FINANCIAL LIFE PLANNING

Mitch Anthony

You must put your clients ’ numbers in the context of their story .

ET ’ S SAY YOU ’ RE MY CLIENT , AND THAT I KNOW YOUR NAME , your address , your Social Security number and other account numbers . I know the whereabouts of those accounts and the balances within them . I know where you work and your adjusted gross income . I know your family members ’ names and ages . I know the date you were born and the fact that you consider yourself a “ moderate ” risk taker .

But after all that , I should ask : Do I really know you ?

Financial firms are emerging from one of the most tumultuous periods in social and political history , and one of the biggest discoveries we ’ ve made is that we don ’ t know nearly enough about the clients we serve ; as a result , our relationships are at risk . Many things have led to this state of uncertainty , but in the big picture it ’ s due to changed perspectives and changed realities .

Let ’ s start with clients ’ eroded trust . Many of them have had their faith in the markets shaken , as well as their faith in the institutions they once revered and their trust in the industry ’ s judgment . They ’ re rethinking what they consider to be real things of value and have raised their expectations .

While advisors have done an excellent job of gathering facts and numbers about their clients , many have fallen short in terms of understanding who their clients are . To make up for it , they must become more personal . They must ask their clients deeper questions about their history and the challenges they face and find out what consumes their time , attention and resources .

The concept of client discovery must evolve to include the stories clients

Every firm can improve the way it comes to understand clients , which means improving the content of the conversation , and thus the connectivity . tell about themselves ( not just the numbers measuring their financial situation ). That means gathering through anecdotes . The following chart describes both the financial aspects advisors usually focus on in discovery and the personal things they could ask that are often missing .

Financial Profile Personal Profile

• Net Worth • Experiences

• Liabilities • Concerns

• Cash-Flow • Responsibilities

• Money Goals • Hopes

For the last decade I have helped some of the largest firms ( as well as small ones ) develop their client profiling . Every firm can improve the way it comes to understand clients , which means improving the content of the conversation , and thus the connectivity .

First , we should strike a balance . I ’ ll never forget the time some years ago when a major firm asked me to assess its new and improved client profile . The questionnaire had 100 questions ! That wasn ’ t the worst of it — 95 of those could be answered with a fact or a number . I don ’ t know anyone who looks forward to answering 100 impersonal questions . Asking clients for an endless litany of useless information is no way to engage with them .

Yes , advisors need numbers if they want to help clients improve their financial situation . How else would they establish baselines and financial goals ? But they must gather these figures in the context of a story , a framework that includes

JUNE 2024 | FINANCIAL ADVISOR MAGAZINE | 19