A life planning approach builds deeper relationships

“In life planning, the client — not the client’s money — is at the core of the client/advisor relationship,” says Prem Malik, a chartered accountant and financial advisor with Queensbury Strategies Inc. in Toronto. “Most clients want a life plan that aligns their values, needs, beliefs and life goals with their financial goals.”

In traditional financial planning, the focus is primarily on risk tolerance, time horizon and asset allocation — which are all tied to financial wealth.

“Life planning is more about client discovery,” says Jane Olshewski, manager of financial life planning with Investors Group Inc. in Winnipeg. “You have to delve a little bit deeper into your clients’ lives to find out about their history, values, beliefs, principles and goals.”

Most clients have difficulty explaining their goals and may not know how to reach them, says Michael Lem, an advisor with BMO Nesbitt Burns Inc. in Thornhill, Ont. You must be able to understand their relationship with money and their life goals, he says, in order to arrange their finances to achieve their overall objectives: “Life planning helps them to focus on their longer-term goals.”

> Find out what is meaningful to the client

In life planning the goal is to discover the things that give meaning to your clients’ lives, and identifying what could be standing between your clients and those goals, says Rick Dell, senior consultant with Investors Group in Sherwood Park, Alberta. “Perspective is reality for some clients,” Dell says. “Once you understand their life goals, you can then apply traditional financial planning tools.”

Typically, the quantitative approach used in traditional financial planning does not incorporate emotional intelligence, according to Lem. By getting to know your clients, you can discover their passions, which are essentially tied to both their life plans and their financial goals. Says Lem: “It is the right thing to do.”

You must be able to combine the quantitative aspects of financial planning with a qualitative approach, according to Malik. “If you take a purely quantitative approach to financial planning,” he says, “you’re in the wrong business.”

It is not always easy to get clients to provide personal details of their lives, but effective use of probing techniques usually opens doors.

“Many clients expect a detailed, factual approach,” says Dell. And, as Lem points out, some clients may not necessarily like a “touchy feely” approach.

> Turn the interview into a conversation

To get around this, Dell suggests turning the interview into a conversation.

“You want to take the pulse of your client,” says Malik, who says that the best part of his job is “storytelling.”

“This way, clients are more comfortable,” he says. “You earn their trust, and they share more about themselves with you.”

IE