Life Planning

[Nancy5]

How important is adding life planning or coaching to a new independent financial planning practice? Are clients expecting this sort of help from a financial planner?

[Bradly T.]

Nancy - here you are again asking simple questions with no simple answer. If you are a reg. rep., investment advisor, or financial advisor (whatever THAT means), the answer is no. If you are or want to be a professional financial planner, then you are and must be a "life planner". Our role is to build, protect, distribute, and transfer family wealth (not portfolios!). We must help elect employment benefits; reduce taxes; build protection/insurance portfolios; use correct beneficiaries, wills, trusts, etc.; face unemployment and job/career transitions; control, use, and diminish debt; plan for education; respond to divorce and death; help survivor transitions and needs; plan for retirement and eventual eldercare, etc., etc.


We must get clients to talk about things they don't understand, have fears and prejudices about, and, with spouses, don't agree on. Oh it does get interesting. We have to lead them to decisions and then get them to act on those decisions. We have to monitor reality results and keep forcasting the future outcome probabilities. I really don't know why anyone would want to do it!! It's HARD. But I can tell you why I love it.....my clients need me and depend on me and appreciate me and are better off because of me!!!!!! It isn't easy and it doesn't pay well either. I make over 95% of my income from insurance, annuities, mutual funds, and managed money but at least 75% of my time is spent planning and consulting on non investment issues. But I've never lost a client over portfolio performance either. So planning is not only rewarding in an emotional and professional way, but it also keeps assets under management and redifines your relationship with clients.



Now I have heard about and read about planners who make a good living on planning only fees and do not depend on asset based income. But they must work for wealthy people and I do not. My clients are working class facing many financial challenges and cannot pay what I would have to charge for the time I spend on planning. So I manage money to make a living with an average account size of $200,000 with a few $1mm and a few $50k accounts. Helping the wealthy avoid taxes and stay wealthy is also rewarding I'm sure...it's just not where I'm from or at.



I've read about life coaching but can't really comment. While I do research for clients on many different issues and identify funding options for everything from cars to college to vacations, I wouldn't call myself a life coach. Others would know more about this.......help the lady out everybody!

[Vig Oren]

Are clients expecting this sort of help from a financial planner?

If you mean FINAL EXIT then, NO, they don't. As to CFPs, it might be a breach of the Code of Ethics, so if you're a CFP(r) then just present your client the Code of Ethics and get out from such discussions. On the other hand, LTC planning is a CFP's legal obligation to discuss.