It’s difficult at times to demonstrate the value of good financial planning. Conversations about future wishes, wants and needs are challenging. Identifying and implementing certain sacrifices today to make those goals a reality is even more difficult. But, while we manage our clients’ money, work with them to develop their optimal investment plan and then monitor and stick to our disciplined philosophy, this is just the beginning, the nuts and bolts of investment management and financial planning. It is just a fraction of where a good financial planner really adds value.
A financial plan involves looking at what streams of income are available, what resources are on hand and trying to pair them to what we believe a client’s lifestyle and long term goals will cost. If we can help them manage to get their resources to a point where they can have a high degree of confidence that they’ll achieve those goals, we’ve likely got a pretty good financial plan. It isn’t a perfect science, but over time, we can improve on this by helping clients work through the tradeoffs of various financial decisions, measure long term investment results and look back and evaluate the benefit of choosing one path over another. This is a step forward from those basic nuts and bolts and we know that it helps position our clients more successfully than they might be without it, but is that really what has the biggest impact?
I would argue that it is not.
Growing resources and pairing them to goals only gets us so far as planners and only allows clients to realize part of their potential financial success. The most important work we do, the work that frankly gets missed by a bulk of the industry too caught up in proving the investment product or solution they’re selling is better than another, is having meaningful, powerful conversations about what a client truly holds most dear. What do they value? Who do they want to help? What does an ideal vacation, weekend or family experience look like?
Understanding the subtle nuances of what our clients’ biggest priorities and most important values are, really getting to know them beyond their portfolio is where the value of financial planning really takes off. If we push clients to hold Discovery meetings, to think about difficult issues, to share their goals beyond just growing assets, we’re not being nosy or trying to pry. We’re trying to get to the “why” behind what they hope to do. We’re doing our best, most important work.
When clients are not just maximizing their resources, but using them on purpose, on the things that truly matter most to them, you truly realize the power of good financial planning.
It’s not just about making money. It’s about making money matter.
Have a great week!