Michael lem’s début as a financial advisor could not have landed on a worse date. It was Oct. 19, 1987 — Black Monday — and the plunging stock market had brought tensions on Bay Street to an all-time high.

But in addition to the crashing markets, there was something else that made Toronto-born Lem uneasy about his chosen profession. “It was largely a stock-trading business back then,” says Lem, who began his career at Yorkton Securities Ltd. in Marathon, Ont. “It was purely transactional, and I wasn’t happy. I wanted to find out what was important to my clients. I wanted to help them reach their life goals.”

Like the market, Lem bounced back. Today, the 40-year old advisor at BMO Nesbitt Burns Inc. in Thornhill, Ont., runs a $70-million practice with the goal of helping clients both reach their financial goals and live their life dreams.

The self-appointed “life planner” takes a distinct approach to financial planning. Building on the philosophy of advisors George Kinder of Cambridge, Mass., and Dick Wagner of Denver, Lem uses “goal discovery” and “interior finance” to guide clients to a better understanding of their finances. The practice is rooted in the idea that true financial planning can come only from a life plan — that is, having a solid understanding of a client’s relationship with money and his or her life goals, and then creating an investment strategy that accommodates both.

The problem with conventional planning, Lem says, is that it assumes the clients’ ultimate goal is retirement. Although that may be true for most people, it fails to recognize that there are many other important things in life, such as spending time with family, taking time off to write that novel or, for those passionate about their work, not retiring at all.

“Telling someone that retirement is their ultimate goal is arrogant, and I won’t do it,” Lem says.

It’s a statement that may be counterintuitive, particularly given that his 400 clients are largely professionals at prime retirement age. Still, Lem — a certified management accountant who earned his certified financial planner designation in 1998 — holds fast to the belief that retirement isn’t everyone’s No. 1 goal. “It’s assuming I know someone when I don’t,” he says. “I don’t know how to market to a demographic. These people are individuals, and I have to talk to each and every one of my clients to find out what they want.”

Lem recalls an experience early in his career that marked the turning point in his method of advising. A couple had come in to discuss their retirement plan, and wanted to know how much money they needed to save. Lem made some recommendations, and a plan was put in place.

“My numbers were bang on — we invested the right way, they saved enough money, and we got them to retirement exactly as they wanted,” he says.

There was just one hiccup: each of them had a distinct vision of their ideal retirement.
The husband wanted to move to British Columbia to ski; the wife did not. In the end, the couple divorced and Lem lost both accounts.

Lem knows he played no role in the collapse of their marriage — and in fact, many would argue he fulfilled his professional duties by ensuring they could retire. But, he says, he should have asked about their life goals in an effort to start a meaningful conversation about what their money could do for them. Today, he often schedules separate visits for his married clients to talk to them individually about what they feel is important; having different goals is a signal the couple had better start talking.

Lem acknowledges his peers have hesitated to incorporate life planning into their practices. “If you’re only looking to make money, this may seem to be a lot of unnecessary work,” he says. “But I’d argue that it’s not. You’ll be successful, you’ll make money for clients and, yes, you’ll make money.”

Life planning is winning fans south of the border, but it is only beginning to catch on in Canada. “There’s difficulty putting a value on the service because there’s no precedent. It’s new,” Lem says. “Also, it involves a lot of work. You need to know everything you can about your clients.”

@page_break@Each meeting with new clients begins with a thorough discussion about their relationship with money — a chat that often dredges up revealing and sometimes painful memories about money. In some cases, people’s irrational attitudes toward money originate in past experiences, in which guilt or shame toward their finances plays some part, Lem says.

Uncovering such issues is key in making sound life plans for clients, but Lem is careful not to pry. “If they want to share, they can. If they don’t, they don’t have to,” he says. “I don’t push them to reveal anything, but a lot of clients feel that being able to talk about it helps them tremendously.”

Lem is quick to point out that his practice isn’t a counselling service. His associate Rodney Fazaa and marketing assistants Ronald Tsang and Stan Mordovine make it clear to new clients what Lem does, and they let clients decide if it suits their needs.

“We’re not psychologists. What we do relates to money and financial planning, and we don’t give advice that isn’t money-related,” Lem says. “We always tell new clients, ‘This is what we do, and we’re very good at it’.”

Granted, Lem’s approach to financial planning isn’t always welcome. He still gets clients who want nothing but investment advice, and Lem is happy to oblige — after strategically working in some questions that give him a better understanding of their goals.

Canada has a long way to go before life planning becomes mainstream in the financial services industry, but Lem is optimistic that interest is growing steadily. He estimates he has spoken at more than a dozen conferences in the past 12 months, a sure sign that people are beginning to “get it.”

“I am asked to speak because people want to hear me speak,” he says. “I don’t have tapes to sell. I’m not on some lecture circuit. People want to know what life planning is all about.”

When he’s not travelling the country delivering lectures, he plays squash — “I love it. I play every second or third day,” he says — and spends time with his wife, Connie, and two daughters, Kaitlyn, 7, and Miranda, 18 months.

His own busy lifestyle is a true testament to the value of having a life plan.
“Oftentimes, there really aren’t any financial barriers to what people want to do in their lives,” Lem says. “But time is always a factor, and we need to arrange our finances to accommodate that.” IE