The Treasure Within how to uncover what matters most

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The Treasure Within how to uncover what matters
most Justin Hooper CFP RLP
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88 of clients want an adviser who really
understands what is important to them Source The
New Retirement Mindscapes Ameriprise 2006
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1. Research Communication Issues in Life Planning
- Defining key factors in developing successful
planner-client relationships
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2. Goals
Identify and statistically validate specific
communication topics, tasks, and skills that
contribute to building client trust and
commitment in the context of a professional
financial planning relationship
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Definitions of Terms
Client trust The belief of the financial
planning client that the financial planner can be
relied on to behave in such a manner that the
long-term interest of the financial planning
client will be served.
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Definitions of Terms
Client commitment The intent and assurance of a
financial planning client (implicitly and
explicitly expressed) to have a ongoing
relationship with his or her current financial
planner.
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Definitions of Terms

• Life Planning
• Focus on the true values and motivations in their
  lives
• Determine the goals and objectives they have as
  they see their lives develop, and
• Use these values, motivations, goals and
  objectives to guide that planning process and
  provide a framework for making choices and
  decisions in life that have financial and
  non-financial implications or consequences.

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6 important indicators of successful
planner-client relationships

• Client retention
• Client satisfaction with planner-client
  relationship
• Client cooperation with financial planning
  recommendations
• Client openness in disclosing financial
  information
• Client openness in disclosing personal
  information
• Client referrals

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Participant Profiles
554 usable planner surveys 128 usable client
surveys
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Planner Age
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Education Level of Planner Participants
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Years Have Worked as Financial Planner
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Professional Designations
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Number of Clients
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Client Age Designation
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Client Education Level
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Client Occupation
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Client Annual Household Income
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Proportion Worked With Other Financial Planners
Past 5 Years
Length of Time With Current Financial Planner
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Conclusions
Clients who strongly agreed versus agreed with
the statement I believe it is important for my
financial planner to consider all areas of my
life when creating a financial plan for me were
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Conclusions

• 2.2 times more likely to strongly agree that they
  have no interest in transferring to a different
  planner (client retention)
• Nearly 1.7 times more likely to indicate being
  very satisfied with the relationship they have
  with their financial planners (client
  satisfaction)
• 26 times more likely to strongly agree they fully
  cooperate with their planners by following
  through on all financial planning recommendations
  (client cooperation)

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Conclusions

• Nearly 2.3 times more likely to strongly agree
  they feel completely open to disclosing financial
  information to their individual financial
  planners (client openness/financial)
• 2.2 times more likely to strongly agree that they
  are open to sharing personal goals, needs and
  priorities with their individual financial
  planners ( client openness/personal)
• Nearly 3.9 times more likely to strongly agree
  that they frequently recommend their individual
  financial planners to others (client referrals)

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The privilege of a lifetime is being who you
are. Joseph Campbell
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The privilege of a lifetime is finding and
being who you are.
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Spirituality vs Materialism
Crisis of duality
Purpose
Crisis of meaning
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What assumptions am I making that I dont know
Im making?
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Money Scripts are
.. from primary areas of socialisation .. often
unexamined .. generational .. contextual ..
automatic and involuntary .. reinforced .. likely
to limit our choices .. powerful could be
keeping you financially, emotionally or
spiritually poor!!
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Top 10 Money Scripts

• More money will make things better
• Money is bad
• I dont deserve money
• I dont deserve to spend money
• There will never be enough money
• There will always be enough money
• Money is not important
• Money makes the world go round
• Its not nice to talk about money
• If youre a good person, the universe will
  supply all your needs

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Contemplating the future - deep motivators

• Do you sometimes feel
• You havent done as well as you think you
  should have?
• Envious of someone elses financial
  situation?
• Tied to something, someone or somewhere because
  of money?
• You are sacrificing some part of yourself
  because of money?

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Deep Motivators

• Originate (from self)
• Profoundly important.to you
• Realistic
• Characterised by patience
• Includes benefits to others

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Instead of pain what do you WANT?
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To achieve that, what qualities do you need
for yourself or from others?
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Exercise Deep Motivators
Imagine a life in which money is no constraint.
You have enough money to do, have or be whatever
you desire. What would your life actually be
like under such a situation? How would it change?
What would you do? Let yourself go and describe
what your life would be like in that situation.
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Exercise 2 Deep Motivators
You go to the doctor for a regular medical
check-up. The doctor emerges from his office with
a serious look on his face and informs you that
you have a very rare but terminal disease and
unfortunately its in its final stages. You have
24 hours to live. The question is HOW DO YOU
FEEL? Dont think about what you may do in the
24 hours focus on your feelings. What will you
have to leave incomplete? What would you like to
have done, who did you want to be, what did you
want to change? What will you miss?
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Deep Motivators
Career To do good meaningful work Water
Experience Soul sailingIts the closest thing
Ive come to spirituality Financial Security
Organisation Im sick and tired of living hand
to mouth
Children / Parenting To be the father I never
had Adventure Live a life less
ordinary Relationship Feed each others soul
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Goals Objectives Table
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Integrated planning
1.Explore the past 2.Understand the
present 3.Contemplate the future
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Integrated Wealth Planning
Interior Exterior Future
(Possibilities) Present (Practical)
Past (problem)
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Integrated Wealth Planning
Interior Exterior Future
(Possibilities) Present (Practical)
Past (problem)

