“The only two things that really make you happy are having your health and people that love you, and money can’t buy either one.” — Warren Buffet
I recently spoke at a conference in England and was pleased to learn that my talk hit close to home for a lot of people in the audience—and I think my message might be of equal importance to you and your clients.
Instead of placing money at the center of the conversation, life-centered planning places life at the center and treats money as the tool needed to get your clients on the path they choose. This perspective is essential because how clients view money influences their decisions, including financial planning.
Here’s a question to ask your clients: Do you view money as your ultimate goal or a utility to help you live the life you want?
Granted, when presented this way, clients will no doubt tell you they view money as a means to an end, not the end itself. The question is designed to help them (and you) focus on what’s important. And the reality is that AUM is not your clients’ focus—ensuring those assets support their goals and dreams is what matters to them.
A big difference between AUM-focused advisors and life-centered planners is how they view their clients. With life-centered planners you are not simply looking at your clients as numbers on a balance sheet—each client is a unique individual with a unique situation who needs a unique solution. Your goal is to understand those clients thoroughly—and then develop a plan that is unique to their goals personally and strategically.
Financial advice is still one of the least trusted professions, even though there are, in my experience, more honest advisors out there than dishonest ones.
Life-centered planners dispel that myth because they focus on the belief that people are more important than the assets they possess, and that to best serve clients, they must put their clients’ lives and financial well-being at the center of the process.
Focusing on products and homogenized advice serves institutions instead of individuals—instead of being a forethought, clients become an afterthought. I’m not saying there aren’t products that are important and useful to your clients, but whether intentional or not, there can be a perceived conflict of interest. When you focus on advice instead of products, that conflict becomes a non-issue.
Because life-centered planners need to know as much about their clients as they do about their finances, they don’t even talk about money until they understand each client’s back-story and history with money; their present situation and where the risks and opportunities lie; and their future transitions, prospects, hopes, and dreams. Life-centered planners need to know what sort of life their clients are trying to achieve and maintain.
Frankly, this isn’t rocket science. The idea is simple but profound: money is a means—a tool. Money is not the goal. Instead, ROL is living the best life you can with the money you have.
The result of this approach means that you no longer have to sell—instead you are truly advising. And isn’t that why you got into this business in the first place?
Funds and products will still be part of the mix, but only as needed and where appropriate. Instead of driving the process, they will support it. The underlying message of life-centered planning is that until you know your clients as unique individuals, you have no right to talk about their money or tell them what to do with it.
Let’s face it: your clients’ money is there to serve their lives, not the other way around. And you’re there to serve your clients, not their money.
Don’t get me wrong: just because an advisor focuses on money doesn’t mean he is ill-motivated or suspect in nature. The key difference between AUM-focused and life-centered planners is that AUM-focused planners use inferior processes. This is an important difference because their processes fail to account for clients as an individual with nuances and a unique personal story. Even good advisers using inferior processes produce inferior results.
Given the choice, my assumption is that clients would prefer to work with good people who are using superior processes. Clients will appreciate that you are viewing them as a person, not a product—and that will ultimately lead to more clients for life, more AUM, and more referrals.
Now that’s what I call a superior process!