Integrating Stewardship Into Your Practice

Richard B. Wagner, JD, CFP®

Editor, InsideMoney.org

As we move our practices to the living room, a natural next step will be the integration of a stewardship policy into your practice. A stewardship policy is a distinct, focused process that culminates in a personal policy of self-governance and asset management. It engages the “careful and responsible management of [that which has been] entrusted to [an individual’s] care.” Ideally, these personal, written policies serve as meaningful documents of duty, mission, and purpose for your clients. The policy development process itself provides an objective outside-in process for looking at an individual’s self, duties, and obligations. It recognizes that most of your clients have opportunities and blessings outside of money, and  brings those possibilities to light and life.

The “big three” objects of stewardship are time, talent, and treasure. Of these, money is probably the least important to those blessed with basic sufficiency. Done right, the stewardship policy puts your client’s financial resources in perspective.

As you already know, financial wealth is a mixed blessing. Some folks have a lot, some little. Regardless, your clients need to determine their responses to opportunities. They must also address how they will allocate the time of their lives and their miscellaneous aptitudes. A stewardship policy addresses all of these issues in an organized, integrated, and cohesive manner.

A “stewardship policy” follows the logic and framework of a financial planning “investment policy.” As with investment policies, stewardship policies describe the client’s basic characteristics. They set forth facts, analyze possibilities, establish constraints, inform decision-making, and memorialize judgments. They serve to structure and engender decision-making and personal action while requiring periodic monitoring and review.

From there, the instruments become different. In addition to financial assets, a stewardship policy addresses matters of time, talent, training, and the nontraditional assets entrusted to your client’s care. The “Goals and Objectives” section will specifically include personal life goals and priorities as well as those involving property and money. There will be sections that specifically confront your client’s unique circumstances. What is his training? Does he have special skills or loves requiring priority? Do tricky issues need light touches? Are there physical or mental “challenges” to be considered? Do loved ones have special expectations? Are there unique legal issues affecting the individual? Is he the current caretaker of notable family memorabilia, historically significant artifacts, or important art? What about family complications, emotional consequences, or other disturbing implications? The stewardship policy process opens these questions for an objective, thoughtful, and thorough process.

The stewardship policy process also unlocks issues of work, employment, and values. Does the individual need to work for money? The stewardship policy should articulate your client’s responses after thoroughly discussing all the issues. It should also underscore methods of addressing needs that most of us fill through work: “Idle hands are the devil’s playground.” By definition, a stewardship policy’s purpose is to use those hands effectively.

For most of us, our primary access to money comes through employment.  Accordingly, employment is a non-negotiable, precondition for earning the money required to live, now and in the future. Money pushes us into life regardless of personal predilections. However, there are collateral benefits. Employment consumes time and talent. For our psychological and social development, “work” is where we test ourselves, learning our strengths, weaknesses, and capacities.  We develop abilities to distinguish between compliments and soulless flattery, between friendship and manipulation. It is how we contribute to the world and meet our friends, and as such, is an integral part of any stewardship policy and discussion.

Importantly, employment is a source of our identity and self-esteem.  Resumes and curricula vitae serve as talismans, visceral reminders of life’s passages. “Jobs” provide validation.

All of this may be missing for your high net worth individuals. If financial resources are sufficient to make paid work optional, scopes of possibility expand to include absolute indolence. Yet the blessing is mixed. The question “why?” is an authentic query. Waste, addiction and unhealthy choices become more likely under this scenario, making a stewardship policy, and your involvement as a planner even more critical.

Stewardship policies are particularly appropriate in these cases. They serve to provide appropriate focus, forcing individuals out of their moneybags and into life through visceral reminders of both money’s limitations and possibilities. They enable individuals to see themselves and their possibilities. They spotlight possible voids.

Human beings naturally search for meaning and significance. This is not dependent upon financial resources. However, money is likely to have a dramatic impact, enhancing life’s possibilities or sabotaging them. Stewardship policies serve to provide perspective, organization, and the development of your client’s personal authenticity. The advisor that helps an individual identify and achieve these goals performs a genuine service and adds tremendous value.