Finding Your Clients Why

Written by: Jessica Bokhart, CFP® I’m sure it’s true in every field that the longer you do something, the more you learn. In the world of financial planning, that is certainly true. For me, the real change came when I began studying toward my certification as a Certified Financial Transitionist^®—a program designed to help financial advisors empower clients to handle the challenges that arise when ‘life happens.’ What does that mean exactly? In short, it’s about helping people manage their own behavior and keep them on track toward the best possible outcomes—no matter what the market or life throws their way. The most important thing I’ve learned from the program is just how valuable personal conversations and deep listening are when it comes to helping me understand what our clients really need, versus what they often think and say they need when they walk in the door. My recent meeting with Jane is a perfect example… When Jane and I sat down together a few weeks ago, she told me she was concerned about the future of her portfolio. The reasons for her angst came out like a flood. “I’m hearing over and over that the stock market is overvalued and that a recession is just around the corner,” she told me. “I’m afraid I’m going to lose a big chunk of my savings and jeopardize my future. Who knows what’s going to happen next? What’s our strategy for protecting my portfolio from a market crash—or worse?” At first, I was confused. Jane has been a client at Market Street for well over a decade, and until this, she’s always had conviction in our disciplined, diversified strategy. Plus, Jane is in her early 70s, continues to love working, and has a very well-funded and carefully invested portfolio. Even a dramatic drop in the market would have little if any impact on her lifestyle. The sudden change alerted me to one thing: it was time to have a deeper conversation. Instead of defending the merits of our investment strategy, analyzing the stock market, or discussing the never-ending political cycle, I asked her about her. And then I simply listened. When the conversation turned to her children and grandchildren, things quickly got more interesting. What I hadn’t known was that Jane worried about them constantly—both emotionally and financially. “I just want them to be taken care of,” she told me. “What if the market crashes and I end up having to spend all my money before I can pass it on? I want to help provide for them… to make their lives just a little bit easier. I’m so scared something will happen that will make that impossible.” Suddenly she was close to tears, and so was I.

And there it was: the root of the problem.

Now that I understood why Jane was concerned about the market, I knew exactly how I could help. I assured her that her portfolio and her financial plan continue to remain very strong. We talked about her cash needs going forward in comparison to the resources she has available. Then I suggested funding Roth IRAs for each of her children and her grandchildren that have earned income. She is already contributing to 529 plans for the grandchildren to help with college, and the Roths would give them something for retirement, a tax-free nest egg to call their own. I could see the relief spread across her face. And now that she knew we had a strong strategy in place to ensure that the people that meant most to her would be taken care of, all of her other concerns were much less important. She still has angst about the economy and the potential market volatility, but they’re no longer shining a spotlight on her finances. Perhaps the most important lesson I’ve learned in my training and from my relationships with clients of every age is this: financial planning is rarely about just dollars and cents. It’s no wonder behavioral finance has become one of the hottest topics in the world of investing. Investor psychology matters! And how you think and feel about money is just as important when it comes to managing the rest of your finances. That’s why our conversations with clients are often less about numbers and more about the things that really drive financial success. Years ago, we typically began conversations with each new client with questions about their account balances, risk tolerance, and generic financial goals. Today, we are beginning to explore a completely different path. Tell me about your career. What made you choose your profession? What do you enjoy doing most when you’re not working? What was your family like growing up? How did your parents talk about money? How do you feel about money now? What are your most important financial concerns? What keeps you up at night? These questions and more help us understand the why behind your money decisions so we can help you make the best choices for you. At Market Street, one of our conference rooms is complete with what we jokingly call our ‘therapy couch’. But it’s really no joke. What you feel and think about money drives almost every decision you make about money, the good and the bad! By taking the time to have personal conversations, our goal is to help uncover your ‘why’ and identify what you really want and need—and then put a plan in place to help you reach your ultimate goals, no matter what life throws your way. Related: 4 Important Tips for Parents to Smooth the Financial Path Ahead