You must get your clients to open up, in full, about the sums on their credit cards, bank accounts, pay stubs, mortgage statements and any other documents that reveal income and expenses. Wealthy clients have a tendency to keep certain assets hidden away, or managed elsewhere, in the process leaving their advisors in the dark about their complete financial picture. Overcoming that obstacle allows advisors to provide informed guidance about each client’s particular needs and wants.
Your objective should not be to tell clients what they’re spending too much money on, or the luxuries they ought to abandon, in order to retire comfortably. (Of course you might have to do that once in a while, if the client reveals major problems.) Instead, your goal should be to show clients those perks of life they can enjoy and still behave responsibly. Some clients may need to purchase four huge cups of gourmet coffee a day, while other clients might need to take a lavish two-week summer vacation with their family.
Richer Lives
Clients who gain a new understanding of what they can allow themselves, while remaining on target with their financial plans, are better positioned to achieve their full financial potential. With such a change comes clarity and optimism that can produce positive life decisions. Career moves and investments based on long-term holistic strategy crafted by the advisor, for instance.
Yet there is perhaps a more practical reason that advisors should take this approach with clients: It’s what the most prestigious institutions have long done for their most desirable clients. Family offices know that a wealthy client values perspective on how money can be used to appreciate life, as opposed to fixation on what the client cannot do with money.
Good advisors could do much more for clients, by freeing them of the money myth while simultaneously offering solutions that so-called elite institutions have reserved for their clients. In fact, once an advisor helps a client let go of the money myth, that client will be more inclined to trust the advisor with further services, such as managing external financial professionals and optimizing sources of illiquid wealth.
When all of this occurs, advisors can take pride in knowing they have helped clients lead better, richer and fuller lives.
Greg Powell is president and CEO of Fi Plan Partners, a wealth management and financial planning firm based in Birmingham, Ala.