I was only last week involved in a discussion about lifestyle financial planning, and how many more financial advisers have jumped on board this bandwagon without really having the necessary skills to make progress on the work that they had started.
It appears that having sold the idea of cash flow planning to a client who is then suitably impressed, the adviser tends to think the work is done.
The discussion revealed many advisers seem to lack the necessary experience and skills to characterise their relationship with the client. In particular, the execution of soft skills, which are necessary for lifestyle financial planning, are often not refined.
By soft skills I mean: communication, observation, decision-making, problem solving, negotiating and influencing.
This expertise and these skills do not come easily and need constant practice so that as tools they are used effectively.The soft skills make a vital contribution to the client/adviser relationship, where in essence the focus is on the client’s lifestyle and how they want to live their life.
To my mind, a good financial planner must have the ability to plan creatively on an ongoing basis. They should be able to recognise and understand what their clients are really telling them.
They must have the ability to observe and recognise what is important to the client in emotional and monetary terms, and there has to be a genuine interest in the client, their family and what they are trying to achieve.
Good communication is essential to this process and there has to be an understanding between individuals for it to be effective. As part of the conversation, listening is arguably the most important ingredient, but there is a massive difference between passive and active listening.
What some people do not seem to realise is that active listening helps people to articulate what they really mean, and the listener can hear both content and feelings and respond appropriately. Both verbal and non-verbal cues can be noted, restated or reframed so the client can verify that they have been have properly understood.
This expertise and these skills do not come easily and need constant practice so that as tools they are used effectively. Only this way will people manage true financial planning and help their clients achieve personal and financial success over time.
Marlene Outrim is managing director of Uniq Family Wealth
