The money-centered approach looks money-maniacally at accounts and amounts, failing to realize that this focus fosters little more than discontentment and skepticism. The engagement begins with a promise that can’t be kept (beat the index) and then confirms the broken promise every three months with a statement. They who measure progress by the Standard & Poor’s index have a very poor standard.
This shortsighted “relative investment performance” approach (RIP) is a suicidal value proposition, destined for eventual undoing and failure. Why would any financial advisors choose such a proposition? I suspect it’s because they have no other value to bring to the table. The risk inherent in the money-centered relationship borders on the ridiculous. It requires you to do a few things:
1. Access knowledge of accounts and amounts.
2. Project better results in the future than in the past.
3. Hope like the dickens that forces beyond your control ratify your projections.
4. Explain your way around the inevitable failures and disappointments.
Aside from being unsustainable, this approach really doesn’t sound like much fun—and I’ve had hundreds of advisors tell me just that. They feel trapped. The process feels redundant, like watching oneself in the movie Groundhog Day and experiencing the same scenario over and over, not knowing how to stop it.
Alternatively, life-centered advisors look clients in the eye and explain their professional priorities:
1. Knowing their clients’ story: where they’ve been, where they are and where they’re going;
2. Understanding their clients’ perspectives on important money issues;