Webinar The human-centric planning meeting

(00:04):

Hi, and welcome to this webinar on the human-centric planning meeting. Now, I mentioned this before, the superstructure of these sessions is always the same. I always begin with a very brief explanation of what it means to be human-centric in this particular area. In this instance here, the planning meeting, I then look into the definition and the purpose of the particular meeting that we are discussing. I then also reflect briefly on how to prepare for this meeting. And this is always both logistically and mentally. Before I have a very quick recap on what it means to be a good listener and how we ought to be thinking about trust and trust building, I then look into the structure of that meeting before giving some recommendations on post-meeting activities. And you know what? I say this all the time that I am very practical in these sessions.

(01:16):

And this is not necessarily to tell you like, this is how you ought to do it, right? I mean, who am I to tell you this is not what I envision, or that's not the reason why I do this. Really, the reason I do it is because I want to bring to life the particular vision of what financial advice is for. We say here, this is financial advice for real lives. Really, in my mind, this is educational content for advisers, financial advisers who see themselves as financial life planners. So life planners with a strong financial component. So it's really more about that vision and what it could look like to be that type of adviser, rather than telling you like, how to do this. Well, without further ado then, let's look into the actual notion of human centricity first. Now, you know what, I wanted to reflect on this question very quick, right?

(02:22):

If you ask people why do they seek financial advice, you are appealing to the quick thinking, rational side of the brain. And as a result, it is really easy to very quickly think of the reasons that are here on this page, right? So when you say, well, I have a financial adviser, or I sought financial advice because I needed help with tax planning, with estate planning, with insurance needs, with retirement planning, and et cetera, all those things. And of course that's true, right? I mean, that's a reason for why people seek financial advice. But the whole notion that I want to bring to life, or what I want to encourage you is to think is that it is more than that. It is much more than that. Because after all, I don't think that you will ever meet a client who comes in. Oh, perhaps on occasion you do, but very rarely will you see a client who says something to this effect here on the left hand side.

(03:24):

'I aim to accumulate a portfolio worth 2 million pounds by age 60 with a balanced risk profile.' Now, if that was everything that clients wanted, then yeah, absolutely. Technical skills and good communication skills is all you're needed. Chances are that when clients come to see you first time, you're much more likely to hear them say something here on the right hand side, something like that, right? So it's, I hate dealing with numbers. I'm swamped with work. I want to be certain that I don't run a lot of money, et cetera, all those things. And what you see here is what Moira Somers would call emotional drivers, right? And these are things like, there's anxiety, there's perhaps overwhelm, there is perhaps analysis paralysis. There are a number of other reasons, including you know, I want to do someone else a favor. I am looking for someone else to blame.

(04:27):

There's a number of reasons, okay? For why people seek financial advice, and they are emotional drivers. And as I said before, as well, really, you know, there are wellbeing oriented needs or values driven motives for people to seek financial advice rather than just the utilitarian and hard-nosed ones, right? And I think the human-centric adviser really understands that the human-centric adviser is a type of adviser who understands this isn't just there to accumulate wealth. This is someone who seeks help so as to live the life they want with the resources they have with the financial material resources they have, but also other resources they have on the more, you know, psychological and emotional side. So that's really the notion of human-centric advice. Let us briefly reflect what is the purpose of the fact-find meeting. And we did look at this in the initial meeting as well.

(05:34):

So, you know, it's perhaps useful to distinguish, yeah. So between the initial meeting, the fact find, or the client review meetings and the screener, that happens before. So the, the fact find is in this journey happening after the the initial meeting and happens when you know that the client is a good match. So you have met them, you have met them before the planning meeting or the fact find, whatever you want to call it. You have met them before, and you have established in that meeting that the client is a good fit. And now you can go into the planning process and provide recommendations on the back of that. So let's just briefly recap the definition of the initial meeting that I covered in the other webinar is to verify whether both the adviser and prospective client feel reassured and optimistic about the potential partnership.

(06:32):

It's more than just capturing basics, that's for the screening process or diving deep. That's for the fact find. It's about making sure the prospective client and adviser are a good match for each other. And the purpose of the fact-find meeting as a result, really is to capture your clients' centres, whether they are you know, family-centred, partner-centred, work-centred. Perhaps they are money-centred. Perhaps they're self-centred. Steve Covey speaks about the different centres that everyone has. You want to understand their purpose, pleasure, balance. I look into this in more depth later on in this session. And you want to understand the hopes and fears of their future self. Again, more on this in specific the notion of hopes and fears in the session on the client review meeting for long-term clients, what I want you to reflect on is how much of what has oftentimes been typically covered in a planning meeting.

