It’s a safe bet there’ll be a few delegates at the FPA conference this year that will scoff at the inclusion of a value-based financial planning session on the program.
Most planners, after all, could be forgiven for believing they are already practising value-based financial planning as a matter of course.
It’s not uncommon for planners to mistake holding ethical values for practising value-based financial planning, according to Enrich Australia directors Tim Hardy and Mandy Lamkin, who will jointly make the presentation.
The key difference is that there are potential commercial advantages to applying value-based financial planning to the client/financial planner relationship, Hardy says.
These include improving a planner’s chances of winning over potential clients, being able to offer additional services to clients, and increasing the potential for referrals.
The process is essentially about “increasing a planner’s skills in relating to their clients in order to build an intimacy with them and hence trust and loyalty”, Hardy says.
“Learning how to use value-based financial planning begins with planners working through a values-profiling process to discover the role personal values play in their own lives.”
As a coaching consultant, Enrich Australia then shows planners how to “apply this process confidently to get their clients to articulate their personal values”.
Hardy explains: “Discussing personal values with a client quickly builds their trust in your intentions by getting across the message that they mean more to you than their money. In turn, gaining your client’s trust enables you to coach the client to be more inspired and motivated towards financial planning, and more open to its potential.
“The process effectively equips planners with the necessary tools to bring their clients to full awareness of what their money can do.”
Many planners believe they “sit naturally with the idea of value-based financial planning, but the truth is that the process has largely to be taught”, according to Lamkin.
She adds that “by and large planners feel they already know their clients well enough not to embrace the values-based financial planning”.
“For example, planners often think that after a two-hour interview with clients they pretty much knows what makes them tick.
“However, my reasoning is that if you have to spend two hours with a client to get to that level, you are in need of a more efficient method.”
According to Lamkin, “the better way is about planners using coaching competencies learned through specialised training”.
