PlanHappy

FINANCIAL PLANNERS - I bet you recognise this type of client:

- They cancel on you at short notice.
- If they do show up, they arrive late, flustered, with excuses about how busy work has been.
- They can’t turn off their phone or resist answering it during your sessions.
- They fail to do the tasks that you ask of them in between sessions.

I call them a ‘Jack-in-the-Box,’ and there are two distinct varieties, each with the same outcome for you.

1) The Avoider - Some people use ‘busyness’ to avoid deep conversations about themselves. They believe if they don't sit still and ponder life, they won't have to deal with what they might discover about themselves.

2) The Show-Off - Some wear their ‘busyness’ as a badge of honour, believing it makes them look important. This behaviour often stems from insecurity and appearing "in demand" boosts their self-esteem. They encourage constant contact from others to reinforce this image.

You’ll recognise these characters amongst your friends and family;

- They arrive at a restaurant an hour late, boasting about all the crises they had to manage.
- They double-book themselves, constantly juggling commitments to appear indispensable.
- When they’re with you, they’re telling you they should be elsewhere, even though you arranged the meet weeks ago.

They can be exhausting, but because they’re friends or family, you tolerate it.

For clients however, you have no such obligation.

Where the Jack-in-the-Box has a partner that’s engaged in your process, the temptation can be to just focus on them and leave the Jack-in-the-Box on the sidelines where they seem to be happiest.

After all, they don’t seem to have much interest in the process so what harm can it do?

At some point, the Jack-in-the-Box will fixate on a minor detail, grasp the wrong end of the stick, and start emailing you late at night, questioning it and referencing a YouTube video.

You'll be frustrated, as you already examined the stick with their partner and showed them the correct end and why the wrong end should be avoided. Yet, here you are, wanting to hit them with the stick.

Instead, address the behaviour head-on from the start. Here's what you should say the first time they cancel, show up late, or take a call during your session:

"I see you're busy and in demand. Designing a Lifestyle Financial Plan will greatly benefit you. To do this properly, I need your full attention, which means showing up on time, turning off your phone, and focusing during our sessions. Can you do that?”

If you have this conversation, they'll start showing up on time, with their phone off and their attention on.

Why? Because you've acknowledged how busy and important they are, which is all they wanted you to see.

Now that this is established, they can drop the act. They're probably glad for a break from it.

FINANCIAL PLANNERS - At what point does Financial Planning become relationship counselling?

Let’s face it, if you're working with a couple discussing their hopes, dreams for the future, and helping them define their ideal life and lifestyle, it's unlikely you'll get identical answers.

Sometimes they share a vision, but often there's a disconnect between their ideal plans.

So, what to do?

Our first job is to listen, and then diagnose which scenario you are facing.

At first glance, and in the cut and thrust of an emotional coaching session, they may seem similar. But there are three distinct levels of relationship disconnects - each with crucial differences.

1. Different Lives – Both clients are very different people, with very different lives and a very different outlook on what a great day looks like.

But that’s OK because their relationship is built on those differences.

‘Opposites attract’ as they say.

Each day they go out and do what they do, and on an evening, they have something to talk about. They bring something to each other and accept their differences as a strength.

Our job is to incorporate both sets of wants and needs into the plan so that the combined relationship is nourished.

Rather than two separate plans, we create one that represents both their wants, needs, and ideals.

2. Separate Lives - Two fish living different days in the same pond is one thing, but what happens when one fish wants to live in another pond?

People's thoughts and future plans can often be very diverse.

As relationships evolve, the strongest ones adapt to changes in their environment.

But what if there's a fundamental disconnect?

One person may envision a life in Australia while the other stays to care for an ailing relative. Another might aspire to a city career in later life while their partner dreams of retiring to a cottage in the hills.

Something has to give, and it may be the relationship.

That’s their choice to make. Your job is to explain that you can’t fix it with a cash flow model.

In this situation, we need to refer to a professional colleague who can help with mediation and, if it comes to it, the legal process.

We should stay involved and assist in the preparation of two different plans for each
person respectively.

Often, the process can be amicable, and you end up with two new clients, each with a Financial Plan that works.