(07:36):

Things like, you know, personal information, income and expenses, assets and liabilities, insurance and protection, risk, all those things. And as far, these things could potentially be captured separately, for example, by asking the client to complete forms prior to the meeting, ideally online in a, in a sort of interactive and engaging way, because you really don't want to use much of the fact find or the planning meeting to spend on these things. It's a waste of your time. It's a waste of your client's time to use that face-to-face time for that purpose. You really want to look into the more human aspects of the client. What drives them? What are their centres? What do they want? What are their concerns? What are those things that are needing to be addressed?

(08:29):

Here's an example where you want to get to in my mind, right? So, as I said, this is about demonstrating or bringing to life this vision of what it means to be a human-centric financial adviser. And what you see is happening here in this financial plan, it's a way to consolidate, reconcile, bring together the financial side and the bigger life themes that matter as well to the client. By the way, please really don't study in too much detail the figures as they stand there. I presented this once to advisers, and the hand went up and an adviser said, 'I see here the net worth of that client is, what is it? £830,000 and the IHT liability is this. That's really indicative of a bad financial adviser', right? So that's not the point. That's not the point of this slide of this financial plan.

(09:29):

The point is really just to demonstrate how the two could hang together, okay? And how the two could hang together is, of course, by linking the financial side, the net-worth side, and the incomings and outcome cash flows, and what money is being spent on et cetera. To link that to the principles I said, I called it principles in this instance. I also call it your centres, your values. There's different names. I use these synonymously, so to your goals. And of course, the difference between goals and centres goals and values is that goals are more sort of time bound, right? You achieve them, and then you know, you move on perhaps to the next goal as Chris Budd always puts it, you know, you achieve a goal, and then what? So the next goal will be very much informed by the deeper values and the deeper drivers that inform the goals in the first place.

(10:20):

Then you have a bit of an overview, and this is just a quick summary of where they are at the moment. And then here, I recommend this at the bottom right, you see this here a spending goal for the next 18 months. And there are some reasons for why I recommend you do this. And let me just bring up a few here. The number one is, perhaps you know this as well, it's always causing really lively debates with financial advisers that I'm meeting, that there is a high number of people who have objectively a high amount of wealth, high amount of savings, good cash flow, but have a real problem spending the money. Yeah. And that's not just in retirement, it's also before retirement. It is perhaps especially pronounced in retirement, but it's also before retirement. And I think this speaks a little bit to the fact that we are typically not taught to spend the money.

(11:26):

And this is, of course, a big irony, right? To an economist, there's no such thing as saving, there's only deferred spending. But many people have real problems spending the money. So that's why I think you want to educate and you want to teach and help people learn to spend the money. There's another reason for for this, and this is something that Meghaan Lurtz highlighted again in Brendan Frazier's Human Side of Money podcast. And this is that we are not typically you know, paying attention to the things that make us happy. But by assigning a price tag to a wellbeing goal to be achieved in the next 12 to 18 months, then we actually learn to pay attention to the things that do make us happy. It forces us because we are now taking money into our hands so as to achieve that goal.

(12:26):

Also, of course, another reason is that one day you will look back and you will think, all right, okay, wow, look at all the things that I have achieved all these experiences that I have accumulated along the way. Okay? So these are just some reasons for why I think thinking about spending goals, something that you want to spend money on that the client may want to spend money on in the next 18 months or 12 to 18 months, right? Right. Let's move on then. Let's look briefly into preparation for that meeting. And I said this before, there's always a sort of logistical side of preparing, and then there is a mental side of preparing. So, on the logistical side, I think you always want to, this is so important. You want to set expectations, you want to send an agenda, right? You want to highlight that the purpose of the meeting is to get to know them, to get to know the life they want to live, what matters to them, et cetera.

(13:22):

And if that is appropriate, if your infrastructure you're working in allows for this, clarify that the financial facts will be captured separately and digitally. And then on the mental side, and I think this is much more important, really try to memorise and try to be very clear that this isn't the focus of, this isn't the financials. Yeah. So really what you do, I said it before, you want to help clients live the lives they want with the resources they have. Yeah. And this is why it is so important to understand what is that life that they want to live, right? How do they currently make trade-offs between their present selves and future selves, both in terms of what makes them happy, and in terms of financial security, how would they really want to ideally make those trade-offs? Bear in mind also, you know, this is where it later on hangs all together.

