After meeting with a colleague this week to discuss how we could collaborate on running workshops for companies and individuals to regain control of their own future financial planning, I realised the significance of the order in which we start and conduct these conversations.
Through this meeting I noticed subtle differences in the approach that I adopt with the 200 alumni of my Preparing for Retirement Program, to some of the traditional approaches.
Not to say which approach is right or wrong, because every individual is different and often we are doing the same work with the same intention, but in a different sequence.
So tell me can you see which sequence would work for you?
I have experienced the benefit of people connecting with their own Life-Centred financial plan and seeing finances as just one of the key building blocks of a successful retirement or life journey.
My belief is that we each need to look at many of the non-financial aspects of lifetime personal wellness before diving into the money conversation around a specific future point in time. I have seen what happens when we are able to connect with our individual, unique purpose and interests; we unlock true self-motivation and blind spots that influence our behaviour.
They say 95% of our actions are dictated by our subconscious brain, where our pre-programmed patterns reside. So by bringing that self-awareness into the front of mind, and into our planning, we give ourselves an advantage.
Many traditional approaches deal with the “how much is enough?” question, using a living-standards calculator that you can self-implement and use as a personal motivator and tracker of how you are progressing.
Regardless of approach, I hope we all agree in principle on 7 fundamentals:
- Educating and empowering public is the best tool to solving the Retirement Crisis (only 6% of South Africans have enough money to retire at 65, but that percentage has not changed in 20 years of financial literacy training!).
- Retirement is a myth for many people – either from choice or necessity, so talking about what the latter stage of life is and in only one way is a cause of anxiety for many people who don’t relate to it.
- Everyone craves certainty, but it is an illusion because everything changes at some point. However, a framework to manage complexity, allowing us to know how we can control and how to revisit choices; that is powerful in managing our expectations.
- Training the public to use meaningful planning tools is desirable where complexity is relatively low, especially if these tools build confidence and create positive outcomes.
- Lifestyle Financial Planning is not a low cost/low value service offering, and the value is significantly greater than many people currently realise, because they have not been exposed to the new method of engaging and conversing. What would be the benefit if you knew you did not have to buy a product to receive the advice that helped you achieve your Life Aspirations as a result of Financial Coaching*?
- Financial Advice has value for many clients – either due to technical complexity; eg. tax planning, estate planning, product knowledge of features and benefits, ensuring liquidity is sufficient to fund life goals, or because it helps in managing human nature which may include aversion to money conversations, poor organisation, lack of aptitude for numbers, distrust of financial markets and working with partners to achieve alignment, etc.
- It is preferable to offer high value advice for a fee, advice fees need to be separate from the product fee, and clients should be able to self implement if they choose.
Whichever way our conversations lead, we have to be seeking out ways to keep our services relevant and life-centric as this is what will ultimately create the value for our clients. We can’t simply say on our websites that we put our clients first, and then our conversations revolve around what they can buy from us. It’s not a simple answer, but rather a journey that we need to go on first as advisers, before we can engage with our clients along their journeys.
*Financial Life Coaching finds the habits, values, attitudes and intentions each person (Client) has, both in life and around their money, and helps clients to navigate them (and their money) to realise their life possibilities.