Far better than mindlessly creating a plan for a couple that only works on paper and perpetuates their illusion that their oil and water can be combined.

3. Broken Lives – We’ve all had a session where it’s clear that the relationship either is, or should be, over.

There's a seething resentment that’s gone beyond simple relationship problems and settled into an acceptance that the love has gone, and they just need to grit their teeth and get through life alive.

That might work on a normal day when conversations can be kept shallow, and issues can be silently danced around.

But here you are, asking probing questions, tugging at the seams and sooner or later all the unsaid things are going to come out.

Sometimes it’s a tsunami, sometimes it’s the drip drop of Chinese water torture, but it’s clear that it’s too far gone and definitely not something that you’re going to resolve with a Switch Analysis and a Suitability Report.

Don’t try to fix it.

You can’t – they must go on their own journey and come to their own realisations
that the relationship is broken.

Refer them to counselling or mediation and encourage them to come back to you in the future if they wish.

Most of the time they’ll ignore you and go back to their broken lives, preferring the familiar, day-to-day shallow pain rather than the prospect of diving into the short term turmoil and deep pain of a separation.

That’s OK, it’s not your battle to fight and even if you did – there’s nothing to win until they’ve each travelled their own path.

Occasionally, you’ll get a phone call a year or two down the line from one of them wanting to work with you to develop a plan for their new life.

You have a new client with a clean slate and a bond of trust.

Three diverse circumstances categorised as 'relationship issues' demand distinct solutions and outcomes for you and your clients. Assuming you can pause your focus on cash flow models to listen, diagnose, and guide.

Not everything in life can be fixed.

Nor does it need to be.

And definitely not by you.

FINANCIAL PLANNERS - “I was badly advised” is a phrase I often hear from clients.

Thankfully, not in relation to my advice - but directed at some ne’er do well that they dealt with in the past.

My initial reaction is always sympathy, followed by frustration with the Financial Services industry and its propensity to not cover itself in glory.

But, as I dig a little deeper into the nuance and context, the story starts to unfold a little more and the other side of the tale introduces itself.

And this is important, because in any conflict, responsibility is normally shared to some degree and it’s the role of the neutral to identify on which side of the scales it weighs the heaviest.

Although it starts with the phrase, “I was badly advised,” careful diagnosis reveals the scale to which the clients themselves perhaps contributed to their own misfortune.

There are 5 categories on the spectrum, each with its own challenges:

- The Innocents – These clients are genuinely innocent and have been misled into something they shouldn’t have been, because they trusted the advice of someone who should have served them better. Take them under your wing and do what you can to, in the words of Sam Beckett, “put right what once went wrong”. Ziggy will be proud.

- The Naïve – They are very similar to The Innocents, but have been led into something that, well, maybe should have smelled a little off. While this doesn't make it their fault, it should alert you that they could be led astray again under your watch. This should be a prompt for you to do the Financial Services equivalent of moving the best China to a higher shelf, installing a stair gate and putting bumpers on the table corners.

- The Greedy – Almost every scam relies on greed to some extent, as greed blinds us to the risks. If your client has invested all their pension money into an off-plan Bolivian apartment complex sold to them by a man in an airport, they must take some responsibility for the entirely foreseeable outcome.

Your problem is that they're still greedy and likely to repeat their mistakes, so you'll need to be both their minder and adviser.

- The Grumbler – Often, your initial sympathy for the client can shift to sympathy for the previous Adviser once you hear more about the ‘bad advice’. Sometimes, the client sets unrealistic expectations, and when these aren't met, they decide someone must be to blame.

Do you really want this client? Were they truly badly advised? Or do they want something that can’t be delivered? Is there an Adviser somewhere celebrating finally getting rid of ‘Awkward Dave’?

- The Litigator – Some people just love to complain. It’s a hobby for them. If you gave them a bag of Gold they’d complain it was the wrong bag. I've had prospective clients who’ve claimed that they were badly advised by every adviser they've dealt with over the last 20 years, whilst proudly showing me their lever arch file of FOS complaints.

And you should take a good look at that file my friend, because if you take them on, you’ll shortly be in it.

FINANCIAL PLANNERS – There's a certain type of prospective client that’s impossible to spot until it’s too late.

