Financial Life Planning for Seniors

It isn’t about having all the answers; it’s about asking the right questions.

By Richard Dulisse

Financial life planning is a dynamic educational process that allows people to visualize their personal goals and then model the financial consequences of those choices. It adds a holistic element to the process of financial planning by considering nonfinancial decisions that an individual makes throughout his life. Financial-planning activities are directed toward achieving specific personal goals rather than the more nebulous target of “building wealth and maintaining financial security for the future.”

Although financial advisors understand the increasing need to take a more holistic approach with their senior clients, most are not comfortable advising on nonfiscal matters. They are concerned they will be called upon to be all things to all clients and to step outside their areas of expertise. However, in the financial life-planning approach, the advisor conversationally explores life issues as they relate to money, and facilitates a dialogue to communicate his interest in the client as a whole person. This can be accomplished without taking the advisor too far out into the psychological tide.

Life at the center
The financial life-planning approach is client-centered. Intuitively, your senior clients will see the wisdom in developing a plan to use their money to make a life, after having spent most of their life making money. Most individuals are quite receptive to the professional who possesses the skill to draw out their vision for their lives and help facilitate the materialization of that vision. Your senior clients’ money has powerful meaning to them. To make the life connection, the advisor needs to draw out the intended purpose of the money, the values that created the assets and the legacy the senior client intends to leave.

Financial life planning isn’t about having all the right answers; it’s about asking the right questions. It involves broadening the conversation from asset management to money as it relates to each aspect of a client’s life. Financial life planning involves:

• exploring what money represents to your senior clients.
• defining the tangibles and intangibles that senior clients expect their assets to provide them.
• anticipating life events and transitions and making financial preparations for those transitions
• assisting senior clients in establishing financial goals that facilitate their life goals.
• developing a network of professionals to whom you can confidently refer your senior clients.

It involves broadening the conversation from asset management to money as it relates to each aspect of a client’s life.

Three key roles
As a financial life planner, you will be acting as partner, guide and educator.

As a partner, you will walk alongside your clients as they pursue their life goals and help them to realize their objectives. To earn the status of partner, you will need to invest in your relationship by really getting to know your clients as individuals.

As a guide, you will use your financial expertise and in-depth knowledge of your clients to develop an individualized financial life plan for each of them. This plan will base financial goals on their unique circumstances, values and priorities. You will also advise your clients about viable options and motivate them to make decisions and take action.

As an educator, you need to be proactive in equipping your clients with the tools they need to make knowledgeable financial decisions. Today’s senior clients do not want to be left in the dark. They are wary of advisors who cannot or will not explain financial concepts or products to them. In addition, they are annoyed by the use of financial industry jargon. They want a financial advisor who speaks to them in plain English. They will then view you as someone who has spurred their growth.

As a financial life planner, success hinges on moving beyond transaction thinking to transition thinking. This means looking for effective ways to help clients make the connection between their financial life and their goals and priorities in all other areas of life. The most effective method for doing this is to ascertain whether you are asking your clients the proper life-focused questions that will enable you to know them better. Some points to consider in evaluating your questioning of clients are as follows:

• Could you become more efficient by using better questions in the discovery process?
• Do your questions help you learn about your clients’ life goals and priorities as well as the distribution of their assets?
• Do you know who your clients are as well as what they have?
• Do you ask questions that give you a clear understanding of your clients’ values?
• Do you demonstrate a keen sense of curiosity and interest in your clients’ lives or just in their financial situations?

It is amazing how you can stand out from the crowd simply by asking the right questions. Your clients want to know they have been heard, so you need to actively listen to them as they tell you about their quality-of-life desires and concerns, as well as their quantity-of-money achievements, before you make any recommendations.

Richard Dulisse is an LUTC author and editor. Contact him at Richard.Dulisse@TheAmericanCollege.edu.