Financial Planner

• “Being on the “right side” of the table, for Scott, meant forgetting about what you wanted to sell. The question was what did the client want to achieve? What dangers did clients have that they wanted to eliminate? What opportunities did they want to capture? What strengths did they want to maximize?  Above all, what was the big picture that clients had for themselves, for their families, and for their businesses? Scott’s approach looked at clients as whole human beings who had concerns and aspirations that spanned their own lifetimes and beyond.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page XIV-XV
• “But among those who are truly client-centered, there are some crucial characteristics in common.  They are great listeners and they succeed by asking great questions.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page XV
• “Probably the biggest thing that all client-centered advisers share is a particular quality of client.  These clients are very intelligent, successful, multi-dimensional individuals who demand custom-designed service in all areas of their lives.  For that reason, only a certain kind of adviser will be acceptable to them.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page XV
• “I know many of these advisers and here’s what they tell me their clients want:  First of all, an approach that enables them (the clients) to think about all of their problems and issues- not just those related to their finances.  Next, they want a greater sense of direction, confidence, and capability in all areas of their lives.  Because of this, they want financial strategies to be part of much larger lifetime solutions.  When it comes to solutions, they want everything based on their issues and concerns, not on the adviser’s need for commissions.  It’s very important to these clients that the advisers are independent of bureaucratic dependencies.  They want someone whose loyalty and commitment are to them, not to a corporation.  It reassures them to know that the advisers are personally successful and confident.  They place great value on long-term relationships.  For this reason, they want financial advisers who can help them construct a lifetime plan and then be there continually to help them implement it.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page XV
• “The Trust Formula:  C + R + I / SO….where C= Credibility.  Credibility represents accuracy and completeness.  It also accounts for the ability to anticipate needs and articulate insights.  R= Reliability.  Reliability represents repeated links between promise and action.  It also includes communicating in the client’s preferred medium of communication, and the frequency of contact.  I= Intimacy.  Intimacy represents a willingness to discuss tough topics, and the ability to do so in a manner that is palatable and even welcome.  SO= Self-orientation.  Self-orientation represents anything that draws focus away from the client and toward the planner.  It quantifies the adviser’s underlying motivation for being in the relationship.  It includes a verbal tendency to spend too much time relating the client’s stories in your own stories.  Note that self-orientation is the denominator and is therefore significant to the total score.  It has the ability to break down successful ratings in other elements of trust.  In this category, a low score means the adviser is not self-oriented.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page 15 – 16
• “The Planning Horizon represents a metaphoric horizontal line.  Conversations that take place above the horizon surround the wealth holder’s deepest and most personal intent for their wealth.  Why are they planning in the first place?   Conversations that take place below the horizon surround the strategies and products that can influence the achievement of the wealth holder’s goals as identified above the horizon.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page 19
• “The Three Adviser Styles. These styles offer insight into advisers’ varying roles and behaviors within those roles.  They also offer decision-making opportunities regarding current and future business models.  The Sales Style:  Persuading a prospect or client to follow a specific course of action or purchase a particular product.  The Advice Style:  Providing an opinion about how to remedy or enhance a particular situation.  The Discernment Style:  Asking a sufficient number of the right questions for consumers to achieve their own conclusions.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page 25
• “Most advisers ask questions.  Some advisers ask follow-up questions.  The discernment-based adviser asks enough of the right questions for the wealth holder to reach their own conclusions at far greater depth than they could through the delivery of external recommendations.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page XV
• “When an adviser begins to search for the same kind of deep introspection that a wealth holder longs for in his or her planning life, the two minds merge at the discernment style.  In this style, the adviser uses deeper and deeper questioning to stimulate the client to reach his or her own best conclusions.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page 27
• “The dictionary definition of “Sell” is “to persuade another to recognize the worth or desirability of something.”  The sales style is based on persuading the client to follow a specific course of action or to purchase a specific product.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page 32
• “Advisers who thrive in the sales style:  Enjoy the thrill of the kill.  Lose interest or momentum after the initial sale.  Love to learn the intricacies of how powerful products work.  Enjoy the simplicity of a transactional business.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page 32
• “Discern is defined as “to perceive with the eyes or intellect; to detect; to recognize or comprehend mentally.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page 35
• “Discernment-based behavior is listening without looking for a solution.  It’s asking questions that aren’t designed to lead the client to purchase.  It’s about helping the client still his or her world for a moment, creating a timeless space in which he or she can make a deeply confident choice.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?By Scott Fithian and Todd Fithian.  Page 41
• “Example of Questions to Your Best Clients:  What has been the most positive aspect of planning you’ve done, either with my firm or another adviser?  What has been the most frustrating?  How would you describe my role in your financial situation?  Given what you know about me, what do you think I should do more of or less of in my business model?  What remaining doubts do you have about your wealth or its impact on your family?  Where would you turn to resolve the doubts?  If one thing could change about the complexity that wealth has created in your life, what would it be?”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page47
• “However, the most trusted adviser of the future will define comprehensive management as something altogether different.  Comprehensive will include accountability for overseeing every insurance professional of every kind; every money manager, whether or not you manage the assets;  all of the CPAs and attorneys, any specialist in play at any given time;  the wealth holder’s philanthropic adviser; and even his or her bankers.  This management role will account for every facet of the wealth holder’s financial life, but won’t stop there.  It will address the manner in which their life intersects with their wealth.  How will adult children manage and preserve the family’s tangible and intangible assets?  What mentorship is required?  It will include documenting the wealth holder’s value systems and decision-making patterns and then sharing them with future generations.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.Page 58.
