Early in my career, I read a book by Bill Bachrach [1] about value- based financial planning. Bill’s theory was that the most important role of a financial advisor or financial planner was to first and foremost understand what is important about money to your clients. It is only after we understand what is important to the client, what they really value, that we can help build a framework for making smart decisions about money.
Those values were best uncovered by one simple discussion. I have used this discussion since the early days of my career and it happens in the first two minutes of the first meeting with a client-to-be. The very first thing we do is ask, “What’s important about money to you?” On more than one occasion, this question has caught clients off guard, but it is the most important thing that we do. Only by understanding what clients truly value can we then provide the framework for making smart decisions about money.
What might be important to one client may be completely unimportant to another. While it’s not our job to decide a clients’ values, it’s our job to understand them and help provide framework for making smart decisions about money within the context of what they view as important. In the end, we sometimes get so caught up in financial charts, the economy, diversification, and standard deviation we fail to stop and say, “What is this all for?” We need to put financial and investment decisions in the context of what clients feel is important.
Source:
[1] Values-Based Financial Planning: The Art of Creating and Inspiring Financial Strategy, Bill Bachrach
