Financial Planning
If anyone on the board who is a CFP has truly integrated Financial Planning into their practice, i.e. clients come to them because they want a financial plan, what is your process, how do you start your first meeting, what comes next, etc. If you were strictly and investment guy first, how did you go about transitioning with your existing clients who viewed you as their “investment guy”?
I was just going to make a new thread about this. awaits responses from the veterans
I was thinking about integrating that to my business, but I figured I’d leave it to the experts and co-brand the plan with my logo.
Sportsfreakbob, why is your question limited to CFP’s who have integrated financial planning?
I am not a CFP nor do I use a FP to lead my business approach. However, I do use it extensively. It it great for uncovering all assets, getting the client/prospects to talk about future goals and current financial issues, address debt reduction. The final product is viewed as an objective guide that shows in black and white what needs to be done…in most cases a change of investment appoach to align with goals. It positions me as a proffessional who is guided by what is important to the client. after all it was their answers to my questions that provided the data to populate the FP. Powerfull tool.
Sportsfreakbob, why is your question limited to CFP’s who have integrated financial planning?
Anonymous, you are right, i shouldnt have limited it to CFP's, wasnt really intentional.
Logarithm, what the hell are you talking about?
Handle the investments myself and bring in an estate attorney, CPA, and life insurance guy to handle the rest of the FP. Once the FP is done, only one service provider’s name will be on it: mine.
Are you allowed to include CPA analysis (i.e. Tax advice) in your financial plans?Handle the investments myself and bring in an estate attorney, CPA, and life insurance guy to handle the rest of the FP. Once the FP is done, only one service provider’s name will be on it: mine.
Probably with a lot of disclosure and the name or firm that made all the recommendations…I’ll have to check with my compliance guy
I am not a CFP yet (will start process after the new year) but I work with two. They asked me to develope an agenda/timeline to coordinate our planning process and it seems to work well so far. If you are interested then PM me and I will share it to see if it can help you. It should at least give you an idea of where to start.
Being brand new to the board today, and being that college fb is now finished for the evening, I'll jump in with my two cents here.
To respond to the question regarding how to enter the finacial plan building arena....From interacting with many different advisors in my geographic area, I feel that many investment professionals I know that are trying to compete for the coveted "trusted advisor" title lack a process and a belief system. For example, many of these brokers manage money and give advice based upon short term market fluctations and short term thinking. Sometimes I think that they are as indecesive and flip flop as much as their clients would if they managed their own money. I also feel like some of these professionals are giving advice without even knowing what the client is trying to accomplish or understanding the complete picture. An investor risk profile does not qualifying as understanding your client. My humble opinion is that if you want to build someone's financial plan you need to know, really know, more about that client than anyone else, other than their spouse. Not understanding the complete picture is like a doctor making recommendations without doiing a thorough physical....it's malpractice. So my thoughts are that you have to have processes, firm beliefs, and organized and repeatable systems to enter into the world of financial plan building. My process is simply, I use several meetings to understand the client throughly. I ask a lot of tough questions during these meetings, and want to understand their thoughts and feelings about the future. They can fax me the facts, they can't fax me their feelings. After that, I then utilize Emoney 360 planning software to integrate their whole financial life onto "one pain of glass". This software is a key compenent of my process because it serves as the physical as well as interactive financial plan itself. I believe in the"financial planning pyramid" in that I make sure all my clients risk management needs are met prior to addressing investments. How can I talk about investing for a goal that's 20 years out when this poor guy doesn't even have 5 months of living expenses in cash or disability insurance in place. Then, through proper asset allocation we take only as much risk as we need to in order to reach or exceed their objectives. I meet so many clients whose investment accounts are way riskier than they need to be to get them to where they want to go. I design efficient portfolio's that maximize return while minimizing risk. Finally, once that client enters their retirement years I want to use monte carlo analysis and cash flow analysis to ensure that we're designing workable retirement distribution solutions so that their money lasts as long as they do. I hope this adds a little value at least to this post.CFP83
Good post, thanks. When you sit down with a prospect for the first time, are you sitting there with a legal pad, or do you use questionnaire's or any other tools. Other than the basic questions, like where do you want to be in 10 years, what kind of retirement are you looking for and have you thought about how much you will need to achieve it, etc, are there any other questions that stand out in your mind that you ask, which mighyt be less obvious, but just as important?Sportsfreak, your question isn’t addressed to me, but that’s never stopped me.
As an advisor, I think that a questionairre is pretty necessay. It's just that with experience comes a memorization of what needs to be asked, so the questionairre can become a blank piece of paper.[quote=anonymous]Sportsfreak, your question isn’t addressed to me, but that’s never stopped me.
As an advisor, I think that a questionairre is pretty necessay. It's just that with experience comes a memorization of what needs to be asked, so the questionairre can become a blank piece of paper. [/quote]I think you need to be careful about not having a paper factfinder. I saw a presentation on factfinding by a guy at our company on the East Coast, he's an MDRT Court of the Table Producer and he said he always uses some sort of written fact-finder, not because he needs to, but because he found that when he didn't prospects were concerned he didn't have a process.
