This article is the last one on the Goals-Based Construct to help clients get engaged in their financial planning. The first article was all about dreaming, which helps clients get excited about their financial planning. The second article was all about focusing on the things you can control. Now we’re going to talk about helping clients prioritize their needs—and doing it in such a way that they don’t feel judged.
The final step of the Goals-Based Construct is prioritization.
The reason this is so important is that inevitably, as things change in people’s lives—children (and grandchildren) are born, spouses get sick, spouses die, jobs get eliminated, and markets misbehave—you’re going to need to adjust the advice you’re providing to your clients.
And the advice you provide needs to be based on their priorities and values, while remaining focused on the things they can control.
And the best way to understand clients’ priorities is to ask.
But in order to really understand their priorities, you have to be careful how you ask.
For example, if you ask a client, “How important is that legacy goal for your children?” or “How important is it for you to educate your grandchildren?”, you have set them up to only answer in the affirmative since a negative answer would make them seem like (and feel like) jerks!
But what if you asked these questions in a different way? What if your questions could help them prioritize rather than choose? What if your questions helped them feel good about their choices?
With complete credit to David Loeper, who taught me all this stuff, what if you asked clients questions like this:
To reduce the investment risk in your portfolio, would you be willing to:
- save more?
- retire later?
- reduce the size of the estate?
- reduce retirement spending?
To decrease your current savings rate, would you be willing to:
- take more investment risk?
- retire later?
- reduce the estate size?
- reduce retirement spending?
To achieve your early retirement goal, would you be willing to:
- take more investment risk?
- save more?
- reduce the estate size?
- reduce retirement spending?
To achieve higher spending in retirement, would you be willing to:
- take more investment risk?
- retire later?
- save more or spend less now?
- reduce the estate size?
And you do this with every single goal!
The beauty of this is that they are able to make these decisions without judgment!!
They no longer have to feel guilty about their competing priorities—
“It’s not that I don’t love my kids…but I feel like I have educated them and given them a really good start already and now it’s our time.”
“It’s not that I don’t love my grandkids, I just hate my work more…”
In making it easy for them to answer honestly, you’re in a much better position to meet, or exceed, their financial expectations.
Wrapping It Up
To summarize, the Goals-Based Construct helps your clients get excited about, engaged in, and committed to their financial planning:
- Dream sessions: This is where clients identify their aspirations and goals.
- Know them: Focus on what they say is important (not what you think is important).
- Tailored solutions: Provide solutions that are based on their priorities.
- Real measurements: Gauge success based on funded status, not artificial benchmarks.
- Stay updated with questions: Clients’ financial priorities will change based on life circumstances. Make it easy for them to help you, help them, by asking non-judgmental questions.
As you help your clients find their own best answers, it’s going to be important that you know them in ways that you probably don’t currently know them. It’ll require a communication style that is far more “Question Centered Therapy” and far less “used car salesman” (or stockbroker).
