Listen to Client Priorities

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This week we interviewed Daniel Miller, president of Miller Financial Group, a financial planning firm based in Red Oak, Iowa. Miller recalls how he learned that even the best financial plan wouldn’t work if it didn’t take clients’ priorities into account.

Recently a young couple came in for a meeting to discuss their future financial planning. A junior colleague sat in on the meeting with me as we discussed their retirement savings and other financial priorities. My colleague was taking the lead on this particular client couple and he already had all their relevant information from their forms and from a previous meeting. As he began to explain the plan he’d come up with for them I could immediately tell that he was heading in the wrong direction.

As advisors, both my colleague and I understood that these clients’ first priority should be saving up for retirement. To us that fact was so obvious it didn’t even really need to be explained. My colleague began his explanation with this idea in mind. He was very effectively and thoroughly explaining the portfolio he’d come up with for them and how it would put them on a path toward solid retirement savings.

But what he was saying wasn’t resonating. They had two young children aged five and seven and it was clear retirement wasn’t first and foremost in their minds — their kids were. They were much more concerned about saving for their kids’ future college tuitions than funding their own retirement accounts.

After that meeting I took my colleague aside.

“You and I both have a sense of what these people need,” I told him. “But even the best designed financial plan isn’t going to work if it isn’t also what they want.”

The next time they were due to come in my colleague and I again met with them together. But this time we had a plan. We affirmed that their children were their top priorities and we framed any recommendations in those terms.

We told them we wanted to maximize the pot of money they’d be drawing from in retirement so they could leave more money to their kids. We explained that one way of doing this was to ensure they were contributing enough to their retirement accounts now, so their investments would have plenty of time to grow. By the end of the meeting, they were much more on board with the plan.

If we hadn’t reframed our discussion in terms of their children I’m afraid we might’ve lost these clients. While the priorities my colleague had identified may have been correct for the clients in a big picture sense, the way he was presenting them just wasn’t sitting right with them.

Fundamentally it all comes down to the clients’ needs and wants. They are the ones making the purchases and decisions on a daily basis. Often those decisions are being made on the basis of emotion first and reason second. As advisors we always have to take that into consideration. We can’t assume they approach financial decision-making in the same way we would, because often they don’t.

In this situation we were able to get the clients on board with a plan that has them saving for retirement and putting money away for their kids. We accomplished this by taking the time to listen to their priorities and by respecting them. It was a win-win for everyone — once we slowed down and made sure to put the clients’ needs first.

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