Using a life planning approach to help clients achieve their life long goals requires an in-depth understanding of their personal circumstances. Having this understanding can facilitate deeper client relationships that can last for a lifetime.
“You have to take a deep dive into your clients’ goals by asking them to think very far into the future,” says Lou D’Aversa, senior financial consultant with MD Management in Toronto.
This approach requires that you go far beyond the standard know-your-client questionnaire during the client discovery process. You should try to understand the life choices your clients may want to make, taking into consideration their emotional as well as financial needs.
And you have to build flexibility into the process, adds D’Aversa: “The life plan for any individual can change.”
> Have a comprehensive discovery process
Get clients to open up by using probing techniques, D’Aversa says. Often, clients may have pre-conceived goals in mind. Or, they may not necessarily know what they want.
But during the discovery process, things become clearer.
“Ask questions to help them formulate their thoughts,” says D’Aversa, who recommends discussing plans years, if not decades, ahead.
In addition to clients’ lifestyle choices, D’Aversa goes through the various events of a client’s life cycle — from their early career to buying a house, having children, educating their children, taking care of their elderly parents and retiring.
The discovery process, he says, helps him set an agenda for the client.
> Demonstrate that you have a good understanding
D’Aversa, who works with medical doctors, uses various life-planning tools to educate his clients about their options, challenges, financial demands and other issues through the various stages of their life – from medical school to residency and their high-income years as a doctor.
“This enables clients to be better prepared for financial events in the future,” he says.
He also shares his experience in working with other, similar clients, to demonstrate his understanding of their circumstances.
> Make discovery an ongoing process
Each individual has a unique life cycle, D’Aversa says, with some being more predictable than others. Although certain events are typical at certain life stages, you have to continuously ask your clients about life-changing events that might affect their plans.
The discovery process never ends and you might learn something new at each client meeting. Your objective is to not be caught by surprise.
> Build in flexibility
The plans of clients can change based on life events or changes in lifestyle.
“You must have a flexible enough plan to accommodate twists and turns in life,” D’Aversa says.
For example, one of D’Aversa’s clients decided to devote his later years to philanthropic work overseas, requiring an adjustment in his plan. Discuss how any change in clients’ plans would affect their finances and create new projections of their finances, D’Aversa says.
> Refresh your clients’ goals
You may find that, based on your projections of a client’s finances, he or she might have accumulated excess funds. Show them their options, such as leaving an inheritance for their children. “Ask questions to help them formulate their thoughts.”