Financial Planning

Financial Empowerment Retreat for Women

Posted by on January 16, 2010 in Financial Planning, Financial Therapy | 0 comments

Happy New Year!

We all know that 2009 was a financially challenging year. As with all challenges, some good has resulted from the trial. I’ve noticed that more people are now motivated to get a handle on their personal finances, to make wiser decisions, and to choose options that are in line with their values and priorities.

Paul Lemon, CPA/PFS, CFP(R) and I are teaming up to offer an amazingly priced Financial Empowerment Retreat for Women in Durango, Colorado Feb. 4 – 7. ($395, which includes accommodations and meals!) It’s our way of helping folks learn how to better manage their lives by managing their finances. We kept the cost low so that those who want to attend can afford to attend.

We’ll cover the practical how-to’s of personal finance and explore and enhance our relationships with money – so that we not only know what to do, but are also equipped to be able to do it.

Please go to to learn more and pass this along to others who could benefit from this exciting opportunity.

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Why Being Satisfactory is Not Enough – An Invitation to Be Distinctive

Posted by on October 12, 2009 in Family Wealth, Financial Planning | 0 comments

According to a Prince & Associates survey, there is a disconnect between the value financial advisors believe they provide clients and the value high net-worth clients believe they receive. That is, while advisors tend to believe they offer high-value service, clients are not so sure. And, even those who are “satisfied” are not likely to remain loyal.

Survey respondents who rated themselves as “satisfied” indicated they are not likely to recommend the advisor to their friends, may reduce their positions with the advisor, and may leave the advisor. Nearly one-third of those “moderately satisfied” or “satisfied” were “very” or “extremely” likely to leave their primary financial advisor within the next year.

“Highly committed” clients are 12 times more likely than “lower committed” clients to transfer new assets to an advisor’s care and 5 times more likely to recommend their advisor to family or friends (J.D. Power & Associates).

On average, moderately satisfied clients added $17,000 in managed assets per year; satisfied clients added $23,000. Loyal clients added an average of $376,000 in additional managed assets (Russ Alan Prince).

In the highly competitive field of financial services, being satisfactory is just not enough.

So what are high net-worth clients looking for? According to Prince & Associates, they are looking for a “true wealth manager” who can provide comprehensive financial services and products, including tax and estate planning services.

Another survey by Prince & Associates also highlights the importance of estate planning. Almost 80% of “middle-class millionaires” tagged providing for heirs as a primary concern, while 94% of respondents with $3 million – 10 million in financial assets ranked heirs as a top priority. Surprisingly, the estate plans for the majority of these same respondents are out of date.

In addition to skill and knowledge, the advisor – client relationship is key. It’s simply impossible to provide high quality personalized service to a client you do not know and stay in contact with.

So now I ask you – what sets you apart from your competitors? What services or manner of service do you offer that distinguishes you from the crowd? What makes you remarkable or exceptional?

I’d really like to know, because I am assembling a team of financial and legal professionals with whom to collaborate – to provide exceptional service and thus garner the loyalty of highly satisfied high net-worth clients, who will gladly tell others about the tremendous value they receive as a result of this unique collaboration.

Just what does that mean and look like? Contact me, and we’ll discuss options and opportunities – including a live demonstration of a client retreat, a family meeting, and more!

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Posted by on October 3, 2009 in Financial Planning, Readings | 0 comments

I recently began reading Your Money & Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich by Jason Zweig. For warm-ups, he gives examples of how knowing better doesn’t mean we’ll do better and runs down some basic lessons we’ve learned as the field of neuroeconomics has progressed.

My favorite “case study” was that of Harry M. Markowitz, the “father” of Modern Portfolio Theory and winner of a Nobel Prize in economics (1990), who was unable to apply the mathematical breakthrough he’d helped discover to his own investment portfolio. Instead, in the 1950’s, he chose to invest 50% of his retirement savings in stocks and the other 50% in bonds. Markowitz said, “I should have computed the historical co-variances of the asset classes and drawn an efficient frontier. Instead, I visualized my grief if the stock market went way up and I wasn’t in it – or if it went way down and I was completely in it. My intention was to minimize my future regret.”

