I know that real financial advisers have spent years helping their clients identify goals and what matters most to them. But I'm betting most people don't think about us this way. After all, we help people build portfolios. What does that have to do with goals and values?
It turns out, pretty much everything.
See, I know that clients don't walk into your office and say, "Hey, help me clarify my goals." But without those goals, without that clear why, it becomes really difficult to help people make the best financial decisions possible. And helping people make better decisions is part of our job, too.
For instance, we know that the simple act of writing down a goal makes it more likely we'll reach that goal. On the flip side, we know that only dreaming or fantasizing about our goals may reduce the odds of their ever becoming a reality. The simple act of giving goals a structure and tying specific plans to those goals makes it much easier to get your clients where they want to go.
(More from Carl: How to keep clients from overreacting to shiny new investing trends)
So when you use this sketch, don't be afraid to talk about goals and what matters most to your clients. Don't be afraid to highlight the fact that wishes won't become reality without some action behind them. And finally, don't be afraid to embrace this part of your job.
Helping your clients get clear about their financial why will help you help them when they're tempted to make a stupid decision. You can remind them of those goals at critical moments. They don't really want to buy an overpriced stock at a market high, right? But it's easy to forget. That's why it's so important that you're there to remind them of their goals and why it's not such a great idea after all.
Reminding clients of their goals is a big and important part of our job, and over the coming months and years, I'm convinced it will remain a priority for real advisers.
Carl Richards is a certified financial planner and director of investor education for the BAM Alliance. He's also the author of the weekly "Sketch Guy" column at the New York Times. He published his second book, The One-Page Financial Plan: A Simple Way to Be Smart About Your Money (Portfolio) last year. You can email Carl here, and learn more about him and his work at BehaviorGap.com.
