Moving from Transaction to Transition

Bob Mauterstock, CFP, ChFc, CLTC

You have prepared for your first meeting of the year with John and Nancy. They have been your clients for a long time. You started working with John when he left a large firm and opened his own law practice in town. Their portfolio looks good at about 40% stocks and 60% bonds, and it has recovered well from the downturn.

As John and Nancy enter your office you notice a slight difference in their demeanor. John is not so upbeat. Nancy is not smiling. After a weak effort at small talk, John turns to you and says, “Bob, I just learned from my Doctor’s office that I have been diagnosed with early onset Alzheimer’s.” Silence. John looks at Nancy and she breaks out in tears. Your mind races through the maze of implications that this news will create. Where do you start? What do you say? Now is the time when you will really have to earn the right to be their trusted adviser.

How many times have you run into situations like this? If you have been in practice for awhile, you have probably witnessed many family tragedies and celebrations. How did you deal with them? Did you shy away and focus just on their investments and insurance portfolio or did you step forward and give your clients the guidance they needed to move ahead?

When do you provide the most value for your client? The answer: when you make the shift from transaction to transition. Transitions are the events that form the substance of our lives. Some of them are planned such as buying a new house, starting a new job or planning for the education of our children. Some of them are totally unexpected, like the death of a spouse, a divorce, or the illness of a child. How you react to each of these situations and guide your clients is what defines you as their Return on Life (ROL) Adviser.

It is important to position yourself as your clients’ ROL Adviser in the very beginning of your relationship with them. In your first meeting, a statement such as “My hope is that we will have a long and fruitful relationship together. Along the way we are going to face some difficult decisions in your financial life. Some we can plan for well in advance and some will take us by surprise. I want you to know that I will be by your side each step of the way and help guide you to make the right decisions.”

This statement will lead you into a conversation about why it is important to collect a lot of information about them––not just their monthly expenses, their retirement goals, and how much they have in the bank, but also their concerns and dreams and any obstacles that could get in the way. You can have that conversation in an informal way, moving from topic to topic as the conversation flows, or you can use a planned approach to make sure that you cover everything––just be sure you have it.

Many advisers will use a preprinted questionnaire to make sure that they don’t miss an important area. These checklists can work very well, but I have found that online tools like those available from the Financial Life Planning Institute are much more effective because they are comprehensive, easy-to-use and can be easily updated and changed as your clients’ lives change. If you have access to www.flponline.net you can utilize the discovery tools on that site to prepare yourself for any situation you may encounter with your client (If you don’t currently have access, we can arrange one for you on a trial basis).

As an ROL Adviser, it’s important that you know what your clients are currently experiencing as well as what could happen down the road. Because of that, I suggest that you begin with the Life Transitions Profile in the FLP Online program. Your clients will have the opportunity to select from multiple potential transition concerns in four areas of their lives: personal/family, work/career, financial/investment, and community/charitable.

In each one of these categories, clients will have many options to select from. For example, within work/career section they will see: new job, starting a business, job loss, phasing into retirement, and many other choices. They can indicate which one of these transitions is likely to affect them and grade it by level of importance (high, medium, or low). Once your clients have gone through this checklist, you can complete a summary report that shows their particular concerns and their relative importance.

The program also helps you recognize the general considerations relative to that specific transition and important discovery questions you can ask your clients. For example, if a client indicated he was concerned about an aging parent, suggested questions are provided to you as his adviser, including: “Do you believe that you will have to assist your parent financially?” or “Do you anticipate that your parent will require special care or living arrangements?” It opens the door to a dialogue that can help address potential problems down the road. From here you can create a plan of action for each transition your client is concerned about.

The program guides you to educational resources available to you and your client to learn more about the issue including websites, books, and organizations that can help you and your clients make the right decisions. As a final step, you and your client discover their Financial Life Commitment to dealing with each specific issue.

Whether you use this program or another, I suggest that you have your client complete a profile before you get together. If you are using the Institute’s program, you can access their information online and be prepared to ask important questions regarding each of their concerns in your initial meeting with them. If you are not using the Institute’s program, I strongly suggest you schedule a follow-up meeting to discuss their results. When a new client sits down with you and they realize you have spent so much time and energy contemplating the important transitions that they may face, you will have turned that client into a client for life. Becoming an ROL Adviser is all about looking out for your clients’ best interests by asking the right questions, paying attention, and being there for them.

Bob Mauterstock, CFP, ChFc, CLTC is the Financial Life Planning Institute’s resident financial life planning coach and is available to help financial services organizations and individual advisors make the transition to return-on-life advising. He is a recognized expert in the areas of succession planning, retirement income planning, and long-term care planning. Bob has been a financial advisor to hundreds of families over the last 30 years and has helped them achieve the move from return on investment to return on life. Bob is the author of the ground-breaking book, Can We Talk?  A Financial Guide for Baby Boomers Assisting Their Elderly Parents.  To find out more about the Institute’s Return on Life Coaching Program®, contact Bob at Bob@mitchanthony.com or (508) 246-7564.

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