draw on their portfolio while never having to work again.
That future-oriented planning serves a purpose, but it misses the central question: What do your clients want their lives to look like? Important details like where they want to live, whether they want to downsize or upgrade their lifestyle, and how they’d like to spend their time once they leave their full-time career, are often not discussed by financial planners. For that matter, few of your clients have even spent the time thinking through those questions.
As a result, even if they reach retirement with all the money they could want, they find themselves unsatisfied without knowing why.
Financial planners often assume that everyone dreams of living the exact same life. It’s as if few in the profession have ever sat down and talked with a client, much less a female executive client. Take a group of five different women at random, and you’ll hear five different descriptions of what an ideal life looks like. The profession is not focusing on this – they’re more focused on securing their clients’ financial futures.
Money is important, but it’s important as a tool for living the life your clients want. Success isn’t measured simply by how large a portfolio is, or whether your client maximized their retirement contributions. Success is measured by the quality of the life they are leading. Planning plays a role in that quality of life, of course, but only if that future takes into account the goals, wants, needs, and passions that make your client’s life different from everyone else’s.
No consideration for unique needs
Traditional financial planning is the one place where it’s a mistake to treat men and women as equals. Female executives face different financial issues from men in the same positions. When the financial planning industry fails to consider those issues, it does female clients a major disservice.
For example, the profession does not consider the fact that the average woman, if she retires in her early 60s will live 30 years in retirement, longer than the average man. Most women will be single for the majority of those post-career years and have higher health care costs, both of which greatly impact quality of life during retirement.
The profession also fails to take into account the myriad challenges women face in business. Traditional planners may argue that career challenges are outside their purview; however, those challenges make a big difference in how well a woman is able to fund the life she wants, and how she defines quality of life for herself.
One of my clients is getting married soon. Because she is close to 40-years old, she and her fiancé plan to start having children right away. The two of us have spent a lot of time discussing how marriage and family will impact not only her bills but her ability to earn money. During our meetings, we went over strategies she can deploy to overcome the challenges to her earning potential. She took those strategies into a negotiation with her workplace about flexibility. As a result, she scored a major victory for her quality of life: she now has the option to work from home as needed. In the long run, this flexibility is going to make a big impact on her ability to provide for her family while living the life she wants. It will allow her to take care of her children while still maintaining her career.
This is just one example of what it means to plan around the unique financial issues women face. When a planner doesn’t take their unique circumstances into account – goals, needs and day-to-day challenges – it may mean sacrificing their ability to live life on their terms. Those limitations sometimes mean that people don’t realize they’ve made those sacrifices until it’s too late.
I was talking to a couple recently who said they were making sure to save money for retirement but didn’t know if it was enough. As it turned out, they hadn’t even had the conversation about when they wanted to retire. It came out in our conversation that the husband has a mandatory retirement age at his company of 62; his wife didn’t even know that. She said, “If he retires at 62, why would I want to keep working?” Despite having worked with a financial planner for some years, they never had these discussions before they came to me.
Financial success is so much more than simply having a given amount of money in a portfolio. It’s about having the freedom to spend time in a way that makes your clients happy. It’s about achieving the things that are important.
A different approach
At my firm, I’ve developed a very clear financial planning process focused on the four main derailers of women’s financial success. As stories above show, this process makes all the difference to my clients. It’s the integral piece of financial planning that will make or break your clients’ quality of life. It’s the difference between working as though your clients are on a treadmill, trying to keep up with their expenses, and working on their own terms, empowered with full control of where their money is going.
Every plan I make is customized based on what an individual client wants. When I create a plan, I’m not telling the client what she’s going to do. Instead, I’m drawing her out about what’s important to her, guiding her in focusing those values into tangible goals, and helping her prioritize and plan around those goals. It’s a give-and-take discussion that puts the client in charge of her own decisions. By the time I break her plan into actionable steps, she is ready to take action. It’s a lot easier to follow a plan when you know it has been built on your terms.
Choice is the heart of the financial planning process I offer. My job is to create awareness and come up with solutions, but the client gets to choose. It’s her life, her money, her job, her family – she should be the one to choose what’s most important in her plan. Putting choice back in the client’s hands makes her more engaged. She understands every step involved in taking her plan from dream to reality and understands that it’s up to her to take those steps.
Another unique feature in my approach to planning is the resource component. I help my clients craft a customized team that can advise them on all the moving parts involved in a tailored financial plan. Depending on that client’s goals and needs for support, I bring in people who are experts in career coaching, estate planning, accounting, business law, and whatever experts we have identified that will help the client reach her goals.
A client once likened me to the conductor of the orchestra – I’m an expert in designing the big-picture strategy and bringing together the best-qualified people to play each part. My goal is to make sure they are all taken care of by the best team possible.
I’ve found that this emphasis on collaboration is immensely appealing to female executives. Women have a natural tendency toward empathy, compassion, and emotional connection in their careers. We feel stronger and more secure in a collaborative environment than in trying to do everything alone. Even women in leadership tend to gravitate toward collaboration over flying solo.
This is the reason behind another important aspect of my approach to financial planning. I design all my clients’ plans around incremental change. It allows for progress at each woman’s own pace and comfort level.
Financial planning takes time and effort, two precious commodities in a female executive’s life. It can be hard for my clients to take that time away from their families, their careers, or their personal lives – it feels like just one more thing for them to do. That’s why I make sure that their plan is designed to be accomplished one small piece at a time. Rather than impose a huge life change that would only overwhelm them, we set clear priorities and manageable goals, then chip away at them steadily.
This approach is more than just a philosophy. Where most traditional financial planners compile an 80-page master document that they present to clients, I distill everything my clients need into a one-page plan summary. It takes all of our conversations about their goals into a simple outline, including where they currently are, where they want to be, the gaps in-between, and the incremental steps for bridging those gaps. It’s everything they need to know to start making progress toward their best life, with all the potentially overwhelming details filtered out.
I started using this one-page summary because I knew from experience what clients do with the 80-page summary: They get home, stick it in a drawer and avoid it. By contrast, a one-page plan makes the whole financial planning process seem doable. It keeps the confusing details out of the picture; they know what they have to do to get where they want to be, which is their true priority. Each meeting I have with a client, we update this one-page summary together based on the actions they’ve taken and the milestones they’ve achieved. It keeps them focused, on track, and lets them see their progress in real time.
Quality of life is integral
Everything in my planning process is about what that female executive wants her life to be. The entire planning process is constructed around how that person defines quality of life. Every step in the plan we create is tailored to help that client live life on her terms. Throughout the process of implementing the plan, she has the assurance that her efforts are yielding the life she wants for herself.
Bridget Venus Grimes, CFP®, is founder and president of San Diego, CA-based, WealthChoice, a firm specifically focused on helping women turn their professional success into financial success so they and their families can live their ideal life
Read more articles by Bridget Venus Grimes
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