(14:20):

Also when we start thinking about referrals, it's not about selling, okay? It's not about selling you, it's not selling about selling products, services, et cetera. It is, it comes from a genuine place of wanting to help. And of course, you know, along the way, again, we speak about this, you want to be a good listener as well, right? So, very briefly, I want to think about trust, I said this before. It's always with thesession on trust and listening as well. And you know what I want to I want to say something very quick in favor of small talk. Small talk oftentimes gets a bit of a bad reputation, and it is being conveyed sometimes that small talk is just, you know, wasted time. And instead of asking sort of small talk type questions, you should be asking deeper questions so as to get to know the client at a deeper level.

(15:18):

But you know what, I will say something in favor of small talk, and that's perhaps reflective of my anthropological background. I think one of the, I think there's real utility in small talk, and I think at the very essence, what you're doing when you're small talking is you're trying to figure out if you are agreeable people. I mean, even when you ask simple questions like, you know, how's the weather? Or we have bad weather coming up, don't we? And you know, how was your trip here? Et cetera, all those things, right? So you are, you're indicating you are an agreeable person. And I think this is really, really important. So you, you, you make this initial contact, you build rapport. You, you, you perhaps reinforce a bit like social norms, right? You're saying like, look, this is, you know, I yeah, absolutely.

(16:11):

You're, you're playing a game a little bit, but you're indicating, you know, the rules of this silly game. Yeah. so there's, there's other reasons, but I think this is, this is important to bear in mind. Then of course, there are those deeper questions that are worth asking. And this is something, you know, picking up something that you may have learned in the initial meeting. Perhaps the client indicated a particular concern of theirs in, in the initial meeting. Perhaps they told a story about what's happening at work. Perhaps they addressed a certain anxiety or something, right? And this is, this is a good way to perhaps start the conversation to, and indicate that you've been listening before to say, look what was it about this particular thing that you said? Help me understand this, right? Let's look into listening skills then very quick.

(17:05):

Now, this is a framework that comes from oMney Quotient. And I really like this. This is the weight framework or challenge where every letter of weight stands for something. Why am I talking? And what the colleagues at Money Quotient invite you to reflect on is what are the reasons for, why you are talking? Are you just reflecting? Are you just reflecting back in that instance? Use your own words to do so. Are you offering an example? In which case consider using the client's words to connect better and bring it to life in a more meaningful way to the client? Or are you trying to hear your voice, right? Is that, in essence what it is? And if that's the case, then don't do it. Yeah. So really focus on listening instead of speaking, remember the 80 20 rule of thumb that I mentioned earlier in the initial meeting?

(18:07):

Now, I want to invite you to also think about how to, how to listen and what to listen for. And there's two things that I think are really important. One is you want to listen to how they like to spend their time, and you want to listen, especially to understand what it is that in their everyday lives gives them a sense of pleasure and gives them a sense of purpose. This goes back to a framework that's been established by Professor Paul Dolan, who is a behavioural scientist at the London School of Economics, who really says that happiness, in essence, is an even balance of pleasure moments, activities, experiences, things as well as purpose moments. Okay? And the point he makes is that you don't want just pleasure, and you don't just want purpose. You want an even balance. So when you look at this dial here, the the dial should be in the middle.

(19:08):

It shouldn't be you know, at, at either end of this particular dial. So what does he mean? Now I think what is important to understand pleasure is all about, as I said, things, activities, experiences, moments that give you a sense of joy, that give you a sense of gratification, that give you a sense of relaxation. Okay? So happiness in a sort of you know, everyday understanding of the word, but then what does purpose? Purpose is all the activities, things, experiences that make you feel worthwhile, competent, and useful. And this doesn't have to be big stuff. It can be quite banal. Things like, I don't know, the school drop off or I don't know litter picking in the public park or whatever. So it doesn't have to be save the world type stuff. It can be really banal activities.

(20:08):

And what Paul Dolan mentions or says is so important is that we look at how we experience these things. So rather than how we say or what we say we like, but really how we say it. And an example, perhaps to bring this to life, a friend of mine here at the University of Edinburgh, she works in a lab and she is in charge of supply chains, and she also manages students, and she needs to write grant applications, et cetera. And when we meet, she's often on about how bad her job is. So she's telling me, you know, that the, the labs are not funded in the way she'd, like, the students aren't interested, the grant application processes are burdensome, et cetera, all those things. So she's always on about how bad it is. But then she also says things like, well, but what can I do?

