A Goal Without a Plan is Just a Wish

By Marc Westlake

Published on: April 17, 2020

“Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.” – Franklin D. Roosevelt

One of the biggest problems for financial planners is that we ask our clients to tell us what their financial goals are. We use questions like; “How much do you think you will need?”

All around the world patient clients are sitting in advisor’s offices with blank looks on their faces thinking to themselves; “I don’t know, that’s why I came to see you…”

Good financial planning isn’t about trying to beat the market or to see how much money we can make. We remind clients that there are no pockets in shrouds.

Good financial planning is about understanding your values and then moves onto a discussion about your lifestyle goals.

What is it that you want to do with your life?

As Stephen Covey says in the amazing book The Seven Habits of Highly Effective People, “Begin with the end in mind.”

Think of yourself writing your own Eulogy. What is it that you would want to have people say about you? What did you achieve? What did you become during your life?

It can’t be said often enough, people don’t really have financial goals, but rather lifestyle goals that have financial implications.

The introduction to Values-Based Financial Planning: The Art of Creating and Inspiring Financial Strategy by Bill Bachrach starts with following:

“In the grand scheme of things, money’s not that important. It’s important only to the extent that it allows you to enjoy what’s important to you. And not worrying about your finances is critical to having a life that excites you, nurtures those you love, and fulfils your highest aspirations. If you want to make smart choices about money, based on what is important to you – your core values, this book is for you.”

Wow. Just Wow. Who wouldn’t want to read that?

If you want to make smart choices about your money, base them on what is important to you.

What’s important about money to you?

As advisors, do we always pose that question to our clients?  It’s a great place to start new client meetings because it gives you the opportunity to talk about yourself and to clearly articulate your values.

How many financial advisors meet a new client and immediately go into presentation mode? “At Blah Blah Blah, we are experts, we have qualifications, we wear suits…”

Isn’t this the equivalent of going on a first date and saying; “Shh, let me talk about me for a while?”

Financial Advisors should start from a position of quiet confidence. A nice office, appropriate qualifications, being well turned out are table stakes to be able to play the game of professionalism in any profession.

Good financial planners need to have a value proposition that isn’t based on selling products, trying to beat the market or accumulate the most wealth. We need to have a new client engagement process where we do a lot of listening. Listening to the answers that are given to very broad, open questions like “tell me about your family?”

We can’t possibly expect you to tell us everything we need to know in one or two meetings, and we need to ensure that we are well-paid for the investment of time and expertise that a more prolonged client engagement process entails.

The crux of the issue

This is the crux of the issue for many financial advisors, on a treadmill to write new business. They simply don’t have the time to really get to understand their clients. In fact, in the extreme, they only complete a fact find exercise because they are required to do so. It’s compliance, right? They seek to uncover gaps in a client’s needs and then sell a product to fill that gap.

I met with an advisor at a high-street bank when I moved to Ireland. I was applying for a mortgage and it’s a statutory requirement that I have life assurance at least equal to the loan. That’s a really good idea. It’s a shame they stopped short of making a will compulsory too.

So, I collected the details of my existing life assurance policies which were more than adequate to cover the loan and went to the bank.

I was handed a life assurance application form to complete and explained that I had to do this to get the mortgage. I played along. While she played with the computer barely aware that I was in the office. “What are you doing?” I asked. “A quotation” she said.

I was handed a quotation for the life assurance I didn’t need.

Then she said, “now we need to do the compliance” I’m not making this up. She actually said “do the compliance” as if a fact find was just the last step of the sales process.

I remember thinking to myself “thank God for compliance departments”

Having, she thought, secured the product sale, she finally got around to an assessment of my needs.

This is the crux of the problem. She wasn’t a financial planner. Many financial advisors are just product brokers. They have sales targets, and they are paid commission for selling products.

Yet consumers are looking for advice.