Today’s new breed of advisor recognizes that the nature of the advisor-client relationship has changed, with discussions shifting from investment markets, products and performance toward life goal-setting, protecting the client’s future and life enjoyment. In light of this shift, we are taking a six-part, step-by-step look at ideas you can use to forge your 2003 business plan and reposition yourself against your competition. In our sixth and final instalment, Barry LaValley guides you through a day-to-day implementation of the life planning approach:

(April 2003) You have decided to use the life planning approach as your differentiation and branding strategy. But given that you still have to make a living, already have an established business process and may be limited by compliance and company restrictions, simply saying, “I am going to do this” is not enough.

There has to be a practical and incremental implementation of the life planning approach that makes sense for you and doesn’t require a complete reorganization of your practice. Here’s where to start:

1. Client contact

Your present clients must understand the way you are strengthening your service and approach so they can articulate to others what it is that you do. In addition, you want your client relationships to now reflect the fact that you are going to help clients clearly understand how their life decisions impact their financial situation. To do that, you should hold meetings with all of your “A” and “B” clients over the next quarter, using this approach:

“Mr. or Mrs. Client, as my clients go through different stages in their lives it is important for me to continually adjust the kind of service that I provide. My real service to you is in helping you understand the financial consequences of life decisions you make. I want to use this meeting to update myself on the changes in your life that you have gone through or are anticipating, any new information that would allow me to help understand your situation better and any changes to the goals that you have for your future.”

2. Gathering information at the meeting

You want this meeting to be a conversation, not an inquisition. Avoid extensive questionnaires or computer diagnostic tools in this meeting that detract from your person-to-person contact. Also, a number of advisors use a comfortable living room setting for this meeting.

There are a number of things you want to know about your client that you may not know already. Again, your reason for asking these questions is that you need the answers to fully understand the client’s situation. The kinds of questions you should be asking can broadly be organized as follows:

Your client’s past

· What is their previous experience with money and investments?
· What are the best and worst decisions (financial or otherwise) they have made?
· What have their previous dealings with financial advisors or other institutions been like?
· Where did they grow up?
· What has been their education and career path?
· What has their experience been with successful retirees or others that they model themselves after?


Your client’s present

· What is their family situation?
· Who might be affected by their financial decisions?
· How do they feel about their work situation today?
· What do they care about today?
· What role does money play in their life today?
· What kind of planning are they doing for their future?
· What sources do they value for financial and other advice?
· What kinds of information do they value?

Your client’s future

· What will happen to their career?
· What do they want their retirement to look like?
· What do they value in the next phase of their life?
· What changes or transitions in their life do they anticipate?
· What kinds of things do they want to accomplish in the future?
· What do they want their money to do for them?
· What are their hopes and fears for retirement?

For a list of other questions to acquire specific information you should also know about your client, please click here.

3. Creating a client database

Put the "life" in your practice in 2003 — previous stories

  • Building a prospecting strategy
  • Creating a professional referral team
  • Creating your marketing brand

  • Creating your communications strategy
  • Developing your mission statement and value proposition
  • Once you begin the process of compiling information about your clients, you’ll need to organize it effectively. Regardless of the kind of contact management system you use, there should be provision to be able to sort by these categories:

    • Demographic profile (late boomer, just retired, GenX, etc.)
    • Hobbies and interests
    • Investment and risk profile
    • Family type (parents, children, spouses etc.)
    • Preferred contact methods and contact history
    • Life transition profile (moving into retirement, new job, new house, inheritance, etc.)
    • Career or areas of professional influence

    Each category can contain as many sub-categories as you want. The better your client database, the more focused you can make the information that you provide for your clients (and remember to make your clients aware of this!). When your clients receive more specific information or guidance from you after being asked deeper questions, its relevance will demonstrate that you understood their interests.

    4. Changing your financial planning process

    The life planning approach will modify how you handle financial planning. You want to be certain in your interviews with clients that they understand:

    • your methodology requires their life and goal information so you can provide them the best possible service;
    • you will be asking them to expand on the goals they mention so you can fully understand what they are hoping to achieve; and
    • your role is to help them with their financial comfort as they go through the various stages of their lives.

    5. Life transitions and financial planning

    Clients tend to focus on lifestyle planning when they are ready to make a transition to the next stage of their lives, be it a new lifestyle, retiring from work, changing careers, opening a new business or after the death of a loved one. You want your financial planning meetings to focus mainly on the clients’ view of the transitions that they expect, rather than on the investments that they have.

    Use the following matrix to guide your questions on expected transitions:

    What is your client going through now?What does your client anticipate going three in the next three years?What are the long-term (more than three years) transitions?
    Your client’s work or business situation

    Your client’s family situation

    Your client’s personal development

    Your client’s financial situation

    Your client’s life management situation

    Your readiness checklist

    Here’s a summary of other elements you should have in place each day to implement your life planning approach:

    • Make sure that your staff and clients understand the mission statement that you created (it should be on your wall, in your marketing material and on your brochure).
    • Your role is no longer to be an investment expert (if you can farm out investment decision making to a managed money account, you should do so, or consider going fee-based to get away from managing money).
    • Change the nature of the information that you provide clients to lifestyle-oriented material and focus on sending specific information each day to your clientele.

    Seeing the difference

    You may not take the life planning approach with all of your clients; in fact, some will continue to use you to facilitate transactions or provide them with simple services. Where possible, you want everyone who comes in to accept that you are a different advisor than others — you ask for different information, you spend more time understanding the client’s personal situation and you provide a more tailored approach based on the financial implications of the life decisions they need to make.

    It is critical in taking the life planning approach to financial planning that you focus on the client’s life and not his money. It is equally important to your differentiation and branding strategy that you are seen to be taking this approach.

    • • •

    Barry LaValley consults with financial advisors and their companies on adding more of a life planning approach to practice management through his company LaValley Communications. He is also a partner in The Retirement Lifestyle Center. Barry’s new book Second Life — Building the Right Attitude for Your Retirement is available April 15. He can be contacted through his Web site www.lavalleycommunications.com.

    (04/09/03)