• “This management concept may cause some to contemplate whether to strive for the most trusted adviser role.  Being in this role does not mean you have to take phone calls 24 hours a day or be interrupted on a sailboat in the Bahamas.  It does mean that you must have a team in place to manage the intricacies and a high-level person who is accessible when you’re not available.  In the emerging-wealthy market, you will need a team that goes beyond an administrative or client service person.  In the high-wealth market, and as you move up the net worth spectrum, advisers will have to build out a real back office with a variety of technical and support people.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 58-59.
• “Advisers have seen similar pain in so many families; they quickly arrive at what looks like the best fix.  Not only did they fall short of a full diagnosis, they borrowed a diagnosis from the illness of a different family.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page59
• “Led by the most trusted adviser, the Core Team’s permanent roles cover four essential areas of competence:  tax management, legal management, investment management, and risk management. Core Team members must be willing to take comprehensive responsibility for their arena even when it means verbalizing a need they can’t personally fill and recommending the temporary addition of a specialist/ expert on the team.  They are each compensated according to their individual business models.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 79-80
• “The demand for the Intentional Team Model calls the bluff of the one-stop-shop.  In the affluent marketplace, the one-stop-shop will cease to be viable for four key reasons.  First, wealth holders have best-in-class expectations.  They have the business acumen to know that no single organization can maintain this level of talent in every discipline.  They recognize that top talent often feels stifled under the weight of bureaucracy and sets out to hang its own shingle.  Second, today’s wealth holder encounters the need for very specific solution providers.   There are so many intricacies to complex planning; a single organization can’t possibly house every facet under one roof in a financially viable business model.  Third, some of the wealth holder’s planning needs are temporary.  Third, some of the wealth holder’s planning needs are temporary.  It isn’t cost-effective, and therefore it isn’t likely that a single institution would house all of the expertise to address every facet of future planning- both known and unknown.  Last, every wealth holder has existing relationships.  In the smoke-and-mirror media barrage of today’s financial services marketplace, it is tough to relinquish the one known commodity in his or her planning- the trust he or she places in longstanding advisers.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 86
• “I have also come to realize that the key for any financial planner desiring to build and serve an affluent clientele is knowledge and credentials indicating that he/she has an appreciation and knowledge of the tools for philanthropy that can be helpful to more affluent prospects far more than most people realize.”  Remarks to The 2008 Annual Membership Meeting Society of Financial Service Professionals, Bethesda Country Club.  Bill Walace, CLU®, ChFC® JUNE 13, 2008
• “For the Washington DC area, it is estimated that 1.604 million estates will occur during the 55 year period from 2001 through 2055. These final estates will be valued at 1.260 trillion (2005 dollars) at the time of death if wealth grows in the area at an average rate of 2%. If historical patterns hold, $47 billion will be distributed in estate fees, $321 billion to the government, $169 billion to charity, and $723 billion to heirs. The $169 billion of potential charitable bequests constitutes 13% of the $1.260 trillion value of final estates. In a 4% growth scenario, $1.175 trillion or 25% of a total of $4.665 trillion at the time of death will go to charity. Finally, the study indicates that the 1.935 million households in the metropolitan area in 2001 will contribute $207 billion before their deaths and $169 billion in charitable bequests during the 55 yr period of simulation. WHAT AN OPPORTUNITY THIS REPRESENTS FOR EVERYONE IN THIS ROOM”  .”Remarks to The 2008 Annual Membership Meeting Society of Financial Service Professionals, Bethesda Country Club.  Bill Walace, CLU®, ChFC® JUNE 13, 2008
