Some of my best clients are those who have retired and are using their pension lump sums to fund their retirement income. The markets since 2007 have eroded over half of their pension asset and now their monthly incomes are in real jeopardy of running out. Six years after retiring they may have to go back to work. How can I re-set the stage with them when their goal was to have enough money not to worry and now clearly they do not?? And how do I ask them what their goals are considering that their most fundamental goals are no longer working out.
My first question is why would a retiree have that much exposure to the market? It's a bit confusing given that the market is not half of what it was in August of 2008, but just a couple thousand points below its historical high. Nonetheless, the future is not guaranteed. "Past performance is no guarantee of future results" is not just a disclosure statement for investments, it's a great perspective about life. For these clients, you have to sit down with them, with tremendous compassion and empathy, and discuss the truth and explore their options. If going back to work is one of those options then develop their go-back-to-work plan. What are their options for work? Connections? Network? Skills to be polished? Etc. For your future retirees, perhaps one of your deliverables should be a Plan B in the event the future is not cooperative.
I was rehearsing my script, “Financial Road Map New or Referred Clients” with my wife as a pretend client. As we discussed the Goals Conversation™, and I asked her, “Let’s say you’re there, what are two or three words that describe what you’re thinking and feeling now that you’re there?” She responded that is sounded like I’m “selling her a timeshare.” As if I were a salesman. Do I just need more practice?
I don't really have any comments about this, Dave. It's just an anomaly. Keep in mind that it's not a "closing" question. The purpose of the question is to document, for them, the emotional payoff of achieving their goal on their Financial Road Map®.
I was conducting a Phone Consultation with a prospect (Approximately 40 years old). During the Goals Conversation, she told me her goal was, “financial independence”. I then asked by when, she told me March 7, 2018. I then asked how much net spendable money yearly or monthly would she like to have? She said, ‘I would like to make $100,000 by 2018’. In her mind, “financial independence” was an income goal related to her employment, not a future amount of spendable income. What would you say to get her back on track as to the types of goals that go on the Financial Road Map® that are NOT employment related, which I really have no control over and cannot help her with?
"Oh, I think I might have asked the question wrong. When I asked, 'Tell me about a goal that requires money and planning to achieve,' I meant something you'd like to achieve in the future that will require you to save money for. Does that make more sense now?" Ask the question again. If it were to need further clarification, "Your income is where you'll get the money to save for and achieve your future goals. Tell me about one of your goals that requires money and planning to achieve."
As I’m reviewing the Financial Road Map® Interview should I be taking notes on the details of the goals as they are talking about them? For example, the client is talking to each other about how much money they will need for a down payment and which neighborhood they may want to live in and how much they can expect to net from the sale of their current house and how they would get the additional funds needed from traditional loan, from family. Should I add that detail to my CRM? Use it to build the financial plan? Is there a difference if I’m listening only to improve my skills or listening because they hired me and am listening to make sure I “get it right for them”? Thoughts?
Some of what you hear belongs on the Financial Road Map®, some will help you do a better job for the client during the planning process, and other information you can just hear without needing to capture it anywhere. If you need it to either do your job or it will help in holding them accountable to implement write it down.
On the Financial Road Map® Interview Self-Evaluation Form, what does ‘we are/are not clear about the priority of each goal’ refer to? When are we supposed to discuss ranking the goals in order of priority?
This is only an issue if they do not, or may not, have enough money to achieve all of their goals.
The Advisor Roadmap has only three goals. How / when do you get deeper if there are more? Such as, Money Guide Pro has many goals that can be discussed. When in the process do you gather more goals?
When a client has more than 3 goals, you can just draw an additional box on the Financial Road Map™ or use the extra goals shield stickers that you can purchase from us. During the planning process additional action items may come up that may or may not be goals. eg: It may become apparent that they need more insurance of some kind. Having more insurance isn’t really a goal, it’s an action item to be addressed that protects the plan and increases the probability the goals will be achieved. The key is that everything necessary to actualize their FRM gets addressed.
What if their goals are out of line with their resources and/or expectations? This is not always obvious to us in Financial RoadMap interview. What is your recommendation for addressing after you've already done the plan?
When you have your clients or prospects bring in all their financial documents, it should be quite obvious whether or not they have the means to achieve their goals. You may need to ask some additional questions to determine if there is money that is not represented in their docs. eg: Are you expecting an inheritance or other financial windfall?
In the cases when it is obvious that resources/goals are not realistic in the Financial RoadMap interview, would you tell them they will probably have to adjust their goals, or do you politely disengage?
It depends on how badly you need the business. The better case is that you politely disengage because it’s really not fun, and quite difficult, to coach people to lower their goals or reduce their spending. However, sometimes you have to work with people who are not ideal to generate enough business to get over the hump where you can be more selective.
What if the two do not agree on a goal? Or, When one participant does not respond affirmatively to (or at all) to the goal of the other, how should the advisor ask if they approve / agree?
Part of what you are looking for in Ideal Clients is that they are respectful with each other during the Financial Road Map™ interview. Let them work it out and / or ask expanding and clarifying questions to help. One sign that a couple is an Ideal Client is their ability to work through disagreements in a constructive manner and come to a conclusion.
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