The value of financial planning often stems from helping clients realize their goals… both in the literal financial sense of managing cashflow and in the figurative sense of determining what those goals actually are. The former is often 'just' a question of good planning, but the latter takes continual time and investigation. Aspirations like owning a vacation home can be accepted at face value, or they may signal a chance for the advisor to dig deeper into their clients' deeper motivation.
In this 197th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how to dive into what clients 'really' want – even (and especially) when clients struggle to articulate it themselves. This is important as many of these life decisions are 'expensive' as they represent a deposit of not just cash, but also time and attention – all resources that can be spent elsewhere. Thus, it is essential for advisors to understand what the underlying desire is, such as connection, community, independence, or purpose. Once that underlying desire is revealed, through questions like, "what would having that allow you to do?", the advisor and client can reflect together on the options to fulfill that desire.
One of the most effective ways to evaluate these deeper priorities is through small, intentional experiments. Rather than making large, irreversible commitments, clients can test ideas in lower risk ways, such as renting a similar property in the area where they want a vacation home. Similarly, a client who desires more community might become a one-time volunteer before making a long-term commitment. These experiments can be informative about what the clients truly enjoy, what sacrifices they're willing to make, and whether the experience actually delivered the expected value.
Another thought experiment is to have the client imagine that it's three years in the future, and they've succeeded at whatever they aspire towards. What is their life like? How do they feel? This is especially valuable if the client is stuck between several different paths – often, in describing that imagined moment, more implicit excitement will show for one path or another, informing the direction in which a client can experiment.
Ultimately, these experiments are a practice in the art of paying attention to life's construction. The allocation of capital – be it money, time, or attention – is often what makes up a person's life. So if the advisor can continually hold conversations that nudge clients to look more deeply not only at what they want, but why they want it, clients may find themselves surprised at what 'actually' makes a difference to them in their lives. Over time, these large and small allocations accumulate into a deep value in financial planning!
