July 5, 2017 • Ross Levin
When a client at our firm was divorcing, she talked about how the life she had pictured for herself was forever changed. When the assets were to be split between her and her spouse, she would be financially comfortable but not secure. For some people, security means being free from threats, and when clients’ lives are upended, threats that weren’t previously visible suddenly are. We often talk of financial security, but that is a mind state, not an objective reality. What happens when we throw out the playbook and are forced to improvise? Improvisation can be wonderful when you are moving rhythmically to jazz—or it can be awful. Improvisation is limited by your ability to let go, something with which many of us have difficulty. In the greatest financial planning book of all time, Henry David Thoreau’s Walden, he writes that “spending of the best part of one’s life earning money in order to enjoy questionable liberty during the least valuable part of it, reminds me of the Englishman who went to India to make a fortune first, in order that he might return to England and live the life of a poet.” For clients without a dimmer switch, this “on” of working and making a fortune and “off” of doing what we love makes security elusive. When things don’t go as planned and clients must deal with a new picture of the world, it can make them uneasy. Do financial advisors unintentionally add to their discomfort? In the Japanese concept of lean manufacturing, the most important step is to clarify the problem. This is where many of us get stuck. In an uncertain world, how do we help make clients’ lives as rich as they wish it to be, help them feel secure with change and connect them with their money so that their decisions are personal rather than positional? If this is the question, then what does our wealth management playbook look like? It might now involve meaningful conversations about things we often avoid. A business owner client of our firm once came in and complained about how bad his COO was—good at supporting others, but unable to drive the organization in the way the owner expected. The owner is dealing with this frustration by avoiding a conversation with the COO and occasionally berating him for things he’s unqualified to do, hoping he’ll quit. The owner’s frustration has made him impatient with his wife. When he is mean enough, he buys her something out of guilt. With the business owner, we had to discard the playbook and focus on how his treatment of this employee was impacting his life and whether it was interfering with him being the person he wanted to be. This was a wealth management issue because he was financially linked to the success of the business, because his marriage was challenged by his behavior, and because for him to feel good about his money he had to feel better about himself. But the problem with the improvisational type of planning really required here is that it is uncomfortable. It is easier to state simple cause and effect: “If you do this, then this will happen.” But that’s only partially true, and it may lead you to ignore the core issue. The other problem is that this deeper relationship may not be the one the client wants or, in fact, that you want. There is nothing wrong with creating a practice mostly technical (though technical skills are being commoditized even as I write this). Also, an emotionally oriented type of client relationship means you must step away from being the expert and instead trust that the client has his or her own answers and that it’s your job to help bring them out. A husband of one of our clients is dying. He has a few months to live and won’t see age 50. The client is trying to decide whether she should sell her house and move while he is still alive or stay and renovate. Those are great questions to discuss at any time—except when someone is dying. How can we really know what we want when our world is about to blow up? Will she want to stay in the house where her memories are of her husband needing nursing care? Does she want to disrupt her children’s lives by moving? First « 1 2 » Next
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