What is the difference between a financial advisory conversation and a financial planning conversation?
Giving a client financial advice is concerned with putting the appropriate financial products place. Although this is one aspect of financial planning, a financial planning relationship looks at the bigger picture of the client’s life and how they use money as a tool to live the life they want and accomplish their most important goals.
Therefore, the conversations are quite different.
Of course, you want your financial planning conversations to be a positive experience for your clients. In fact, this is essential, but does positive always mean nice?
Financial planning conversations should always be professional, respectful, compassionate, non-judgemental, and in service to the client. In doing this it can also mean that you raise the level of tension, which may not be nice for the client.
What is a positive financial planning conversation for a client?
Positive means that your client moves towards their goals and, ultimately, accomplishes them. It means them living in accordance with their deepest held values and avoiding the mistakes of the past.
Isn’t this the ultimate goal of a financial planning relationship?
When someone sets a goal there is a gap between where they are now and its accomplishment. A lot can happen during that gap. Whilst it is the financial planner’s responsibility to give the appropriate financial advice, the client is responsible for their own behaviour.
A financial planner is also a coach
As I know from personal experience and being a coach to financial planners and business people for over 15 years people come off track from their goals very easily and very quickly. None of us are immune from getting distracted, having limiting beliefs, and experiencing self-doubt.
In the book, ‘Life Energy’ by John Diamond, M.D. I read how he has asked thousands of doctors how many of their patients follow their advice?
The answer he got, on average, was about 10%! So, 90% of patients fail to follow the advice of their doctor on what is arguably the most important factor in their life. I have no idea what that ratio is in financial planning relationships, but it brings into focus how many people do not follow the advice they are given.
Have you accomplished every goal you ever set?
How many times have you allowed one of your goals to get sidelined or dropped? It has happened with me many times.
It is also true that I have made the most progress when my coach has raised the tension levels with me.
They have brought into sharp focus my own limiting thinking or behaviour, and this has not always been a nice experience. Yet when the consequences of my current path were brought into the present, magnified and felt, my commitment levels went up.
The social self and the professional self
The problem for many financial planners is that they want to be liked by the client. Yet this is also the cause of many of the problems that can occur with clients.
Our social self is the part of us that needs to be liked. It is grounded in insecurity, self-serving, and approval seeking. It wants to avoid tension and be a people pleaser because it always has an ulterior motive.
But does this serve the client? No, because it creates a subservient relationship.
Our professional self is when we are authentic, totally focused upon the client, and willing to tell the truth. Even when it raises the tension levels (I recommend, ‘Turning Pro’ by Steven Pressfield.).
So, who do you want to be in your financial planning conversations?
Do you want to be that nice person, always helpful and looking to please your client? But who also lets them be a victim of their errant thinking and behaviour because you are afraid of rocking the boat?
Or do you want to the one to take a stand on behalf of your client? Be the person, perhaps the only person, in their life who holds them to a higher standard, so they have the greatest chance of living the life they want and accomplishing their goals.
P.S. Here is a link to a post called ‘Deep rapport and why it matters’. Click here to read.