I call them the ‘Show-Off’s’.

The reason they are so hard to spot is because, on paper, they appear to be right on the money.

The enquiry comes in and it looks great. Plenty of savings and pensions, probably a property or two and a desire to do some Financial Planning to assure themselves that they’ve got enough to retire in a few years.

So, you offer them a free consultation and it all starts well.

- You smile sweetly when they attend on time and appear coherent.
- Your heart beats a little faster when you see they’ve got a lever arch file with all their documents in date order.
- Your eyelashes flutter involuntarily when you see their spreadsheet with all of their costs listed.

But then a little doubt creeps in when they open their laptop and start what feels like a presentation.

They appear extremely knowledgeable, giving the impression they could easily do your job—and in fact, they are doing your job!

You thought they were coming in to listen to you explain how your Financial Planning process could help them review their assets against their life and lifestyle needs and determine if they have enough.

But it’s now slowly dawning on you that they’ve come in to give you a masterclass in Financial Planning and more importantly, show you how fantastic they are.

- They already know they have enough – they just haven’t told enough people about it yet.
- They’ve told everyone in the pub, bored everyone at work and their long-suffering spouse has lost the will to live.
- They then went looking for fresh meat and you just didn’t get out of the way quickly enough.

And now there you are, sitting and listening to the Show-Off Man (sorry, but it’s always a bloke), gleefully walking you through all his calculations, fund choices, tax dodges and soaking up your non-existent applause whilst you wonder what on earth has happened.

The truth is you just got done. If it wasn’t you, it would have been someone else.

So, what to do?

Grit your teeth, tell them how fantastic they are and move them to the door.

That’s all you can do.

Don’t think you’re the one that can change them or that if you dazzle them with your knowledge they’ll suddenly convert to your way of thinking.

They won’t.

They’ll take everything they can get from you (for free) and roll it up into their own thing.

I got caught with a few Show-Offs early in my career and my pride got in the way of reality. I took them as a personal challenge, keen to impress and show my worth with the aim of enticing them into my Financial Planning service.

But I just became their dancing monkey whom they were happy to tease just enough to keep me dancing.

But after a few years I learned.

They’re ‘Show-Off’s’, so let them ‘Show-off and _ _ _ _ _ _ _’

[Colloquial English saying that invites someone to relieve themselves of the room (4,3)]

Financial Planning is a very sensible business, conducted by very sensible people for very sensible clients.

Which can be a problem.

Because who wants their life to be so... well... sensible?

‘Everything in moderation, including moderation itself,’ as the saying goes.

Let’s consider a couple who’ve unexpectedly come into some money later in life, maybe an inheritance, a forgotten pension, or a redundancy payout.

Before this windfall, they’ve lived a sensible life in a sensible house, driving a sensible car, and going on sensible holidays.

But suddenly, they have a pot of money in their laps – what now?

- Your sensible Financial Planning mind wants to safeguard their future.
- Your sensible Paraplanner wants to develop a cashflow model to stretch that money until they’re old and doddery.
- Your very, very sensible Compliance Officer wants to ensure every bit of joy is sucked out of their plans so they can live a grey, dull life that fits the FCA’s idea of sensibility.

Well, that’s a bundle of laughs.

But hang on a minute.

I bet there have been times when you’ve been less than sensible yourself.

When you’ve thrown caution to the wind and had a great time – maybe even been a bit reckless.

And I bet, given your usually sensible nature, that when you decided to let loose, you gave yourself permission to do so. You knew your sensible self would eventually take over again, but you wanted to have some fun first.

So, who are we to decide what’s sensible in someone else’s life?

Your clients might know this is their one chance to have some fun. To do the things they’ve always dreamed of but never thought they’d actually do.

- The round-the-world trip.
- The new kitchen with an oversized Aga.
- The generous gift to help the kids get on the property ladder.
- The pimped-up motorhome.
- The timeshare in Spain.

Sure, when you pop these into the cashflow models, it might show their money running out before their time does.

So what?

That’s perfectly fine…

They’ve led a very ordinary life for a very long time. After this brief, glorious blitz of excitement, they’ll return to their very ordinary life.