• Dreams
• Deep motivators
• Consciousness
• Authentic goals
• Authenticity
• Clarity
• Abundance
• Awareness
• Beliefs
• Emotions
• Stories
• Sub-consciousness

• Retirement
• Projections
• Estate planning
• Stated goals Objectives
• Balance sheet
• Cash flow
• Statements
• Insurance
• Historical
• Financial data
• Tax returns

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The Seantos ProcessTM
Best Fit
Visioning
Strategic Pathways
Design The Plan
Implementation Project Management
Renewal
1.
2.
3.
4.
5.
6.

• Awakening
• Affordability
• Urgency
• Long-term

• Strategies
• Products
• Action Plan Timeline
• Costs
• Benefits

• Scenario Planning
• Cash Flows
• Conscious Choices

• Money Scripts
• Life Legacy Aspirations
• Goals
• Wealth Snapshot
• Define Scope of engagement

• Cash Flow
• Risk Management
• Intelligent Investors Framework
• Legacy Aspirations Program
• Philanthropy
• Getting Organised
• Debt Structuring
• Asset Ownership

• Cycle

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The Treasure Within how to uncover what matters
most Patrick Canion CFP MAppFin
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Knowing our clients, knowing our products

• Know your client, know your product
• Legally we are all financial product advisers
• All we do is intend to influence persons to make
  decisions about financial products - apparently
• We change lives when we help people understand
  themselves
• put the law in their minds and write in on their
  hearts

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More than just products...
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Knowing me, knowing you

• Wealth creation is far more dependent upon
  investor behaviour than fund or asset performance
• We are our own worst enemy because we are
  genetically hedonistic, not capitalistic
• Understanding this is the first step in
  overcoming this

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Our very own time machine
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Myopic Loss Aversion

• Short sighted behaviour seeking to avoid loss
• Investors hate the way a loss makes them feel
  even more than the loss itself
• Pain of loss is felt 2.5 times more than the
  pleasure of a gain of the same magnitude

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Avoiding loss at what price?
Net funds Flow
ASX 200 Price Index
Australian Equity
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Gun to the Head

• Please choose

(a) Accept a sure loss of 7,500
(b) Taking a chance where there is a 75 chance
you will lose 10,000 and a 25 chance you will
lose nothing
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Hyperbolic Time Distortion
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Hyperbolic Time Distortion
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Hyperbolic Time Distortion
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What is time?
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Anchoring
Is the population of Turkey greater than 35
million?
Whats your best estimate of Turkeys population?
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Anchoring and Overconfidence

• The Dow Jones Industrial Average closed 1998 at
  9181.

The Dow Jones Industrial Average started in 1896
with a value of 40
Redefining the DJIA as an accumulation index,
what was its closing value in 1998?
In addition to your best guess, what is a low
guess and a high guess feel 90 confident that
the true answer will lie between these 2 numbers.
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Anchoring

• 652,230

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I was Framed!

• People s behaviour depends on the way that their
  decisions and problems are presented to them
  how they are framed
• Mental accounting means that we prefer some
  frames to others
• Dividends versus capital

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Concurrent Decision

• First Decision Choose
• A a sure gain of 2,400, or
• B a 25 chance to gain 10,000 and a 75 chance
  to gain 0
• Second Decision Choose
• C a sure loss of 7,500, or
• D a 75 chance to lose 10,000 and a 25 chance
  to lose 0

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Concurrent Decision

• Choose A D Outcome
• 25 chance of winning 2,400 and a 75 chance of
  losing 7,600
• Choose B C Outcome
• 25 chance of winning 2,500 and a 75 chance of
  losing 7,500
• Concurrent decisions can make frames opaque

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Frames and Risk Tolerance

• Choose
• Guaranteed win of 1,500
• Toss a coin. Heads means you get 1,950, tails
  means you get 1,050
• Whats your choice?

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Frames and Risk Tolerance

• Choose
• Guaranteed loss of 750
• Toss a coin. Heads means you lose 525, tails
  means you lose975
• Whats your choice?

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The Next Wave
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The Next Wave

• The new normal
• Know why you exist
• Bolster your talent
• Discipline and preparation

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The Next Wave

• What can we do to not only
• survive, but turn this time into a
• defining point in history?
• Jim Collins