Using Financial Life Planning to Grow Your Practice

by David I. Leo

As business coaches to financial advisors and planners, my partners and I focus on optimizing our clients’ business practices by taking into account the four key practice areas that are essential to success:

1.  Business Assessment

In order to determine where you want to go with your practice, you need to understand where you currently are. Identifying that gap helps you define the improvements you need to focus on. When working with clients, we focus our initial practice assessment on an advisor’s book of business and core processes so we can begin to identify strengths, weaknesses, and opportunities for growth.

2.  Business Planning and Development

By establishing mission and vision statements along with business goals, we define where we want the business to go. Combined with the assessment we conducted in step one, the gaps become clearer and we can determine what needs to happen to improve the practice.

3.  Client Solutions and Service Delivery

Developing a structured contact strategy involves using a client segmentation model that takes into consideration a number of factors beyond just revenue and assets. In addition to a contact strategy, we establish a set of service offerings and deliverables based on the business model of the advisor’s practice. Any solutions we develop are focused on structure, organization, and accountability.

4.  Activity Management

Finally, while we have defined the specific actions that need to be taken, we also establish tactical metrics that hold the practice owner accountable.

All of the coaching we undertake is based on the following principles:

• Being organized vs. intuitive
• Being planned in advance vs. random
• Being written down vs. relying on memory
• Being strategic vs. tactical
• Being consistent and predictable vs. unpredictable and undisciplined
• Being proactive vs. reactive

As a student of Mitch Anthony, I have been interested in integrating Financial Life Planning into our coaching practice. In fact, Mitch’s concepts and tools are also about these principles. Financial life planning help advisors ensure they are providing in-depth, consistent support for each client based on their individual needs.

It is virtually impossible to offer the same type of services to every client. The successful advisor understands that the key to having a manageable and successful practice is figuring out a proper segmentation and then implementing a service model that supports that segmentation.

With our book segmented and our service model developed, we select Life Planning tools that are appropriate for each client’s need and value to the business. At this point, I need to point out that this is our analysis and not necessarily Mitch’s view. While every tool is excellent, each client has different needs and we have to be realistic about how much we can invest in each individual based on their value.

For example, we find that several tools are appropriate for all clients including the Financial Checkup, Life History Worksheet, and Life Transitions Profile. In addition, these tools are also excellent for qualifying prospects.

Some tools including Wealth-Care Planning are great for initial conferences with high net worth prospects, while others including Income for Life are absolutely great when developing a fee-based financial plan.

Mitch’s rich toolset means that we not only have tools to use during initial client meetings but also during subsequent ones. One such tool is the New Retirementality Profile tool. Once a suite of tools and business model are established, each advisor or planner can develop a service model that works for their business. Here’s a sample of such as partial service model.

Notes:

I = Initial intake tool

The yellow areas represent a small subset of Mitch’s toolset

The blue areas are a subset of non FLP tools

We have defined 16 core processes, which represent about 20 percent of the processes that have an 80 percent effect on developing an effective, efficient practice. We have estimated that financial life planning tools can positively impact at least 75 percent of these processes.

Here are a few examples:

• Client Needs Analysis. Clearly Financial life planning provides tools to get to the core of a client’s needs and wants. The toolset is so powerful that it brings to mind what Dante said in Divine Comedy: “Hell is the state in which we are barred from receiving what we truly need because of the value we give to what we merely want. The ultimate hell is getting what we want at the cost of what we need.” Life planners certainly understand client dreams but they first take a pragmatic, needs-based approach. The beauty of the approach is that it’s organized, reliable, consistent, and proactive.
• Financial Planning. Financial planning has often relied more on left-brain tools focusing on the logical part of analysis. These are necessary, of course, but not sufficient. Until Financial life planning, there have been few if any tools that focus on the right brain. In a book Mitch recommended to me, “A Whole New Mind,” author Daniel H. Pink states, “the ‘right brain’ qualities of inventiveness, empathy, joyfulness, and meaning––increasingly will determine who flourishes and who flounders.” Financial life planning can help you and your clients flourish.
• Client Communications. Financial life planning is used to deepen relationships by taking them to a new level.
• Introductions and Referrals. Think about the possibilities when clients tell you how much they have gotten out of your approach to needs and wants analysis. You reply, “I am pleased to see how much you have gotten out of our approach. I am sure some of your closest friends might also see the value of a financial life planning approach. Would you be willing to introduce me to your closest friend?”
• Marketing Plans. Financial life planning provides a base for intimate roundtable events—small personalized meetings of high value clients and their friends. It also fits nicely into a seminar, if that’s part of your business model.
• COI Development. Think about bringing your approach to CPAs and Estate Attorneys and having them help you identify clients who could benefit from the financial life planning approach. You can conduct joint meetings with those COIs and integrate their business offerings with your approach to what it is they do. There are many possibilities. 

Using a life planning approach, you can assist your clients in developing a more successful and satisfying relationship with money by:

• Helping clients focus on the true values and motivations in their lives.
• Determining the goals and objectives your clients and prospects have as they see their lives develop and evolve.
• Using financial life planning values, motivations, goals, and objectives to guide the planning process and provide a framework for making choices and decisions in life that have both financial and non-financial implications.
• Helping clients make smart choices about their money so they can accomplish their goals for the reasons that are important to them.

These are a few examples of ways you can use financial life planning to differentiate yourself in the marketplace, not just with clients, but also with prospects and centers of influence.

David Leo has been coaching financial advisors for ten years, and has multiple decades of experience working with the financial services industry. Prior to coaching, he was with PaineWebber’s Private Client Group as well as IBM where he held a variety of positions in sales, marketing, management, and business process reengineering consulting serving the financial services industry.

David founded Street Smart Research Group LLC and recently merged his coaching practice with Focus Partners, LLC, a leading practice management and coaching firm (www.focusvpm.com). As a productivity specialist, David brings extensive knowledge of business and sales processes and the application of productivity enhancement tools, techniques and technologies to his clients. In addition to coaching, David facilitates meetings, trains advisors and managers, and provides a variety of financial services consulting. David has an MBA in Management from New York University and an undergraduate degree from Drexel University. Contact David at david@focusvpm.com, or call 212-598-4229.