UNDERSTANDING AND IMPLEMENTING
CLIENTS’ NEEDS

Apart from being a good communicator and listener, a good financial advisor should be well-equipped with a comprehensive understanding of various products and is able to match them appropriately to the diverse needs of each client.

It is difficult to address an issue unless its parameters and context are fully understood. That is true in most areas and is absolutely critical in relation to planning for the future of clients and their families. Without a full understanding, it is really guesswork and random luck when a proposal that is implemented achieves its desired results.

What are we trying to focus on for our clients? First of all, clients generally need to have a goal, a plan – an aim that they are trying to achieve. As mentioned for the umpteenth time before (and it still resonates because it has not been resolved rigorously): “A failure to plan is a plan to fail”.

What is the basis for a plan? It must be the ‘bridge’ between where we are and where we want to be. That is the only way of ensuring that our efforts are properly focused. What could a client want to achieve? If it relates to the success that has been created, it should involve and revolve around three dimensions – control, ownership and access to benefits. These aspects will provide the framework within which specific elements can be considered and evaluated.

Knowing what a client wants is part of the process. It is still necessary to identify a workable solution (workable to mean value for money and easily comprehensible). This element must be considered from the client’s perspective. A perfect plan that the client cannot understand and work with is very unlikely to provide the ‘peace of mind’ that a good solution should engender. Even though attaining ‘peace of mind’ might be the ultimate goal, it may still be too vague because that ‘peace’ depends on the clients and the realisation of their goals and aspirations.

If we understand the dimensions and the process, combining these two aspects should further reduce the likelihood of error or oversight. See Diagram 1 for a graphic representation of the plan.

What are the key words that assist in aligning the dimensions and allow one to narrow in on the subjective perspectives of the client? The ‘magic’ group is otherwise known as the 5Ws:

¦ Who (parties involved, the object of the plan and who is to know);
¦ What (the subject of the plan and what information should be disseminated);
¦ Where (the existence of any geographic imperatives, issues or limits);
¦ When (the time frame within which one wants to make the plan operational and effective), is there a limit;
¦ Why (the difficult word that focuses on meeting the clients’ needs rather than the advisors’ needs).

These clients’ needs can be considered and perhaps, viewed in a way similar to those found in the ‘Abraham Maslow Hierarchy’. It is important to note that any level in that hierarchy may be relevant. Once the 5Ws have been reviewed and discussed, we can focus on the other simple driver – How. This is the method for designing the plan itself.

Can we do it all by ourselves? It would be nice (and very effi cient) but it is unlikely to happen in a complex world. So on the implementation side, we need to identify the gaps and fi ll them with qualifi ed support. The entire team would be addressed by the ‘Who’ element. The team members should cover legal, accounting and asset management, with an emphasis on all of the skills possessed by a CERTIFIED FINANCIAL PLANNER™.

Applying the 5Ws helps the client to envision the future that they would like to have. Since we are aware of the client’s current position, we can map out where the client is and conclude on the position that the client would like to be.

Again, it is most likely to be an iterative process. The iterations might come early, at the prototype or preliminary design phase. Alternatively, when there is a regular review of the plans (not necessarily in conjunction with every review of the plan’s performance), we have to be aware of the possibility of improvement. Here, improvement relates solely to alignment of the plan with the client’s needs. A separate quote of part might emphasise the client focus – when there is a regular review of the plans, we have to be aware of the possibility of improvement in the plan’s alignment with the client’s needs.

There are three dimensions which are held together by information flows. This is an integral part of the overall plan and constitutes what information flows to whom, when and why. The ‘where’ might be relevant in relation to storage, security and confidentiality issues. As we are attempting to design the future, another possible impact could arise in relation to the motivation or involvement (buy-in) of some of the objects (involving the ‘who’ element). A useful role with real responsibilities is a concrete way of measuring this element. If that is not enough to generate passion and alignment, there are serious participation issues involved.

The ownership dimension will often directly aff ect feasibility and it is here that there may be the most diffi cult (from a technical perspective) trade off s that need to be considered. This may arise initially as the technical realisation of the design is evaluated (together with attendant costs, the value-add or cost/ benefi t evaluation takes place here). Alternatively, the environment may change. The changes can be brought about by legal changes, economic (business environment) changes, mobility of participants or other aspects. That is why a regular review of needs as well as an alignment of the solution to the needs and goals is essential. What was essentially deemed as ‘perfect’ may remain useful or could actually become detrimental. The only way to keep track of this is by conducting an ongoing review.

It sounds like it should be very complex and costly. Some solutions might be because they address complex situations. There must be a congruence between the complexity of the situation and solution. Complexity for its own sake helps to ensure that the solution will neither be understood nor usable, nor accepted nor implemented.

One should also resist the temptation of being reliant on an existing solution. Although there may be restructuring costs (which need to be measured against the risks which have been identified), failure to change may create an extremely volatile or even toxic situation. There are no viable solutions that do not involve alignment with client needs. Understanding those needs and then carrying out the strategic mapping to the desired future situation is what enables us to know that we are achieving ‘client-focused’ goals as competent advisors. At the end of the day, this would give everyone ‘peace of mind’.