Real-Life Communication -- Solution
You're a financial planner and you've just made an appointment to
meet with a new client.
The client wants your advice about whether
or not to buy a house. Before you give any advice, you have to find out more
about the client's financial position and goals.
"The course you take
with a 25-year-old and the course you take with a 60-year-old are very different,"
says John Mallet, a planner. "And each person is different. You really have
to find out where they are, what they want to happen and what they would feel
comfortable doing."
Here is a list of information a financial planner
needs from the client before giving any advice. These were taken from a pamphlet
called Personal Financial Analysis, published by a financial planning company.
Planners
give a copy of this form to the client and ask them to fill it out before
their first appointment. Or the client and the planner fill it out together
at the first appointment.
Personal Financial Analysis:
Personal
data:
- Name
- Address
- Occupation and employer
- Names of spouse and dependants
- Birth date
- Telephone numbers
- References
- Professional advisors (like lawyers and accountants)
Net Worth Statement:
List all assets:
- Deposit accounts like checking and savings accounts
- Investments, like real estate, retirement funds, bonds, stocks, business
interests
- Other assets, like cars, jewelry, furniture and accounts receivable
List all liabilities:
- Mortgages
- Loans for things like cars and furniture
- Accounts payable for things bought on credit, along with bills and taxes
- Other debts, like personal debts to family members
Financial Goals
The client's stated goal may be to
"buy a house." That's a pretty big goal and one most people share. But you
have to be on stable financial footing before you can buy a house. Most people
have to start with smaller goals before they can comfortably afford to buy
a house.
For instance, it would be bad advice to tell someone to buy
a house if they can barely afford to pay for necessities like food and rent,
and pay off debts on credit cards, education and vehicles.
Ask the
client if they have any of these goals:
- Take a big trip
- Pay less income tax
- Start their own business
- Get more education
- Pay off debts
- Beat the cost of living
- Retire comfortably
- Learn to manage money
- Retire early
- Have a financial reserve
"A big part of what we do in working with our clients is more on
the emotional side of things -- communicating with them the softer sides of
the issues," says James Whaley. He is a certified financial planner.
"It's
really what makes the job fun.... If I just had to sit and calculate numbers
all day long, then it would get pretty boring pretty quick. The difference
is the human being. Every person that comes in is just a little bit different,"
he says.