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ArticlesLIFESTYLE PLANNER or FINANCIAL ADVISERBy Ian Hutchinson
This article was published in Money Management newspaper
There is a growing recognition of the role of financial planners as lifestyle planners or strategists in helping clients achieve their lifetime goals, rather than simply achieving an investment return. Yet financial advisors are poorly prepared for the challenge of helping clients focus on their lifetime goals. It is estimated that only 2 per cent of financial advisors have a thorough and comprehensive lifestyle planning approach that is holistic and meets the needs of clients. The focus in the financial planning industry continues to be more on short-term investment returns and less on understanding the lifetime goals of clients. In this respect, our industry is failing clients. Unless we educate clients to understand and define what they really want from life in retirement and how they will expect to live, a significant proportion of client will face retirement with uncertainty and fear. These clients may well have a nest egg but how will they spend it to ensure their happiness? How will this nest egg enrich their new life in retirement? Clients may well as they advisor at retirement day: what was the point of that great financial plan if I didn't reach the lifestyle goal that it was all designed for? Financial advisors can't assume that clients have control of their future lifestyle expectations. The onus is clearly on planners to help clients define and visualise what they want out of their life as a result of having a good financial plan. Studies have shown that retirement is the 11th most stressful even in a person's life. Some studies also indicate a link between retirement and death, suggesting many people can't see a quality-enriched life or reason for living beyond retirement. Most retirees have never been taught how this time of life change will affect their well-being and so few are adequately prepared for the challenge. Few financial planning groups have turned the advice process on its head to reflect the client's world view by first asking clients how they would like to live in the future, specifically and then, what financial strategy would they need to do get there reliably. Financial advisors have a unique opportunity to be truly influential in the success of their clients' lives. But to be effective lifestyle strategists, financial advisors need to start thinking and acting like coaches in life for their clients. Financial advisors have a major responsibility to encourage their clients to stick to a clearly agreed strategy that has built-in flexibility and will get clients to their life goals at an acceptable level of risk. Advisers should be the guides on this financial journey, with comprehensive lifestyle planning being the important first stage. Seeing the goal that they work towards is at least equally important for clients as the investment performance numbers each month or each year. As a lifestyle strategist, the advisor's challenge is to keep people focused in the end goals - the happiest lifestyle possible. This will be no easy task when the sharemarket is booming and clients are continually bombarded with the latest financial products. Financial advisers will need to be courageous and resilient in keeping clients in track in this environment. Ian Hutchinson (G.Dip.Psy, B.Bus, APS), Founder of Life by Design®, has built a reputation as Australia's leading lifestyle strategist. He has studied overseas with some of the world's leaders in lifestyle planning, and his lifestyle strategy work has been profiled throughout the media. His entertaining presentations are in demand throughout the world including Europe and the Middle East. Life by Design® can be contacted by phone on (02) 9979 4949, or visit www.lifebydesign.com.au. For permission to reproduce this article article in whole or
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