Our Time Has Come

Mitch Anthony

October. The trees are changing from green to gold to blazing-red, and there’s a special crispness in the air. For most of us, fall is a welcome change of seasons. In many ways, it feels more like a beginning than an end.

Unless you’re stuck under a rock, it’s pretty clear that the same thing is happening in the financial services industry. Investors stung by years of falling returns have finally decided that ROI doesn’t cut it anymore––ROL (Return on Life™) has taken its place. Financial planning is finally being replaced by financial life planning.

Nearly two-thirds of the respondents to the 2009 National Consumer Survey on Personal Finance did not have a financial plan. One of the reasons cited was confusion over what a financial planner does. This confusion represents an opportunity for financial life planners to step up to the plate and hit a gigantic home run. 

Life at the Center

Financial life planning is centered on our clients. As advisors, we take on a secondary, supporting role. The life of our clients is the axis around which financial discussions need to revolve. Although most of our clients are smart enough to know that money is not the be all and end all, they do perceive it as a means to building a life they want, while avoiding a life they will regret. They quickly connect with those of us who posses the skills to connect their money to their lives. Intuitively, our clients will see the wisdom in developing a plan to use their money to make a life rather than using their lives to make money––ROI versus ROL. 

Most individuals react positively to the advisors who posses the skill to draw out their vision for their lives and help facilitate the materialization of that vision. Money has a powerful meaning to our clients as individuals. Their money was obtained with a defined set of values and has within it the seeds of a legacy they intend to sow for future generations. To make the life connection, we need to draw out the intended purpose of the money, the values that created those assets, and the legacy our clients intend to leave.

That is the value you bring as a financial life planner––and it’s what investors are looking for.

As clients shift from ROI to ROL, your role will shift. Your clients will demand it. When was the last time you heard a potential client say, “I’m looking for someone to sell me financial products”? Embracing financial life planning does not change the traditional role of the advisor, it simply shifts the context for the discussion between you and your client into the arena where that client is most invested––his/her own life. Moving from salesperson to Sherpa makes your role more valued––and valuable. Let’s take a closer look at the three roles that comprise a financial life planner:

Partner

In order to form a satisfying partnership with your clients, you have to get to know them. As is the case with a successful marriage, partners in an advisor/client relationship have equal status. Just as a Sherpa does with climbers, you will walk alongside your clients as they pursue their life goals, while helping them realize their objectives. To earn the status of partner, you need to invest in your relationship by getting to know your clients as individuals. 

Guide

Regardless of age, most adults realize they lack the discipline to stay on track. They need a guide––someone they know has their best interests at heart. Call it a personal CFO or quarterback––the role of guide is one in which you lead, affirm, hold accountable, and motivate. As a guide, you advise your clients about viable options and motivate them to make decisions and take actions. Your clients count on you to help them choose the right path. 

Educator

Most of your clients don’t want to be left in the dark––they want to understand the decisions they are making. If they don’t, it is your responsibility to ensure that they do. Clients are fed up with advisors who use financial services speak––they want plain English. Be proactive instead of patronizing by equipping your clients with the tools to help them make knowledgeable and wise financial decisions.  Not only will this approach make your clients better clients, your credibility will increase as well. 

Moving from ROI to ROL involves moving from transaction thinking to transition thinking. This process involves looking for effective ways to help each of your clients make the connection between financial goals and life goals and priorities. 

Adapted from Your Clients for Life by Mitch Anthony (©2006 Mitch Anthony). Available at http://mitchanthony.com/BOOK_Clients_4_Life.html.

Mitch Anthony is the founder and president of Advisor Insights Inc. and The Financial Life Planning Institute, global training companies serving advisors and the financial services industry. He is the author of several books for advisors including StorySelling for Financial Advisors. Mitch’s newest book, The Cash in the Hat is available from Insights Press (http://mitchanthony.com/BOOK_Cash_in_the_Hat.html). Mitch Anthony is a contributing editor for Research magazine and his column “Financial Life Planning” appears in Financial Advisor magazine. He has been named a “Mover & Shaker” by Financial Planning magazine and is frequently quoted by the media as an expert on financial life planning.

Contact him at mitch@mitchanthony.com.

© 2008 Mitch Anthony