by Mitch Anthony

One of the greatest powers of money is that it can help buy independence. All of us want to get to the point where we can do what we want, when we want, where we want, and with whom we choose—a nearly perfect description of Return on Life™ (ROL).

I’ll bet many of your clients are surprised by having to deal with “life” after having been laser-focused on accumulating assets for so long. Life was never part of the discussion with their advisor, or even with their spouse. In this article, we’ll discuss how to change that going forward.

As you already know from previous articles, retirement planning is more than ROI—it’s equal parts ROI and ROL. And if you really think about it, the sole purpose of ROI is to fund ROL.

You’ve heard my definition of ROL before, but just in case you need a reminder: ROL is getting the best life you can with the money you have.

For many people, their philosophy is just the opposite. They get a raise and use the money to secure a larger mortgage so they can buy a bigger house with rooms they won’t ever use. As soon as their car loan is paid off, they buy the latest model instead of getting a few more years out of the one they own outright. They push it to the limit, instead of limiting the push.

Retirement planning is a perfect example. For too long we’ve focused on an arbitrary number, instead of first asking our clients what their goals are.

Because ROL is an integral part of retirement planning, integrating retirement coaching into your practice gives you an edge over other financial planners and robo-advisors that are only focused on ROI. The goal with retirement coaching is to help your clients understand that the ultimate goal of money is to get the best life possible with the financial resources they have. If you ask your clients how much has actually changed when they reached their “number,” I bet they’ll tell you that, day to day, their lives have pretty much stayed the same.

Starting the Dialogue

The first question you ask your clients should not be about money, it should be about how they use money. Without focusing on ROL, ROI will not have the impact it should. Encourage your clients to build on what they really want, instead of what they think they should aspire to. Instead of getting a larger mortgage and building a bigger house just because they can, you can have a conversation with your clients about enjoying life now, in a house they’re already comfortable in. As most of us have probably learned, just because you can, doesn’t mean you should.

By looking at retirement planning from your clients’ perspective, you can help them see the picture more clearly. If you’ve read The New Retirementality, you’re already familiar with two images: a gerbil on a wheel chasing a dollar, and a boat with a dollar bill as its sail. The gerbil represents a sole focus on ROI—always chasing a number, and never being satisfied. The boat represents ROL—money is a utility (a sail) that can be skillfully manipulated in order to navigate. In other words, we control money, instead of money controlling us.

Retirement coaching involves working with your clients to help them broaden their perspectives on what money is, and what it can do. If you want to put together an effective financial plan, you need to understand your client’s history, life transitions, life goals, and principles. Understanding these perspectives has a direct impact on the amount of money your client needs.

Because you’re a financial planner, and not a life coach, it’s essential to bring the conversation back to money and the impact on your client’s financial planning. In our retirement coaching sessions, Steve Sanduski and I review the ten facets of ROL. Each of these facets is a way to help you and your clients determine where the gaps are, and how much they’ll need to achieve their goals.

On a scale from 1 (completely agree) through 5 (completely disagree), have your client respond to each of the following statements:

Facets of ROL
(1 = Completely agree   5 = Completely disagree)
1 Return on Work

  • I am compensated well for the value I bring.
  • I get great satisfaction from the work I do.
1 2 3 4 5
1 2 3 4 5
2 Return on Residence

  • I feel my home is the right place for me.
  • I can comfortably afford the place(s) where I live.
1 2 3 4 5
1 2 3 4 5
3 Return on Achievement

  • I’ve been able to fund my needs and pursue my aspirations.
  • I am pleased with my accomplishments in life.
1 2 3 4 51 2 3 4 5
4 Return on Learning

  • I feel I am effectively using my finances towards education.
  • I am involved in lifelong learning through reading, training, and association with others.
1 2 3 4 51 2 3 4 5
5 Return on Leisure

  • I’ve been able to fund my hobbies and interests.
  • I am taking the time to visit the places I like to see, do the things I like to do, and spend time with the people who are important to me.
1 2 3 4 5
1 2 3 4 5
6 Return on Health

  • I’ve been able to maintain my health without financial stress.
  • I regularly confirm the status of my physical health and overall well-being with my doctor(s).
1 2 3 4 51 2 3 4 5
7 Return on Relationship

  • My relationships have not been adversely affected by money matters.
  • I can afford to take care of the people I want to help.
1 2 3 4 51 2 3 4 5
8 Return on Purpose

  • I am living my life “on purpose.”
  • I feel I’m able to live and give generously with my time, talents, and/or finances.
1 2 3 4 5
1 2 3 4 5
9 Return on Freedom

  • My money has been utilized in ways to help me free my time.
  • I feel freedom in my work, relationships, and how I live my life.
1 2 3 4 51 2 3 4 5
10 Return on Security

  • I feel secure about my current financial situation.
  • I feel confident about my financial future.
1 2 3 4 5
1 2 3 4 5

After your clients have ranked the facets, focus on the lowest rankings because those are the ones demanding the most attention at this point.

Successful living requires that your clients consciously invest both time and money toward these ten facets of ROL. Although this can be a demanding process, as a financial planner you are in the perfect position to have that conversation, get things started, and add value.

The facets you focus on will ebb and flow over time. Don’t expect to focus on all ten all the time—that is simply too overwhelming to both you and your clients. Focus on a few facets, make progress, and then move to others.

Here are some dialogue starters to use when you and your clients are discussing the results:

  1. Did the results surprise you?
  2. What next steps can you think of to start making progress in your areas of emphasis?
  3. What support would you need to help you follow through?

Remember, your role is to help your clients keep these facets in perspective as they relate to money and to help them understand which facets are most important to them at any given point. Your job as a retirement coach is to encourage them to follow through, once they’ve left your office.

An advisor who wants to stand out from the pack understands that ROI and ROL are integral—and you need both for a complete picture.

© 2017 Mitch Anthony

Mitch Anthony is the founder and president of Advisor Insights Inc.and the Financial Life Planning Institute, the leading provider of financial life planning tools and programs for the financial services industry.

For almost two decades, Mitch and his team have provided training and development for both individual advisors and major organizations throughout the world. Mitch personally consults with many of the largest and most-recognizable names in the financial services industry on both financial life planning and relationship development.

Mitch is a consistently top-rated presenter who has spoken to groups ranging from 10 to more than 10,000. He has been named one of the financial services industry’s top “Movers & Shakers” for his pioneering work. Through the Institute, he has partnered with Texas Tech University, the University of Georgia, and Utah Valley University to develop financial life planning programs for their undergraduate programs.

Mitch is a sought-after expert for the media, and a regular columnist for Financial Advisor magazine. His columns have appeared on CBS MarketWatch and in the Journal of Financial Planning. His original comic strip “Stanley Brambles, CFG (Certified Financial Guru)”appears monthly in the print edition of Research magazine. Mitch is also host of the daily radio feature, The Daily Dose, heard on over 100 radio stations nationwide.

Mitch is also the author of many groundbreaking books for advisors and consumers, including perennial bestseller StorySelling for Financial Advisors, cited by “Financial Advisor” magazine as the number one “must-read” book for financial professionals. Mitch’s other books include The New Retirementality (now in its 4th edition), From the Boiler Room to the Living RoomYour Clients for LifeYour Client’s Story, and The Financial Lit-KitThe Cash in the HatThe Bean is Not Green, and Where Did the Money Go?. For information on these books and more resources, click here. Contact Mitch at [email protected].