Spender or saver? Worrier or risk-taker?

Sitting across from a client, a financial planner wants – needs – to know more than the amount of money to be managed.

Fisher Dougherty

“What we need to do is make sure we’re managing the clients’ personality,” said Alecia Fisher Dougherty, managing director at Naviter Wealth. “We have to make sure that we’re coming up with a solution that’s going to be successful for the clients based on their fundamental personality.”

Finding out what motivates a client is part of a holistic and behavioral approach to financial planning, which involves budgeting, retirement planning, investments, insurance and estate planning. Each topic may be independent, but together they form a cohesive, coherent strategy that is based on a client’s goals.

“For a lot of my clients, it’s really about getting to know them and making sure that they’re setting realistic goals for themselves,” said Denise A. Kelly-Dohse, a wealth advisor and certified financial planner with Canandaigua National Bank. “I find that a lot of times people are very emotional about their financial decisions. Some of them are quick to react and you have to understand what triggers them to make a decision.”

Talking with clients about their goals and learning how they feel about money is the approach many certified financial planners have been taking for years.

Catie Arnold

“I do think that good planners have been doing it for a while – trying to have a good understanding of their clients,” said Catie Arnold, certified financial planner and vice president for financial planning at Whitney & Company.

Calling the approach “holistic” or using the phrase “behavioral finance” brings fresh awareness.

“I do see that there’s been more of an evolution of thinking of the holistic side, if you want to use that term, in embedding more of the emotional and behavioral side,” said Adam Magee, certified financial planner and partner – director of wealth planning at Whitney & Company. “It is definitely a lot more mainstream than it ever has been. Now that it’s out there with those terms, I think a lot more people are starting to see the value in financial planning over just managing the investments.”

At its core, the holistic and behavioral approach is about building a relationship.

Denise A. Kelly-Dohse

“One-hundred percent,” said Kelly-Dohse. “That’s what we want it to be.”

Clients are telling her that’s also what they want.

“If it’s just looking for returns, they’re not always taking into account the big picture and we tend to work with people who want to take into account the big picture,” she said. “It’s not always about what’s the stock market is doing. It has to do with what your goals are.”

Getting clients to identify those goals can be a challenge.

“Sometimes clients will come to you and say they really don’t know what they’re trying to accomplish yet,” said Magee of Whitney & Company. “And that’s OK. But it’s trying to get them to think to that next level to help them do the longer-term planning, or even short-term planning to make sure their financial positioning is working for them.”

Magee and Arnold used the term “coach” several times in describing how they work with clients.

Adam Magee

“We’re not telling someone how to do things,” Magee said. “We’re trying to coach them along to help them make the right decisions with their money.”

“Adam and I talk a lot where the numbers might say that this is the right thing to do.,” Arnold said. “But if you have a good understanding of the client, they might want a different route that still works. I think having an understanding of their behavior to best meet their needs, it might not always be that the bottom line is the highest number. … We want to meet you where you’re at and help guide you.

Just as coaches diagram plays, financial planners have their own versions of Xs and Os.

Dana Vosburgh, certified financial planner and managing director of Advisory Services at Manning & Napier, said technology is helping planners develop and explain strategies to clients.

Dana Vosburgh

“This technology is able to take all that can be complex about individual planning topics and bring them together easier,” he said. “And that’s where I think that holistic planning becomes more and more common because it’s easier to do, it’s easier to deliver now because of technology.”

Software also encourages client interaction through portals that allow them to enter information about investing habits and goals to help create a more complete financial picture. That interaction also makes it easier for clients and planners to collaborate on adjustments to the plan as needed.

To clients worried about how long their money may last, using a model that projects current spending into the future could change behavior.

“What I think about is just giving somebody a sense of control and context so that they don’t feel like they’re completely unable to control their environment,” he said. “That’s when people panic. When you start to worry and you have these emotions, then you make really bad decisions. That’s the most important thing about planning —  just don’t make the really bad decisions.”

The psychological aspects of money and finances are big drivers in clients’ reactions, said Fisher Dougherty, whose husband, Rick Dougherty, also is a managing director at Naviter Wealth.

“At the end of the day, our own biases are what drives us and motivates us to make decisions and have the behaviors that we do,” Fisher Dougherty said.

To create a successful plan over a 30- or 40-year retirement horizon, she said financial planners “really do need to identify what makes the client tick to ensure that we’re coming up with solutions both from an income perspective but also an investment perspective that aligns well with what their beliefs are, because that’s going to create the best outcome for the client long term.”

As for what to call the approach that takes into account the entirety of client’s wishes, hopes, needs and dreams, “Buzzwords are going to come and go,” she said. “The key is to having a consistent process.”

Patti Singer is a freelance writer in Rochester. Contact her at [email protected]



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