Markowitz’s sentiment was echoed by another Nobel Prize winner, Daniel Kahneman (the first psychologist to win a Nobel Prize in economics), who said, “Financial decision-making is not necessarily about money. It’s also about intangible motives like avoiding regret or achieving pride.”

So what does the research show? So far, here is some of what we’ve learned through the study of neuroeconomics:

  • Monetary gains and losses create a biological change, which can profoundly affect the body and the brain.
  • The neural activity of someone making money on their investments is indistinguishable from that of someone high on cocaine or morphine.
  • After a stimulus, such as an uptick in the price of a stock, is repeated twice, the brain “automatically, unconsciously, and uncontrollably” expects a third recurrence.
  • Once someone presumes that investment returns are predictable, their brain will respond in alarm when that presumed pattern is broken.
  • Financial losses and mortal danger are processed in the same areas of the brain.
  • “Anticipating a gain, and actually receiving it, are expressed in entirely different ways in the brain, helping to explain why ‘money does not buy happiness’.”
  • “Expecting both good and bad events is often more intense than experiencing them.”
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Wealth Transfer – Planning for Success

Posted by on September 27, 2009 in Family Wealth, Financial Planning, Readings | 0 comments

Over the next 50 years, 50-100 trillion dollars will be transferred to successive generations. Approximately 80% of all transfers will fail by the 3rd generation.

According to a study in Williams and Preisser’s “Preparing Heirs” only 15% of estate / wealth transition failures were due to the what’s (i.e., legal and technical issues). The remaining 85% were result of the how’s (i.e., breakdowns of communication and trust, lack of family developed missions, and inadequate preparation of heirs). In fact, open communication and beneficiary preparation were the two factors that distinguished the successful 30% from the failed 70%.

Under the traditional estate planning paradigm, the primary considerations are tax minimization, asset protection, and probate avoidance. Estate documents are drafted in such a manner that if the first and the last pages were removed, no one could tell to whom they belong. Trust names most often reflect the tax purpose and the grantor’s surname. Yet none of these speak to the above determinants of success: communication and preparation.

And what about the family’s priceless intangibles: their human and intellectual assets? How are these planned for in traditional estate planning? Simple answer: They’re not.

Fortunately, there are other options.

One such option is the Purposeful TrustTM, created by John A. Warnick and Scott Farnsworth.

The following is from their How to Build a Purposeful Trust Practice brochure.

It Starts with a Purposeful Conversation™

Given an opportunity, most clients are interested in deeper conversations around the impact of their wealth on their children, grandchildren, and favorite causes. They want to discus the “How much is enough?” and “How much is too much?” questions. They want to know how to pass on more than money. They want their wealth to be a blessing to those they love and not a crip­pling handicap.

Purposeful Conversations provide a simple, enjoyable, and gratifying process for helping clients think deeply about the significant issues underlying their most important estate planning deci­sions. From their answers, we can discern the real purposes behind their planning and we can glean the words to express their purposes, hopes, and dreams to trustees and beneficiaries. The clients’ own words and stories are the best source for the name of the trust, for the lessons and wisdom that should inform trust decision, and for the bedrock principles that should guide the trust through uncharted waters. With their words and their stories in hand, we’re prepared to start creating Purposeful Trusts.

The Seven Secrets of Purposeful Trust Planning

We have discovered the seven keys that open the door to a beautiful and meaningful new world of planning for us and our clients.

Secret #1: Focus—The estate planning process is robust and engaging when it focuses primarily on the clients’ deepest hopes, dreams, and purposes.

Secret #2: Purpose—The trust itself is infused with life and energy when the clients’ own words are used to express the rich human purposes of the trust.

Secret # 3: Name—The clients’ name for the trust can be a succinct and powerful expression of their fondest hopes and dreams for the trust and its beneficiaries.

Secret #4: Guidance—Directions based on the clients’ wisdom and life-lessons and written in the clients’ own words can guide the trust to achieve its grandest purposes.

Secret #5: Heirlooms—When a gift of tangible personal property includes the cli­ents’ story and the item’s background, it turns an object into a priceless treasure.

Secret #6: Gratitude—Expressions of appreciation and an attitude of gratitude in givers and receivers can turn transfers into gifts and financial riches into true wealth.

Secret #7: Principles—Statements of the clients’ guiding bedrock principles can provide pole star and compass in navigating the trust through an unpredictable future.