It doesn’t make them reckless or imprudent. In fact, it shows they have more self-awareness than those who mistake a fear of living for sensibility.

If it’s planned and purposeful and lets them do what they’ve always wanted, they should go for it.

As a Financial Planner, we should support that – not strangle it with our ultra-sensible cashflow models.

Don’t be afraid to champion a bit of fun, a bit of recklessness, a bit of excitement in your clients’ lives.

If your Compliance Officer has a problem with it, just remind them of last year’s Christmas party when they did the David Brent dance after a few too many Sambucas.

You know, that time they decided to let off a bit of steam on a Friday night, safe in the knowledge they’d be back to their sensible selves by Monday morning.

Remember, we’re Financial Planners - not the Fun Police.

There’s a certain type of prospect I call the ‘Shouty Investor’.

They’re easy to spot due to the ‘shouty’ bit and other common traits:

1. They dictate the expected investment return rate.

2. They emphasise their own investment expertise, claiming they could manage it themselves but are ‘giving you a chance’.

3. They demand you commit to a number they can hold against you throughout your relationship with them.

As a Financial Planner, you explain you can’t guarantee investment returns. Instead, you help develop a robust financial plan aligned with their desired life outcomes while enjoying whatever long-term gains the market brings.

But that’s not what they want to hear, and the shouting starts, like my Grandad ordering ice cream in Paris.

My Grandad hadn’t travelled abroad until late in life and couldn't deal with non-English speakers.

When someone didn’t understand his Middlesbrough accent, he would shout louder in English, believing repetition at higher volumes would get him his ice cream.

Shouty investors are the same.

In their minds, they’re offering you a chance to prove your genius by doubling their investment in a year, and no logic will dissuade them.

How to deal with them?

First, diagnose where they are on the ‘Shouty Spectrum’:

1. The Pretenders – They aren’t shouty investors; they've been primed to act that way because they think they should. They usually fall in line when you explain how the real world works.

2. The Nostalgic’s – Normally the older generation who remembers the high investment returns of the 1970s and 80s, when even cash accounts yielded double digits.

They conveniently forget that inflation was 15%, there was rubbish in the streets, and Jimmy Saville was introducing Gary Glitter on Top of the Pops – nostalgia blurs the bad parts and highlights the good. Telling them the current reality usually brings them back to reality. They’re not daft, they’re just nostalgic for the good old days.

3. The Shouty Investors – The full-on shouty investor won't budge with logic or reason – they bully until they get what they want.

The trick is: don’t rise to the bait; you can't argue with a rock. Just ask:

‘Do you want me to tell it like it is, or what you want to hear?’

Then let them decide.

If they choose ‘tell it like it is,’ explain you can't control investment markets. Returns can vary; if you could guarantee 20% yearly returns, you wouldn’t be behind a desk talking to them.

It’s not what they wanted, but it’s reality.

If they choose the latter, direct them to companies promising high returns with low risk, telling them what they want to hear.

Suddenly, THEY have the responsibility, and they don’t want it – they want YOU to take it. But you’ve sidestepped it and put it back in their lap.

If they proceed anyway, there’s nothing you can do – they’re like the reason bleach bottles have ‘don’t drink’ warnings.

DON’T try to ‘fix’ them along the way – it won’t work and will be miserable.

Après tout, mon grand-père est allé dans sa tombe sans qu'un mot de français ne soit jamais passé par ses lèvres.

FINANCIAL PLANNERS - Tech Heads are an interesting breed and usually stand out like a Belisha beacon at your initial consultation.

Picture this.

You've pitched your Financial Planning service, highlighting how it encompasses all their assets, pensions, investments, and more. It leads to a plan aimed at fulfilling their desired human outcomes in life and lifestyle.

You’ve emphasised the vital point - without understanding their desired human outcomes, effective planning is impossible.

But the Tech Head doesn’t want to hear that. So, they bombard you with technical questions and homemade analysis spreadsheets.

They’re like a mad scientist, poring over their analysis, convinced if they look harder and do more calculations, the answers will magically appear. They won’t.

While effective in their technical careers, this method falls short in Financial Planning. It requires a holistic view, prioritising human goals, using technical solutions as tools to achieve those goals.

