How to Take A Life Planning Approach to Practice Management
By FFOC-admin
A life planning approach to practice management is not the antithesis of regular practice management; it's an enhancement, an improvement and a more engaged way of building your practice. In this column and in the months ahead, I will be introducing you to concepts, exercises and even a few challenges. I live by the saying, "No growth occurs in the comfort zone." It's true. None. Therefore, I will offer some advice and ideas that might nudge you from your comfy place into a trajectory of improvement.
Every book on practice management and every consultant in the world will tell you all the processes and procedures necessary to run a tight shop. Much of what consultants offer is basic organizational framework and handy dandy checklists. It's all good. But it isn't enough; it's generic and in most cases puts the greatest emphasis on the numbers. There is a value to knowing what it costs you to run your office, how much income you take home and how much more AUM you need to be in the top quartile of your profession. While there is some value there, the numbers alone do not tell the tale, nor should they necessarily guide your decision-making.
To begin the process of integrating life planning into your practice management you must consider your `intra-structure.' No, I don't mean infrastructure. Your intra-structure will determine your ability to create the vision for your practice, down to the smallest detail and then change from your current model into something else. That shift might require you to make substantial changes, by improving your knowledge, attitude, skills and habits (what Dick Zalack, of Focus Four, calls KASH). Change, for some, is a challenge of Mt. Everest proportion, while others move easily into new realities. How do you feel about change? If change is difficult for you, it's best that you realize it now and consider a different path. If change for you is easier than Clark Kent slipping into a nearby phone booth and emerging as our favorite superhero, than get ready for an earth-shaking energetic boost of adrenaline.
A life planning practice is one that focuses on building strong, intimate and lasting relationships with clients. The practitioner centers attention on listening, hearing and understanding the client, beyond just their visceral wish to "retire someday" or to "buy a vacation home at the beach." The operative word is "understanding," in the context of values, hidden money scripts, experiences, biases and fears. Therefore, the focus is to build a practice that supports the advisor's ability to deliver on its core beliefs.
Take a few minutes and consider what aspects of your practice might need altering if your sole purpose is to build a relationship that goes beyond quarterly investment returns.
In a typical quant-based practice, the focus is on the tools necessary to provide answers to clients' questions. For example, "How much do I need to retire?" A traditional planner might take the rule of thumb of 120% of annual expenses and develop an answer. In a life planning practice, we want to know what retirement looks like. Not just in theory, but we ask our clients to plan out a typical week, month, year and beyond in retirement - what will get them out of bed in the morning, what do they value? Some responses have price tags, others don't. For any financial plan to have a chance of success, a client must own it completely. The clients' dreams and goals must be real and powerful enough for them to embrace whatever changes are necessary.
As planners, we are rarely reticent to offer suggestions to clients about change. Do you have the same ease when it comes to your own willingness and ability to embrace new concepts, ideas and methods?
Change is a process and acknowledging that is an important first step. I suggest you do a little reading on Dr. James Prochaska's Transtheoretical Change Model to better understand the process of change. If we are to embrace the concept that no growth happens in the comfort zone, then we must also hold close the idea that we must change out of our current `doing' into a different or perhaps expanded approach.
Understand that the path to success is rarely a straight line, for you, your practice or your client. There will be challenges, bumps, mistakes and progress. Enjoy the journey.
Every book on practice management and every consultant in the world will tell you all the processes and procedures necessary to run a tight shop. Much of what consultants offer is basic organizational framework and handy dandy checklists. It's all good. But it isn't enough; it's generic and in most cases puts the greatest emphasis on the numbers. There is a value to knowing what it costs you to run your office, how much income you take home and how much more AUM you need to be in the top quartile of your profession. While there is some value there, the numbers alone do not tell the tale, nor should they necessarily guide your decision-making.
To begin the process of integrating life planning into your practice management you must consider your `intra-structure.' No, I don't mean infrastructure. Your intra-structure will determine your ability to create the vision for your practice, down to the smallest detail and then change from your current model into something else. That shift might require you to make substantial changes, by improving your knowledge, attitude, skills and habits (what Dick Zalack, of Focus Four, calls KASH). Change, for some, is a challenge of Mt. Everest proportion, while others move easily into new realities. How do you feel about change? If change is difficult for you, it's best that you realize it now and consider a different path. If change for you is easier than Clark Kent slipping into a nearby phone booth and emerging as our favorite superhero, than get ready for an earth-shaking energetic boost of adrenaline.
A life planning practice is one that focuses on building strong, intimate and lasting relationships with clients. The practitioner centers attention on listening, hearing and understanding the client, beyond just their visceral wish to "retire someday" or to "buy a vacation home at the beach." The operative word is "understanding," in the context of values, hidden money scripts, experiences, biases and fears. Therefore, the focus is to build a practice that supports the advisor's ability to deliver on its core beliefs.
Take a few minutes and consider what aspects of your practice might need altering if your sole purpose is to build a relationship that goes beyond quarterly investment returns.
In a typical quant-based practice, the focus is on the tools necessary to provide answers to clients' questions. For example, "How much do I need to retire?" A traditional planner might take the rule of thumb of 120% of annual expenses and develop an answer. In a life planning practice, we want to know what retirement looks like. Not just in theory, but we ask our clients to plan out a typical week, month, year and beyond in retirement - what will get them out of bed in the morning, what do they value? Some responses have price tags, others don't. For any financial plan to have a chance of success, a client must own it completely. The clients' dreams and goals must be real and powerful enough for them to embrace whatever changes are necessary.
As planners, we are rarely reticent to offer suggestions to clients about change. Do you have the same ease when it comes to your own willingness and ability to embrace new concepts, ideas and methods?
Change is a process and acknowledging that is an important first step. I suggest you do a little reading on Dr. James Prochaska's Transtheoretical Change Model to better understand the process of change. If we are to embrace the concept that no growth happens in the comfort zone, then we must also hold close the idea that we must change out of our current `doing' into a different or perhaps expanded approach.
Understand that the path to success is rarely a straight line, for you, your practice or your client. There will be challenges, bumps, mistakes and progress. Enjoy the journey.