• Nearly one-third of HNW individuals (31%) indicate that they would be more likely to choose an advisor who is knowledgeable about charitable giving. More than half of advisors (57%) plan to increase their knowledge about philanthropy and to better their ability to advise clients about charitable giving. • Among advisors interested in becoming more proficient at rendering philanthropic advice, the areas they would most like to learn about are: developing a strategic giving plan (55%); understanding more about giving vehicles (50%); becoming better at integrating a client’s philanthropic values and goals into an overarching wealth management plan (46%); engaging the next generation in giving (45%), and the role that impact investing (or Socially Responsible Investing) plays in their clients’ philanthropic pursuits (38%).”THE U.S. TRUST STUDY OF THE PHILANTHROPIC CONVERSATION: Understanding advisor approaches and client expectations  OCTOBER 2013  Conducted in partnership with The Philanthropic Initiative (TPI)
• “Three out of four (74%) advisors say that discussing philanthropy with clients is good for their business for a variety of reasons, including that it: presents a more comprehensive and holistic approach to managing a client’s wealth (24%); demonstrates greater interest in their clients’ charitable goals and aspirations (18%); shows clients that they are interested in more than just their clients’ money (13%), and provides insights that help advisors better serve their clients (13%). Many advisors (75%) find discussing philanthropy with clients to be an excellent way to deepen relationships and establish new relationships (54%). Many HNW individuals (40%) agree that discussing philanthropy with an advisor has, in fact, deepened their relationship. More than half of advisors (56%) have also found that discussing philanthropy with clients has helped them build relationships with members of the client’s extended family – this proved most true among wealth/ financial advisors (64%).”  THE U.S. TRUST STUDY OF THE PHILANTHROPIC CONVERSATION: Understanding advisor approaches and client expectations  OCTOBER 2013  Conducted in partnership with The Philanthropic Initiative (TPI)
• “Advising work, especially when focused on philanthropy, is inherently psychological – it involves clarifying deeply-held personal values, identifying causes that might have personal meaning, and dealing with the complex human realities of families. Shaping a philanthropic strategy requires attention to such psychological complexities. It also requires support for choosing appropriate philanthropic instruments; and for connecting donors with knowledge and skill about philanthropy, nonprofits, and the community.”DONOR ADVISORS AND PHILANTHROPIC STRATEGY.Thomas E. Backer, PhD & Lilli Friedland, PhD.Human Interaction Research Institute
• If you would sell what John Smith buys, you must see through John Smith’s eyes.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?  By Scott Fithian and Todd Fithian.  Page XVI
•  “Advisers go into planning thinking the client is looking for a solution.  In reality, they’re not even sure what the problem is.  They’re simply overwhelmed with symptoms, a particular point of pain they want exorcised from their lives.  What they really need is clarity about what’s bugging them, why they want fixed, and why, so they can confidently select a solution.  They need help figuring out the shape of the hole before they can even consider what kind of peg will offer a snug fit.” Where do You Sit in the Minds of the Affluent?  By Scott Fithian and Todd Fithian.  Page 59
• “All too often today, I observe professionals who offer advice to their clients based, not on what their clients need for orderly long-term change to meet new conditions, but, rather, on a product which the professional has developed and wants to sell.  This conduct is the antithesis of the behavior of a true personne de confiance.  Families are in the business of overcoming the universal cultural proverb, shirtsleeves to shirtsleeves in three generations.  Given current demographics, it will take one hundred fifty years for three generations of a family to be born and die.  Thus, it will be one hundred and fifty years from now before anyone can know whether the family has overcome the first hurdle to its perpetual, never-ending war against the proverb.  A professional who wishes to be personne de confiance rather than a salesperson has to face this truth.”  A Reflection on the Nature and Practice of the Role of the Personne de Confiance in a System of Family Governance; Historically and Today.  By James E. Hughes, Jr., Esq.