(21:09):

I'm an academic and I like, and I love my job. So obviously the one thing is the experience, and the other is the evaluation, how you evaluate that experience. So you really want to listen to the experience. So do they really like being a board member in their spare time, or is it just something that they say, you know, because it sounds good. So all those things you want to understand what are the experiences and how much joy and purpose do they get out of experiences? The other thing I think is really important is to listen to the mental time horizon. So what I mean by that is that when they speak about the future, at what point in the future do they refer to? Is it in a year's time? Is it five years time? Is it 10 years time, 15, 20 years time?

(21:57):

And how concrete or vague is that connection to the future self? I'll give you an example. If you say something like, once I retire, I just want to have peace of mind. That's a quite vague connection to your future self. If, however, you say something like, once I retire, I want to live in the outskirts of Edinburgh with easy train links into the city so that I can enjoy night outs and shows in the concert hall on weekends. So then you have a quite concrete connection to your future self. Okay. So, that's the point. You want to understand what point in the future do they refer to when they speak about the future, and how concrete is that connection to their future self? You know what, I think there's a big gap between how future oriented the industry is.

(22:56):

And by that I mean providers like Aegon as well as financial advisers who are, you know, very future oriented in the sense, you know, we really understand why it is worthwhile to set out market volatility. We understand how compound interest works, we see why critical illness cover is something that is beneficial to take out early on, all those things. Now, to a client, oftentimes they struggle to be thinking about what's up after the summer holidays or after the Christmas holidays, okay? They're not used to be thinking that far out. And this is, I think, one of the critical jobs that you have, is that as you help them live the lives they want with the resources they have, and really what that means is you make them, you help them, make better trade offs between their present selves and their future selves, both in terms of happiness and in terms of financial security. As you do that, you want to understand what is their mental time horizon, and you want to help them to stretch their mental time horizon. That I think is a critical skill of the human-centric adviser.

(24:09):

Right? So let us go into the structure of the human-centric planning meeting then. Now, as you see here on this page, I think first 10 minutes or so should just be setting the scene, right? So you ask the small talk questions, perhaps you ask some of the more meaningful questions as well, so as to get the way paved for the core of the discussion a little later on. Now, there's a good example here, I think for a question that you could ask. And again, this is a tip that comes out of Brendan Frazier's podcast. He advises not to ask, is there anything else you'd like to discuss? Because that just, not just people to say no, and that's fine. Instead, ask this question that you have here in the third bullet of this page. Now, as far as the main part of the meeting goes, you know, what the next sort of 30 minutes, I really like these questions here from George Kinder, who's of course the, the father of the financial life planning movement, who has written this book, the Seven Stages of Money Maturity.

(25:22):

And within there are these three questions. Now, you know what? I won't read them out, but I do encourage you to hit the pause button here now and really read these and think about them yourself. I think they're really powerful questions. So please do this. Just hit the pause button now and read these questions and ask yourself how you would answer them.

(25:52):

Now, moving on, I do want to provide another alternative because I do realise that these are quite deep questions to ask, and that it takes a bit of guts to ask these questions. Not everyone will be familiar with asking the George Kinder questions, which is why I provide this example here of getting to know your clients as a second option or a second scenario. Really, the purpose, and this is again, very much inspired by Steve Covey, who I have now referred a few times the author of the Seven Habits of Highly Effective People, where he talks about the different centres people have, and here are examples of what different centres are. And there are more, look them up. And, and perhaps, you know, there are more kind of types of centres that you are discovering when you are discussing meeting the client.

(26:55):

Now, the questions you can ask, so as to identify these questions, I haven't put them here, but I think, you know, in, in a way, perhaps the structure of small talk questions. Then, you know, one of the more meaningful questions, and then, you know, driven by your own curiosity to get to know the client. You know, perhaps a natural conversation will follow that allows you to identify these centres. But questions you can ask resource to get to know someone's centres are like, are questions like, what's the most important thing in your life right now? Which taps into their current priorities. Is it, is it family? Is it growth? Is it, is it career, et cetera? When you think about your future, what do you hope to achieve or have more of? Which reveals some of the more long-term drivers.

(27:48):

Again, is it wealth? Is it relationships? Is it personal fulfillment? Things like that. What's something you'd drop everything for if you needed your attention, if it needed your attention? So this pinpoints what they prioritise above all else. Is it kids? Is it the spouse? Is it work? And in a similar vein, you could just ask some questions that allow you to explore decision making and time allocation. So when you're asking something like when you're faced with a tough decision, what's the first thing you consider? Or how do you typically spend your free time? And what makes that time meaningful? Okay, so, so these are questions and perhaps you can sense them in as far they allow you to dive deeper into these centres. Now, when you have a bit of an understanding of what the centres are, then I would do this piece that I mentioned earlier with the stretching into the future.