I would encourage everyone to use a written fact finder, especially if you're a younger <40 advisor.
[quote=BerkshireBull] [quote=anonymous]Sportsfreak, your question isn’t addressed to me, but that’s never stopped me.
As an advisor, I think that a questionairre is pretty necessay. It's just that with experience comes a memorization of what needs to be asked, so the questionairre can become a blank piece of paper. [/quote]I think you need to be careful about not having a paper factfinder. I saw a presentation on factfinding by a guy at our company on the East Coast, he's an MDRT Court of the Table Producer and he said he always uses some sort of written fact-finder, not because he needs to, but because he found that when he didn't prospects were concerned he didn't have a process.
I would encourage everyone to use a written fact finder, especially if you're a younger <40 advisor.
[/quote] Very good points. IBut have always had a hard time using a fact finder, or questionairre, that didnt put me in a position of feeling like i am interrogating a prospect. Does anyone have a fact finder that they are comfortable with that they would be willing to post, or PM?
The client fills out the questionnaire before they get to me. I’ll dig a little deeper once I meet with them.
I have a cliffsnotes version I made from the Checklist our clients fill out before the data gathering meeting. I print it off front and back of two pages. I tried to post it but it takes up too much room and will not format correctly. I will try to PM it to you.</O:P>
[quote=BerkshireBull] [quote=anonymous]Sportsfreak, your question isn’t addressed to me, but that’s never stopped me.
As an advisor, I think that a questionairre is pretty necessay. It's just that with experience comes a memorization of what needs to be asked, so the questionairre can become a blank piece of paper. [/quote]I think you need to be careful about not having a paper factfinder. I saw a presentation on factfinding by a guy at our company on the East Coast, he's an MDRT Court of the Table Producer and he said he always uses some sort of written fact-finder, not because he needs to, but because he found that when he didn't prospects were concerned he didn't have a process.
I would encourage everyone to use a written fact finder, especially if you're a younger <40 advisor.
[/quote] The clients will be concerned about a lack of process if you don't tell them your process. It has nothing to do whether the fatct finder has questions pre-printed on it.
The problem with most fact finder questionairre’s is that they focus on facts. At the very least, one needs to focus on goals first and then circle back to get the facts.
Exactly anon. To me, the fact finder give you a place to start. Kind of a snapshot of where they are. It doesn’t tell you where they want to go.
More often than not, they don’t. You must dig deeper to find not only the “what”, but the “why”. They don’t understand the why. Once you get them to articulate it, it works so much better.
It’s a pain in the neck, but it works. Can’t wait till I don’t have to deal with clients anymore.
I ran across this a while back. It might help as a basic starter questionnaire.
http://vsa.fsonline.com/vsap/PersonalReport.pdf
all good stuff. Thanks, very helpful
I think whtat this all points to is like prospecting - no one size fits all. ALMOST doesnt matter what your process is, as long as you have one, so find one you're commfortable with.A lot of good points about fact-finders on here. I firmly believe with anonymous regarding his comments about a fact-finder has to be about more than just facts. I spend most of my time trying to figure out a clients desires and thougths about the future.
I think the fact-finder with the prospect is the first act of a play in which the client finds out exactly which character you are going to play. Will you be the "ask a few questions and then get to the sale you want to make as quickly as possible guy" will you be the "stock jockey who always has the next best thing guy?" will you be the "annuities and life insurance can solve it all guy?" I want prospects to realize immediately that i am an advisor who brings new and fresh ideas to the table and is also very directive in my speech and approach, as I am confident in what I'm telling them is the absolute best thing. Prospects also notice right away that I ask a lot of questions, but their questions that they have never been asked before. I challenge them to think outside the boxes society has ficticiously built in their minds. I am extremely passionate about helping show each of my client"s how to tap into their maximum financial potential, and the fact-finder is the starting point of all this. Yeah, I'm curious to hear a clients' thoughts regarding retirement income, but honestly I do not put that much weight into their answers. To some this will sound odd, but think about it for a second. When you ask a client "How much after-tax income do you want to have coming in every month at retirment?"....they are going to pull some meaningless number out of their ass! Try this, say the prospect says "Well, uh I don't know $7000 a month sounds good" respond by saying "what if I showed you a plan that could provide you with $10,000 a month, would you then want that plan?" Guess what? 100% of the time the client says yes! So it took them all of 10 seconds to change their mind about what they wanted. The point here is that your an order taker, not an advisor if you take a number the client pulls out of their ass and then spend the next 10 years revolving all of your planning efforts around it. What the hell would you say if your attorney or doctor started asking your opinions on what they should do? I truly feel it's my job to teach clients to think bigger than they are use to regarding their planning goals.It’s usually not a meaningless out of their ass number. It’s a starting point. The client usually won’t know how much they want. Backtrack and find out how much they are bringing home now. If they are comfortable with that, it’s a great starting point.
Very seldom is it possible for someone to be currently living on $7,000/month and be in a position that they can retire on $10,000/month. Even if it is true, once the person can retire on $7,000, they are able to retire, but they could work longer and retire on $10,000.Source URL:https://www.wealthmanagement.com/forums/clients/financial-planning-0