• “In a way, we in the philanthropic advisory field have the privilege of being generous with other people’s money. If clients are to feel the joy of giving, we must feel it too. We set an example with our own giving, and in our own enthusiasm about it. We find the giver in the client by first finding the giver in ourselves. By the same token, when the client or donor does make a significant gift, we should take some personal satisfaction in that, some sense of pride. Donors and clients who make that big decision may feel a moment of doubt, or “giver’s remorse.” To have you as the advisor or gift planner delight in the gift, and to congratulate them on it, to celebrate it, may seem a small thing, but donors will appreciate it and remember it for a long time.”  A DONOR-FRIENDLY OVERVIEW OF CHARITABLE TOOLS.  Phil Cubeta, CLU, ChFC, MSFS, CAP, The Sallie B. and William B. Wallace Chair in Philanthropy at The American College.  Page 12
• “Let me show you how we work. Planning can be done above the line or below the line. Above-the-line planning is about the why of it all. Below the line, planning is about the how of it all. The world is full of experts who can tell you how. But they tend to assume they already know what you want to accomplish. They tend to assume that what you want to accomplish is what they are prepared and paid to provide. They tend to assume that one client is much like another and that the tools, plans, techniques, and boilerplate that works well for one client can be quickly repurposed for use with another. In reality, you are unique. Getting to know you and what you wish to accomplish and why you wish to get that accomplished is my strong point. I know the tools, techniques, and planning process, and when I do not have expert knowledge in a particular area I operate as a talent scout to find the relevant experts. But my strength is in getting to know you, and in helping you articulate the outcomes you want to achieve for yourself, those you love, and for the community, if you have aspirations in that direction. Most planners spend 80 percent or more of their time below the line. I spend 80 percent or more of my time above the line. They aspire to be experts in tools and plans. I aspire to be an expert in you and what you wish to accomplish.”  A CONCEPTUAL FRAMEWORK FOR PLANNING WITH PHILANTHROPIC TOOLS.Phil Cubeta, CLU, ChFC, MSFS, CAP, The Sallie B. and William B. Wallace Chair in Philanthropy at The American College
• “Above the line planning elicits vision, mission, values, goals, principles, fears, needs, concerns, and higher aspirations. Above-the-line planning, when it takes hold, often results in a story or narrative about who the client was, is, and wishes to become, or how the client wishes to be remembered. Below the line planning is a financial, tax, and legal science. It issues in financial projections, illustrations of particular tools, flow charts and diagrams, boilerplate explanations, scenarios testing financial options, and ultimately in a host of legal documents including wills, business agreement and trusts, including charitable trusts and foundations.”  A CONCEPTUAL FRAMEWORK FOR PLANNING WITH PHILANTHROPIC TOOLS.Phil Cubeta, CLU, ChFC, MSFS, CAP, The Sallie B. and William B. Wallace Chair in Philanthropy at The American College
• “Often clients are far more idealistic and interesting than you would ever know from reading their documents. It is a shame for the client and for society when a client’s highest aspirations die with them. To prevent, it is our responsibility to get the client to talk about what he or she most deeply wishes to accomplish, and then to line the planning up so it fulfills that mission.”  A CONCEPTUAL FRAMEWORK FOR PLANNING WITH PHILANTHROPIC TOOLS.Phil Cubeta, CLU, ChFC, MSFS, CAP, The Sallie B. and William B. Wallace Chair in Philanthropy at The American College
• “The CAP has to understand the “Tax and Tools,” but maybe the only person at the planning table trained to go beyond them to social impact and catalytic philanthropy. Then, the CAP works back and forth between personal finance and the levers for change that the client wishes to use. The CAP, of course, then makes sure that where financial and tax advantages are possible, those advantages are fully optimized. Is giving to a think tank deductible? How about lobbying? Litigation in the public interest?A movie company making films about corruption or injustice? Can a foundation (given the many rules about fiduciary responsibility) invest in a very high-risk start-up that funds a new drug? Should the donor wish to do a public service advertising campaign to start a nonprofit, or do the initiative under the wing of a nonprofit, so that the cost of the campaign would be tax-deductible? A CAP may be asked to research such issues.3 What drives the conversation of catalytic philanthropy is the relentless desire to change the world, by whatever levers are available, in line with the client’s goals, in the most efficient way possible. Welcome to the leading edge!” A CONCEPTUAL FRAMEWORK FOR PLANNING WITH PHILANTHROPIC TOOLS.Phil Cubeta, CLU, ChFC, MSFS, CAP, The Sallie B. and William B. Wallace Chair in Philanthropy at The American College
• “Example of Questions to Your Best Clients:  What has been the most positive aspect of planning you’ve done, either with my firm or another adviser?  What has been the most frustrating? How would you describe my role in your financial situation? Given what you know about me, what do you think I should do more of or less of in my business model?  What remaining doubts do you have about your wealth or its impact on your family? Where would you turn to resolve the doubts? If one thing could change about the complexity that wealth has created in your life, what would it be?”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?  By Scott Fithian and Todd Fithian.  Page 47
• “When wealth holders come into a relationship paying a fee that seems unbelievably small in relation to the work at hand or paying no fee at all, consider their mindset and commitment level.  They’re not agreeing to plan, they’re agreeing to test you. Why not stick a toe in and see how the water feels? What have they got to lose? On the other side of the table sits a professional who just agreed to do work for less than he or she is worth in the open market.  What emotion is the adviser bringing to the table? Fear? Lack of confidence? Consider the dynamic that was just created. The wealth holder has one eye casually on the diagnostics and the adviser is hooked up to an oxygen tank of financial fumes in hopes of a huge payday that is months or years away.  Two intelligent successful people have just engaged in a dysfunctional dance that may spin, dip, and twirl for months or years at a time.” The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?  By Scott Fithian and Todd Fithian.  Page 91
• “8-STEP FINANCIAL PLANNING PROCESS:  1. Establish and define the advisor-client relationship  2. Determine goals and gather data 3. Analyze and evaluate the current situation  4. Develop and present recommendations 5. Communicate recommendations 6. Implement the recommendations  7. Monitor the plan 8. Practice professionally”