(28:48):

Okay.So now you know that they are, that they have a certain type of centre, that there are certain activities that give them purpose and that give them pleasure. Now ask them like, what would this look like in, you know, how would you sort of feed and you know, live this centric type of lifestyle? If it's family centric or whatever type of centre it is, how would you live that in five years time, in 10 years time, in 15 years time, et cetera? So, you know, this speaks a lot to the notion that being future oriented means to have a sort of intrinsically motivated connection to your future self. Not, it's not so much about by the age of 60, I want to have a certain amount of wealth. No, it's more by the age, age of 60, whatever the, whatever the time reference point. By that point, I know where I want to live. I know what I will be doing day in and day out. I know who I will be spending time with. I know what will give me a sense of pleasure. I know what will give me a sense of all those things. Yeah. So that's, that's really what you're wanting to do. So after you have identified those centres, you sort of stretch into the future and seek to understand what is it that these centres look like in a few years time.

(30:07):

Now, there is a risk with introspection. Yeah. And really what we're speaking about here is you're inviting introspection on the client side, you're wanting to understand what are their centres, how do they make the trade offs currently between present self and future self, both in terms of happiness and financial security. How do they do that? And as they reflect, you will get good answers. And answers that inform a financial plan answers that should inform a financial plan. But there is a big risk pitfall that comes with introspection, and I just mentioned that's availability bias and recency bias. Now, availability bias is a bias whereby we are just saying the things and reply to questions that are like quickly available to us in our heads. Okay? So for example, this is the classic. You say, what do you want to do when you retire?

(31:04):

And the immediately available answer is travel, right? So you say travel, okay, but you do not necessarily want to travel, really, right? It's just because it sounds so plausible and it is so immediately available that you say that. Another example for recency bias is that, say you've been at a family gathering recently, and that was such a nice gathering, and now that informs your answer to say that family really is the most important thing to you. And I mean, perhaps it is, but perhaps it is recency bias speaking. So what the colleagues at Morningstar have done is now a few years ago, but it's a really good way of sort of countering the risks of introspection. And that is this. They have built a master checklist of investment goals. You see them here. So these are, these are master check, master goals, master investment goals that typically clients express in the meeting.

(32:12):

And the way the colleagues at Morningstar suggest you apply this master list is that after you've gone through this first process of asking them and finding out about them, you present them with this list and you say, look, this is a master list of investment goals. These are goals that we know other clients have when we are building plans for them, financial plans for them. And do any of these resonate? Do do any of those, you know, sound familiar to you or sound as though they may be goals of yours? And what they found, and I think this is staggering, is what you, what you see here in the bottom right, they found that on average, 26% of participants changed their top goal after seeing the master list. That's quite a high number, 26%. And then about 73% of participants substituted at least one of their top three goals with goals from the master list.

(33:11):

So I think this is this is really insightful and this is why it is an important additional step to not just rely on introspection or not just rely on, you know, the self knowledge that you acquire when asking those questions or the knowledge that you acquire about the client when you're asking those questions from the previous slides here, but to sense, check it with this master checklist of investment goals. Now, then what what happens after this in the, in the final part of the meeting you just summarise what you have learned. You do reconcile or consolidate this a little bit with the financial assessment that has happened either before or in parallel, however, you know, the infrastructure at your company. But you will say that what follows is your building a financial plan, right? A financial plan that considers the financial side of things, but also considers the life goals and aspirations and values that you have learned about here in that particular meeting.

(34:24):

Right after the meeting, then what you do is you send a follow up email. It is an email that demonstrates that you've been listening really, you know, again, with the purpose of deepening the emotional reaction provide clarity on what is to follow and announce that from now on, you know, what the, what the pattern will be in terms of you know, client review meetings and updating the plan subsequently. Right. Let's, let us stop here and reflect briefly on what we've done in this webinar. We've looked at what it means to be a human centric adviser. And I asked this question why do people seek financial advice versus why do they really seek financial advice? We then looked into the definition and purpose of the meeting. We looked into preparing the meeting. We looked as ever into building trust and being a good listener before covering the structure of such a meeting. And I briefly discussed post meeting activities you want to do as well. So the next meeting will be the client review meeting. So now you've entered the relationship, you've built the plan. How do you want to conduct a client review meeting that follows subsequently from now on? That is to follow in the next webinar of this series, human-centric advice. Thank you so much for listening.