A prospective client who had been referred by a professional connection interviewed me over the phone recently and simply stated he can buy what he wants, doesn’t need insurance and any investment returns are relatively immaterial. In those circumstances what value can I add?
It’s a great question and one that goes to the heart of the role of a financial planner and in particular, the planner’s capacity to ask the difficult questions. We had a great conversation and I spoke about the value of the independent voice and the planner’s role to question one’s innate assumptions. I confess I like the questions to be SMART, but not with the traditional business meaning (Specific, Measurable, Action oriented, Realistic and Timed) instead those with a personal resonance linking the goals (Treasured by you, Memorable to others, Awesome in scale and Requiring your Single-Minded dedication to achieve them). I know they are not as catchy but I feel it means more and these days tend to ask clients to answer questions in this way.
To help my clients on their way I normally ask most, if not all of these difficult questions:
To whom do you want to leave your money, at what age and with what conditions? (Especially, if the sums are large). How much money is the right amount for your children to inherit?
- What do you believe is the right balance between enjoying money now; preserving and investing it for future security; leaving it to family members; and using it to make a long term difference in some way?
- If you knew you had only 6 months to live, what would you do differently in the next six months? If you knew you only had five years to live, what would you do differently in the next five years?
- How would you deal with the situation if you or your spouse or you parents became incapacitated in old age?
- How will you exit from your business? (for business owners)
- What will motivate you once you have achieved financial independence? What will you do then? At what age are you aiming for, and why?
- What is really important to you to achieve? Are your goals SMART?
- If you received a massive cash windfall, how would you spend it? This is your hypothetical shopping spree! And if you had all the money you could ever need, how would you live your life?
- If you had to cut your working week by a half how would you do it?
- What would you like your obituary to say? Why? When you review your life will you say, “I’m glad I did” or “I wish I had” ? With these questions in mind will you change anything?
Can you answer the above questions? I am sure it has got you thinking of the bigger issues that we cover in our Financial Planning Service!
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