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Our clients should be important to us as individuals – not as statistics or as part of a predetermined demographic group. We should be genuinely interested in who they are, where they came from, where they hope to go, and what's most meaningful to them. When we talk with clients, we must go beyond the standard superficial due-diligence questions.
Everyone has a story, and a client’s story is molded from his or her experiences. It’s our clients’ unique personal histories that build their philosophies about family and money. Their experiences shape their value systems, and their value systems ultimately drive their decisions.
The better we understand clients and what’s important to them on a deep level, the better we can help them navigate through the ups and downs they’ll experience throughout their lives. We need to listen on a deep level to gain the insight we need to deliver the highest level of personalized guidance and service possible.
It's important to balance ROI – return on investment – with ROL – return on life. Mitch Anthony, founder of the Life Planning Institute, first introduced the concept of return on life in 2005 as a new and enlightened measure of success in wealth management. “As advisors, we are conditioned to make sure our clients have enough money,” said Anthony, “but we really should be asking if they’re getting the best life possible with the money they have.”
This is precisely why we need to always begin with the client and what the “best life possible” looks like to him or her personally. It doesn’t make sense to begin with a financial plan and then try to work a client’s life into it. Start with the lives they envision for themselves and their families, and then build financial plans around those visions to focus on and refine all along the way.
We must have clarity on our clients' definitions of success so we can fully understand the impact their money has on every aspect of their lives. For that, you need the structure necessary to adjust and facilitate client life changes as they occur and use financial planning to create the lives they envision. Ask the following questions:
- Who and what gives you the most joy?
- What are you excited about and would like to do more of?
- What specific role do you want to play in the future of your children, grandchildren, and parents?
- What would you want to change in your money management to align better with the life you dream of?
- What is your personal definition of success?
- What kind of legacy do you want to leave, and why is that important to you?
That is how we can shape a financial plan around the client to keep the people and experiences that are most important to them at the forefront of the plan. Financial planning with integrity is much more than just rearranging investments and insurance around the circumstances of our clients’ lives. It’s about always keeping a holistic and long‐term perspective on their values and goals.
When you consider baseline traditional financial planning, you probably think of things such as asset management, risk management, estate planning, tax planning, income planning, insurance, and debt management. We all recognize these as essential components that work in tandem and are necessary for a client’s financial well‐being. But in this traditional model, there is an underlying assumption that everyone is similar, and the only unique variables are the numbers that are plugged into a formula.
This is not reality.
Those numbers are representative of a value system and quality of life that is different for everyone. The numbers exist to support the lives our clients envision – not govern them. The concept of return on life no longer places exclusive emphasis on quantity when managing assets, but rather puts quality of life centerstage. This gives clients the peace of mind to navigate the many transitions they’ll encounter over the course of their lives.
I refer to the work I do with clients as a “shared future.” Both the client and advisor have significant stakes in the game, and failure is not an option for either. Like the pilot says to her passengers, “If you don’t arrive safe, we don’t arrive safe.”
I am paid to help clients distinguish myths from reality, noise from signal, and keep them moving toward their true north and on a path to financial success – regardless of circumstances. Making as much money as possible is never the primary objective of a financial plan. Although we all love to see great performance, beating the market typically has minimal impact on our clients’ day‐to-day lives or their return on life.
Looking through the lens of ROL – return on life – are you focused on each client's quality of life or just the quantity of assets? Use the aperture of this lens to see more clearly how money serves them and not the reverse – as is often the case in this profession.
This is a modified excerpt from the book Integrity @ Work: Using the Integrity Process To Find Your Financial True North by Ralph G. Adamo, now available on Amazon.
Ralph G. Adamo is CEO and Founder of Integrity Wealth Management, a comprehensive financial services firm committed to helping families and individuals achieve long-term financial success. Headquartered in Newport Beach, California, the firm offers a comprehensive service model, including investment oversight, tax reduction planning, family wealth planning, insurance planning, and collaborative services. To learn more, visit integrityiwm.com.
Ralph Adamo is registered with and securities are offered through Kovack Securities, Inc. Member FINRA/SIPC, 6451 N. Federal Highway, Suite 1201, Ft. Lauderdale, FL 33308. Tel: 954-782-4771. Investment Advisory services are offered through Kovack Advisors, Inc. Integrity Wealth Management is not affiliated with Kovack Securities, Inc. or Kovack Advisors, Inc.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
