When working with a family, we have the client couple create a money constitution. Similar to a corporate mission statement, the money constitution summarises their shared values about money. But there’s one catch: The money constitution has to be in writing. It is really a fascinating exercise.
The money constitution serves as the compass from which all decisions are based. A sample money constitution might read like this:
When you have clients formally sit and discuss what’s important and commit it to writing, you have significantly increased the likelihood you will be able to help them achieve those goals.
Once you have your money constitution, you can strategise with your clients how they are going to achieve their dreams and goals. I use a very simple prop, the money savvy piggy bank.
This piggy bank has four chambers: save, invest, spend and donate. The four chambers are a good visual reminder of the balance that needs to be struck among competing priorities.
How are these values applied in your business practice? You drive them through each part of a client’s wealth management plan. For example, if you are doing retirement planning, you want to be sure their savings and investing reflect their values. Make them think about their decisions in the context of their overall life goals.
For example, does the need for an additional vacation this year outweigh their desire to retire early and spend more time with their family in later years? If they assume too little or too much risk in their investment portfolio during their best wage-earning years, how will that impact their ability, for example, to support elderly relatives?
To drive your client’s values home in the insurance planning process, you’ll want to make the point that the protection decision is a decision of priorities. What is the priority of the family’s security and well-being? With the nominal cost of life insurance, is it really ever about the money? When you are discussing long-term care insurance, you’ll want to explore how the client values the quality of time they spend with their family in their later years.
These are all ways you can offer your client a different kind of wealth management experience—one that’s high touch and deeply personal, exclusive, and driven by values. And it’s unique. It differentiates you from all the other financial service professionals out there and gives you a competitive advantage if you market it effectively.
By Thomas J. Henske, member of MDRT
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