How might you begin to capture The Purpose of your clients’ estate plans?

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Filling from the Fount of a Fire Hydrant

Posted by on September 21, 2009 in Family Wealth, Financial Planning | 0 comments

Last week I learned that approximately 80% of all wealth transfers fail by the 3rd generation. Why? Because financial and estate planning typically start with the method instead of the purpose.

At the Masters Level Intensive on Purposeful PlanningTM, I learned that there is another way. It’s the way I was looking for, but did not know existed, back when I was a financial advisor. It’s an approach that truly lets the money follow the life and not the other way around.

My brain is still marinating in all the information received. It was an awesome and inspiring week. Over the next few weeks, I will be highlighting insights and information from the Intensive, and asking you – are you ready? “The questions are coming.”

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A Lifestyle of Retirement

Posted by on August 31, 2009 in Financial Planning, Musings | 0 comments

What if retirement were closer than you think? How might such a realization change your day-to-day mood, choices, or priorities?

According to financial advisor Kent Thune’s definition of retirement, he is already retired. And according to my own definition, I am much closer than I ever thought. (See Born at Starbucks) This realization got me thinking…

What if retirement were a lifestyle instead of a season or point in time? Instead of pie in the sky just before you die, it’s steak on your plate while you wait?

What if more of us sought to incorporate into today or the near future those characteristics of life that we thought we had to wait another 10, 20, 30, or more years to enjoy?

If you realized today that you are or could soon be “retired” (according to your own personal definition), what difference would that make?

In what ways would that free you?

And – what changes might you realistically be able to make – today or in the near future – to make this more of a reality?

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How We Know What Isn’t So

Posted by on August 24, 2009 in Financial Planning, Readings | 0 comments

Several years ago, a colleague recommended to me How We Know What Isn’t So: The Fallibility of Human Reason in Everyday Life by Thomas Gilovich. He said it explores present-day myths that persist despite scientific evidence to the contrary. I haven’t yet read the book, but I was so intrigued by the concept, that it’s stuck with me and become a tool I use to check my own thoughts and assumptions.

How do we know what isn’t so?

I used to think I wanted to live the “corporate lifestyle.” My first clue to the contrary was in grad school. I was applying for positions with the Big 5 accounting firms, and a professor told me that one day I’d be paying someone to pick up my dry cleaning, do my grocery shopping, cooking, etc. She said it as if this was a desirable inevitability, but to me it wasn’t. I didn’t want to be working so much that I didn’t have time to pick out my own fruits and vegetables or enjoy some of the simple pleasures of life. And yet, I accepted the offer of my dream job with a Big 5 firm in Charlotte.

Sometimes we have to live the dream to realize it’s not our true desire. What had I been hoping the corporate lifestyle would bring me? What was it I had been searching for in a way that missed the mark? What different choice might I have made if my true desires had been more clear to me?

It is “imperative that you and your clients understand … their underlying motives for the significant financial decisions of their lives. Without this understanding, your work could be based on faulty logic.” ~ Courtney Pullen

So I ask you …

How do you assist your clients in determining their financial goals?

How do you help them evaluate whether or not their stated goals are their true authentic goals?

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Born at Starbucks

Posted by on August 10, 2009 in Financial Planning, Musings | 1 comment

Starbucks Coffee Chat

The inspiration for this forum was born out a of discussion at Starbucks. It was the first time I’d met financial planner Kent Thune, and we were discussing our thoughts on the “softer side” or “interior” of financial planning.

Specifically, we were discussing the need to have clients clarify what they mean by “retirement.” What does that look like? What type of lifestyle do you want to lead? How active will you be? Where will you be living? What will you be doing?

Kent shared his definition of retirement and then followed up with – “So according to my definition of retirement, I am already retired.”

Wow. “Already retired.” What a concept.

For at least a month, I tried to come up with my own definition of retirement. But what I kept coming back to was Kent’s – “Doing whatever I want, whenever I want – within reason.” I’ve not been able to find one that fits my view of my retirement any better than that, as my idea of retirement is a season of meaningful, directed activity. Granted, to be practical, that idea would need to be clarified from time to time – to move it from the abstract to the concrete. But as a starting point, it works for me.

So how about you — What is your definition of retirement?

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