Barbara Culver is one of the many advisors who has come to believe that financial planning is more about helping affluent clients make life decisions and less about managing their investments. In fact, she's so passionate about her "Purposeful Planning" approach that she teaches it to other advisors.
"New times call for new business models," says Culver, president of Resonate Inc. of Cincinnati, Ohio. "All the current research indicates clients seek and expect more services than ever from their advisors."
What Culver gives her clients is a process in which broader and deeper conversations take place among two or more generations of family members. If we don't do this type of planning going forward, says Culver, we will lose clients. "As advisors, we make a lot of the same mistakes attorneys have been shown to make that cause client attrition. For example, we talk too much, we just assume clients will remain loyal and we fail to communicate clearly with clients."
The solution, she says, is to demonstrate to clients that you possess the "6 C's:" character, chemistry, caring, competence, cost-effectiveness and consultative. Further, she says, "We know that the ultra-high-net-worth clients want services delivered in a convenient and collaborative model."
Why does any of this matter? If for no other reason, says Culver, than because her research has shown her that "loyal clients provide an average of 11.8 referrals to qualified prospects, satisfied clients provide 2.1 and moderately satisfied clients provide 0.1 referrals." It only makes sense then to create loyalty in all of one's clients, and the 6 C's are a step in that direction, she says.
Culver defines Purposeful Planning as "an intergenerational planning system anchored with the three secrets of flourishing families":
1. They hold regular and purposeful conversations about what really matters in life;
2. They include intergenerational, sustained philanthropy in their planning; and
3. They have a process for preparing heirs to become the next successful generation of leaders of the family.
To implement Purposeful Planning, the advisor works regularly with a group of professionals, a "Team of Affinity." Culver's own team includes John Warnick, an estate planning attorney and partner in the Denver office of Holme Roberts & Owen LLP; Terry Hunt, a noted psychologist practicing in the Boston area; and Courtney Pullen, a consultant and head of Pullen Consulting Group LLC in Wheatridge, Colo. All of these professionals have experience in family wealth counseling, an essential skill for Purposeful Planning.
In addition to practicing Purposeful Planning with her own clients, she and Team of Affinity offer seminars at which they teach the process to other advisors. An important element is for advisors to offer clients services that include family retreats and family mission and vision statements. "The family retreats are co-facilitated with a psychologist and another advisor, such as the team's attorney or financial advisor," Culver says. "The design and implementation phase is led by the technical [e.g., tax] experts on the team. And the philanthropic mission and vision statements are created in conjunction with help from philanthropic professionals. All team members work together cooperatively and share information."
Why the emphasis on philanthropy when not all families are so inclined? Says Culver, "We find that wealthy people who aren't charitably motivated just haven't had an opportunity to really explore philanthropy. Initially, we talk to people to find out where their passion is, and we can always find a charity for that. In this way, it's easy to help people discover they have a philanthropic heart and just never had any help uncovering it before." Of course, the team seeks to identify philanthropic goals that all of the family's members can relate to and adopt.
Hunt, the team's psychologist, explains why it's critical to involve the family in planning for wealthy families: "There's usually something going on in every family that draws them to me. They're all wealthy, of course, but they may not agree on important principles underlying their connection to each other through family foundations or businesses."