July 4, 2012
Application of Financial Life Planning in Practice: A Personal Experience
Sadique Neelgund
A year ago, I completed a course on the fundamentals of financial life planning with Money Quotient in USA, and I was enthusiastic to introduce the practice of financial life planning to my clients. In the next two months, the Money Quotient team provided excellent support and encouragement, which helped me to take the plunge in June 2011.
I decided to initially introduce financial life planning to a couple of existing clients who had been with me for quite some time, and coincidentally their contracts were up for renewal in July. I thought there couldn’t have been better timing to introduce financial life planning.
A Cultural Perspective
To give a cultural perspective, in India, most financial decisions are managed by men with very little influence by women. It is not easy to get the wives of clients to the conversation table along with their husbands to express their feelings on topics involving money. The only area women are generally involved in is managing the household expenses on a monthly basis.
Women also tend not to get involved in finances because of the trust factor with the men in their families; they usually leave it to their father, husband, son, grandson, etc to manage personal financial issues. Many also find finance boring because no one engages them in a dialogue, and the financial community uses jargon to keep them away.
To circumvent this, I meet most clients at their homes because I have found that the best place for conversations and interactions with other family members. The spouses will at least interact for a brief while during our conversations. Clients are also more relaxed and open up to conversations better. For working professionals, we insist on the weekend when they are more relaxed, and for the self-employed, we meet on weekdays as long as they are relaxed and they can give us uninterrupted time for conversations.
Extensive Meeting Prep
I prepared for the meetings extensively and made sure that the client and his wife also prepared by reading up on the materials I had sent. I requested the clients allocate three to four hours of uninterrupted time for each day for our conversation based on the life planning tools of Money Quotient.
During the meeting preparation for the first client, I realized this was the most extensive preparation I had ever done for a client meeting. This included meditating and clearing my mind to be ready to listen while I was on my way to their home for the meeting.
Deep Client Conversations
During the end of the second day of conversations with the client and his spouse, I came to fully realize that the language of financial life planning is truly universal. Over those two days I learned so much about the client, the client learned so much about his spouse, including her needs, fears, concerns, etc., and the spouse learned something new about her husband.
I think it was one of the most touching, deep conversations I have had with any client. And, for a change, I was a sharp listener. After these meetings, I put together the key elements of their financial life plan and action plan and sent it to them.
It has been a year since I initiated the practice of financial life planning, and I met the client recently to check on the progress of the new initiative. The client, his spouse and their kids are happier and are enjoying their lives more. I found that one of the finer aspects of financial life planning is to facilitate clients to find their own small goals that matter a lot to each individual in the family, and then communicate those goals so that each one in the family rallies around to help achieve them.
Too often, financial planning has focused on the future and sacrificed the present in terms of quality of life. I think financial life planning bridges that gap nicely while taking care of the future as well.
Since I embraced the practice of financial life planning, life has been truly rewarding for me and my clients.
This article was earlier published in June Issue of FPA’s Practice Management Solutions.
Authored by,
Partha wonderful sharing. This is the future of this business as this model benefits both investors and advisors… I can see how much you love your work and the overall concept of life planning.
Absolutely inspired to see your indepth preparation of meditating before you meet your clients…This is so very sacred and inspiring….
You are so committed to your clients and that is what really matters at the end of the day.
nandish
Nandish..Thanks a lot for your kind words!
Often times family financial planning is done secretly rather with entire family. Mind set has to be go as it is necessary for all family memebers to know about the finance. Getting couples together on financial planning is pretty much a daunting task for planners. Coz so many excuses, fear and other related factors keeps them away and pave the way for postponement of decisions.
Anyway I really thoroughly benefited out of this wonderful you have shared I must really thank for posting such valuable insights.
Thanks
Regards,
Badarish
Badrish.. Thanks for your kind words..
You will be surprised to know that couples are today are much more open to discuss personal finance than before. That has been my experience. Especially the younger couples are a lot more comfortable talking about their finances to their advisor. Of course, we as advisors have to be pro-active and follow up vigorously to get them to the conversation table. The fear of the couples is not in postponing to do financial planning. They are just wary of again being sold a wrong product and the 'trust' factor has come down drastically in the last 4 years due to mis-selling and lack of sharing the knowledge and information to clients. If we focus on helping them with right information at regular intervals answer their queries honestly and frankly, they will buy into our idea of ' we are here to help them identify and achieve their personal and financial goals'. Of course, all these applies to the older clients as well.
For all this to happen,we advisors have to constantly update on what is happening around us, the global economy, markets which helps to bridge the 'trust' factor. Most of the trust factor falls into the category of 'Is my Advisor having enough knowledge and capability to manage my money'.
Partha
Can you share what exactly are the Money Quotient Tools that you use.
Parag
Parag..The Money Quotient tools are proprietary licensed tools which you can buy after completing the course 'Fundamental of Financial Life Planning'[Level 2 to Level 4].
How ever, the level 1 tool called Sampler Tool will help you get started with the Money Quotient Process. You don't need to attend a workshop for this. It containts three data gathering tools which helps to reach out to both prospective and exixsting clients very effectively. It is a great differentiator tool which helps you to understand clients better [both qualitative and quantitative] and also conveys the uniqueness of your practice. By using these tools you can really help clients to identify/prioritize on their key goals that they will want to achieve – be it personal as well as financial goals.
The Level 1 tool doesn't cost much and If am not wrong it is hardly $ 100 or $ 150. You can use these for atleast three to six months and may be 1 year before you will like to move to next level and for that you will need to attend the workshop that I had mentioned above.
I initially started with Level 1 tool and I really found it very useful and interesting. Immediately, I went for the workshop and purchased the Level 2 tools because I found great benefit in using those tools to help clients much better. For eg with Life Planning practice I am able to add tremendous value to clients and they in fact pay more for my services from this financial year.
One has to understand that Life Planning does not mean just using these tools but first understanding it which involves attending the intensive workshop to gain deep insights and knowledge on Life Planning and how and when these tools should be used with clients.
If you have bought into the idea of Life Planning, it gives you an opportunity to understand yourself better and how you want to change your life [through the usage of tools and process] and in turn help clients change their lives for better. It is not an overnight change mechanism but a work in progress that you will be happy and proud of.
Not all tools have to be used at one go and one can introduce gently one by one as the year goes by.
What kind of tools do I use? You can go to the website moneyquotient.org and check out the details.
http://www.moneyquotient.org/index.php?pageID=26
Hope this was helpful.
Cheers
Partha