Hi. I’m Karen Lee, President of Karen Lee & Associates. My firm is part of the Integrated Financial Group, a consortium of 40 elite advisors and one of the largest branches of Securities America Advisors.
The #1 thing that advisors should be aware of is how common it is for clients to be their own worst enemy when it comes to implementing a financial plan.
I’ve been a financial planner for over 20 years and I can’t tell you how many times I’ve seen clients trip over their money baggage. It’s like an elephant in the room and unless we, as advisors, acknowledge its presence and help clients see how it can cause them to sabotage their best-intentioned plans, we are not serving them well.
Have you ever had a client tell you that he wants to get his kids through college and then retire at 55? Sure - we all have. So you develop a financial plan that will help him do just that. But instead of following the plan, he’s always got an excuse as to why he’s spending the money that he should be saving.
I have found that if I uncover clients’ issues around their relationship with money when I first start working with then, we are much better able to discuss their behavior and avoid some of the things that throw them off track.
As advisors, we are not therapists - nor should we be. But we can develop a protocol with new clients that enables us to ask questions like:
- How were money decisions made when you were growing up?
- Who kept the purse strings?
If I’m working with a couple, I’ll probe for answers to those questions from both partners. I’ll ask them how they make money decisions in their own relationship - which inevitably tells me whether one is a spender and the other a saver.
While we often learn about issues over the course of working with clients, getting it out on the table at the beginning of the relationship is a tremendous advantage in helping them avoid - or at least be conscious of - the traps they might fall into. They are able to be more successful in achieving their goals, which makes me more successful as an advisor.
To read more about this subject, read my article, A Fine Line, in Financial Planning magazine. You can contact me through my website www.karenleeandassociates.com.