Many MFDs/RIAs focus on financial aspects of clients but they do not pay attention to non-financial aspect of their lives, said Vishal Dhawan of Plan Ahead Advisors at Cafemutual Ideas Fest 2022 (CIF 22).
Vishal believes that finance is just one of the many aspects of the wheel of life. The wheel also comprises family, health, leisure, learning, inner growth, home, community and work, he added.
“This is where life planning approach comes to play,” said Vishal.
Life planning is a discovery process that unearths the real questions to seek the real answer, clients’ values/motivation and the framework to make financial/non-financial decisions. It gives a meaningful direction to your conversations and accounts for a 360-degree view. It demonstrates that you truly care for your clients and differentiates your service from that of others, said Vishal.
Life planning comprises four key elements:
- Conversing on non-financial topics - It is all about making clients comfortable and having deeper conversations
- Defining values and priorities - Very often clients tend to make a laundry list of their priorities. Help them to create a structure and rank them in the order of importance
- Setting meaningful goals and objectives - Clients should connect with what you say. For instance, very few clients would connect with ‘retire at 60’ as this is normally the retiring age anyways. On the other hand, for a client looking to be an entrepreneur, it makes more sense if you tell him ‘Let’s first address your other financial priorities and then focus on your entrepreneurial journey’
- Making the right choices - You cannot make choices for your clients. Help your clients make the right choices for themselves
To this Vishal added, “Adding the whys to the whats and the whens makes all the difference.” For example, asking ‘Why do you want to achieve a particular financial goal?’ encourages clients to think further and connect them with their goals better.
Vishal further said that MFDs/RIAs should create financial capital that provides security. “You should help your clients achieve their true potential. This is human capital. Additionally, encourage them to have a fun and pleasurable activities.”