How to handle a Tech Head?

First, identify the type you're dealing with. There are generally two:

The Tetris Head: They are relatively harmless. They understand the concept of holistic Financial Planning but need a few technical details to align everything in their mind, like a Tetris game where the pieces just need to slot into place.

They're not interested in technical intricacies; they just don’t know there’s an alternative.

Answer some of their questions but stay around the edges of the swamp. Gently coax them towards the green pastures of humanness, and they’ll follow!

The Full-Fat Tech Head: These are more challenging. They firmly believe the solution lies entirely in technical details. They’ll bombard you with technical questions, expecting each answer to resolve matters.

This cycle leads deeper into technical minutiae, distancing from the true answer, found in their heads and hearts.

For the Full-Fat Tech Head, don’t delve into their endless technical queries. They want you to wallow alongside them like a pair of technical hippos.

Rather than answering technical questions, directly ask, "If I gave you the answer to that question, how would you use it?" or "How would the answer help you make a decision?"

If they can’t articulate their response, don’t provide it.

This strategy shifts the conversation from technical details to more meaningful human outcomes.

Tech Heads often have a more holistic partner. The Tech Head is likely eager for a technical discussion with you, while their partner dreads having to sit through their partner's spreadsheet talk.

Imagine their surprise when you prioritise their vision for a fulfilling life and lifestyle over their partner's spreadsheets. You have a new friend, and the meeting's focus shifts away from the technical swamp.

Whichever way you go, remember, when faced with a Tech Head firing technical questions at you, if they can’t explain what they’d do with the answer – don’t give it to them.

FINANCIAL PLANNERS - Here’s a weird situation you’ve probably come across.

You've delivered a knockout Financial Planning session, invested significant effort to shift your client’s focus from the small technical details to the bigger questions about their ideal life and lifestyle outcomes.

Most importantly, you’ve got them viewing decisions through a human lens rather than a technical one.

Pleased with the progress, you arrange their next session and send them away to ponder a few things.

Then something strange happens...

At the next session, you’re ready to dive deeper into that human detail but they start asking weird questions—technical questions about tax, performance, and investments.

- Questions you thought were resolved last time.
- Questions irrelevant to their situation or financial plan.
- Questions prefaced with “I’ve heard that...”

This is when your instincts should kick in.

You have a puppet and master situation.

There's someone in the background whom the client is reporting back to, someone they hold in high regard and seek a second opinion from. It could be their spouse if they’ve come alone, a family member, a colleague, or even a professional such as an accountant or solicitor.

While probably well-meaning, they are not helping.

Financial Planning is one of those unique professions where people will seek guidance from almost anyone, regardless of their qualifications.

If you get a diagnosis from a doctor, you don't call your accountant for a second opinion on that lump, do you?

And if you did, they’d tell you they’re not qualified to give an opinion.

As would Dave, the guy at work who did the first aid course, when you try to show him your rash.

But when it comes to money and investments, everyone has something to say.

So, what to do?

You have two options:

1. Cut the strings - Ask, “Are you making your own decisions or are you consulting someone else?” This forces the issue into a binary choice: either they are making the decisions, or someone else is. If they confirm they are making the decisions, agree not to allow any outside influence, however well-meaning. If they admit they are not comfortable or capable of making their own decisions, then move to step 2.

2. Talk to the master - If there is someone in the background pulling the strings, your next best bet is to get them to come along. If they are the one making the decisions, they need to hear the information firsthand. It's not going to work otherwise.

If you do get them there, they will be your best ally. Instead of criticising from the outside on a subject they don’t understand, they will engage directly with you and reinforce your message to your clients. If you can’t beat them, get them to join you.

But you’ll never succeed by talking to the puppet.

So, either cut the strings or talk to the master.

Sometimes, you’ll come across clients who only want to talk about price—the ‘Fee Negotiators,’ as I call them.

So, should you negotiate?

Well, I’ll give you four reasons why you shouldn’t and three tools to use instead.

Why you shouldn’t....

1. You’ll break the seal in your mind - Once you give yourself permission to reduce your fees, you’ll do it again and again. It’ll become a crutch you lean on whenever you encounter a difficult client. Worse, you might start offering it when you don’t need to.

