The greatest reason I can offer for beginning this conversation is that once this exchange of philosophies takes place, little can happen in the markets, on Wall Street or in the world at large, to separate your clients from you. Their reason
for being with you as an advisor is built on the rock of agreed-upon principles-not on the shifting sands of market performance.
I offer the following tool for you as a springboard to the conversation to help clients understand your philosophy and to help them articulate their own fiscalosophy.
By engaging in this "big picture" conversation, you are getting a barometer of your client's philosophies about spending, debt management, investments, how wealth is developed, risk management and advisor compensation. Think of this conversation as an MRI into your clients' thought processes. Also keep in mind that what people believe and what they do are often separated by great degrees, which is why we offer the phrase, "I have consistently followed this guideline in my life." After the inquiry about whether your clients live below their means, you'll want to know the following about these clients as well as your client prospects:
Are they notorious spenders?
Are they prone to chase high-flyers?
Are they afraid of the stock market?
How highly are they leveraged?
Do they lack discipline in trying times?
Are they under- or overinsured?
Are they suspicious of financial institutions and how advisors get paid?
I'm sure you can think of at least two good reasons to know such things about a potential or existing client: