How to Avoid the Flaws in Traditional Planning

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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.