2. The relationship will never recover - If you start the relationship by conceding on price, it sets a negative precedent. Essentially, the client has pressured you into a fee reduction, and you've complied. The balance of power is skewed, and they’ll likely continue to push you around.

3. Professional Pride – You've worked incredibly hard to reach your current level. Long hours of study, professional development, and learning from mistakes have led you to provide an excellent service. You’re a professional, not a market stall trader.

4. Referrals – If you take on the Fee Negotiator at a reduced rate, what happens when they refer someone to you? You’ll have to offer them the same deal. Fee Negotiators will always refer other fee negotiators, perpetuating the cycle.

“It's easier said than done when you have bills to pay and Paraplanners sitting idle," I hear you say!

True, so here are three tools to deal with fee negotiators:

1. Involve the partner – If the Fee Negotiator is in a relationship, they are likely to be quite technical and transactional in mindset, while their partner might be more holistic and relationship-focused. Your service is holistic, so sell it to the partner who is buying what you are selling. They’re also likely to be morbidly embarrassed by their partners bartering and the one person most skilled in reigning it in.

2. Call it out – A useful line is, "If cost is your main driver, we’re probably not for you." This simple statement forces the client to admit that other factors besides price are important. It opens the door to discussing how your services meet those broader needs.

3. Give them choice (just not with you) – Often, clients want top-level service for mid-level prices and expect you to reduce your fee. Instead of conceding, show them mid-level service alternatives from competitors that come with a mid-level price. This shifts the responsibility of making the equation work away from you and forces them to consider the service level they would get elsewhere. They’ve now got to argue with themselves – not you.

Remember, a client who won't pay you your worth isn’t a client you want.

I often hear clients say, 'I just need you to sign this form, no advice needed,' accompanied by a cheerful 'This'll only take 5 minutes.'

Of course, when you look at the form, it’s normally from a provider asking the client to confirm that they’ve received advice before doing whatever DIY action they are attempting to perform.

To be fair to the client, it’s not their fault.

They’ve been told by their provider/solicitor/employer that they need to ‘Get a form signed.’

It isn’t helped by the fact that, for a certain generation, getting a form signed by a professional was a common task before the internet.

So, here’s your problem…

They want a form signed. You want them to engage in your Financial Planning service so that, once completed, you can sign their form.

Their current engagement level is very low.

They’ve come to you for what they feel like is a 5-minute administrative task.

You know that to 'sign their form,' you'll need to complete a full Financial Planning process, which takes several weeks of work.

This contrasts with the 5 minutes your client expects to invest. The first meeting will likely take 30-45 minutes to walk through the Financial Planning process, potentially including a coaching session.

So, what to do?

Well, what would your GP do?

If you arrived at your doctors with a DIY prescription, saying ‘Don’t worry, this’ll only take 5 minutes, I don’t need a diagnosis, I just need you to sign this form so I can get some Tramadol’

How far would you get?

Not very….

Separate the 'signing of the form' from the 'advice process' it confirms.

The only way is to show and tell – with the emphasis on the ‘show’.

If the form says, ‘Please sign to say the client has received regulated advice on this transaction’, show them what ‘regulated advice’ looks like.

Have some example fact finds, client reports, financial plans, and suitability reports in your meeting room so you can show and tell.

The thickness of the example reports will show your client this isn't a 5-minute job and you're not just trying to hustle them for more fees.

Even with this, you’re unlikely to get an instant buy-in from your dismayed potential client.

Why?

Firstly, it’s not the answer they wanted. They’ll probably want to go elsewhere in the hope that you’re flannelling them and someone else will just sign their form.

Secondly, they’ve only allocated 5 minutes to this task. They aren’t in the right head space to have a proper discussion – and they’ve probably turned up without their partner.

Sometimes, it's best to schedule a first meeting a few days later, giving them time to move from denial ("You're wrong!") and bargaining ("I'll find someone else...") to accepting the need for financial advice.

But it's important to differentiate between the client who genuinely didn't realise they needed advice and the client who knows they need it but doesn't want to pay for it.

That's a story for another day.