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The Financial Planning Relationship

How to serve your clients properly and promote your business.

September 18, 2008
by Donna Wood, CPA/PFS

Financial planning is a relationship-driven business. A CPA who is also a Personal Financial Specialist has a unique ability to help clients because financial planning, tax planning and advisory services are interrelated. CPAs often short-change themselves by not promoting their ability to help clients in these areas. Those who can, will not only benefit their own businesses, but will benefit their clients as well.

Defining Your Clients

First, it is important to note that all clients are not your best clients. Personalities play a major part in the harmony of a relationship. It is wise to look over your client list and determine which ones are a good fit for your financial-planning services. As their CPA and trusted advisor, you may have information that points to your client's individual needs, such as: elderly parents, college-age children and estate planning issues. Use a phone call or conduct a meeting with your clients so you can address these needs through financial planning.

Defining Your Clients' Needs

Expectations should be openly discussed when considering a financial-planning relationship. What do your clients want from an advisory relationship? What are the fees and how are they charged? Transparency early on in the relationship will help build a foundation of trust and help manage expectations. It will also help prevent potential problems if everyone has a clear understanding of the basis for the services and relationship. As an advisor, you should try to determine through this initial conversation if these services are what your client is looking for.

During the initial planning meeting, use a great opening question such as, "What brings you to the table (to seek financial planning services)?" This encourages clients to speak about their concerns, current challenges and their goals. Listen carefully, ask clarifying questions and take notes during these information-gathering processes. Discovery and data gathering includes asking questions about what motivates your clients to take action for their future. At times the questions and answers may seem quite personal, and they should be, in order for you to gain the trust that comes with an advisory relationship.

As their advisor, you are helping your client plan for their future. This can entail making direct recommendations to change behaviors that will help them reach their goals.

Planning Process

In the planning process, providing custom and personalized information in the plan documents and recommendations serves to strengthen the relationship. Clients appreciate that you care enough to make reference to their specific goals and challenges in your recommendations. Honesty is also the best policy. If a plan is unrealistic, use that as an opportunity to educate your client. Develop a scenario with adjusted assumptions to provide a more realistic expectation of reaching their goals. For example, there is a delicate balance between assets, savings, spending and desired retirement age. If your client needs to save more, earn more on their assets, spend less or work longer, your honest assessment will help them to see their future more clearly. If your clients clearly understand what changes they need to make to get closer to their goal, they are more likely to implement your recommendations.

Follow Up

Once the plan is delivered, it is critical to follow up with your clients to help them stay focused on the implementation steps. Check in regularly to show that you haven't forgotten your advisory role of helping them achieve their goals. Being able to check off the "to do" list will enhance the relationship.

Stay in touch with your clients throughout the year. Advisory relationships provide the groundwork for regular communication on tax planning, decisions on long-term care, strategy on retirement and education savings and other ongoing concerns. These communications can be timed to coincide with tax planning and impending retirement contribution deadlines. Sending personal birthday cards are another way to show your clients that you are thinking about them. More than ever, your clients want to hear from you in today's turbulent times. Many clients move away from their planners in times such as these simply because they haven't received a letter or phone call. Keeping in touch with your clients at least six times a year will keep you in their minds as they deal with issues that involve planning.

A good financial planning practice is built on trust. Clients respond positively when you make the effort to know them and their goals, and help them work toward achieving them. The trusted advisor and client will both benefit from the relationship and happy clients are one of the best referral sources.

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Donna Wood, CPA/PFS, CFP, at Wood Smith Advisors, specializes in financial planning and investment advisory services, focusing on life financial planning for entrepreneurs and women. She brings more than 30 years’ experience in business management, financial planning and financial consulting to her clients. Wood has earned a certificate from the American College on Special Needs Financial Planning and received her BBA from the University of Michigan. Wood’s work experience includes KPMG. She has held finance, administration and executive management positions in Fortune 500, mid-size and startup companies. Wood is Past President of the Executive Women's Golf Association's DC Metro Chapter and currently serves on the Board of Breast Cancer Network of Strength, Mid-Atlantic region. She is also a member of the American Institute of CPA's (AICPA) Personal Financial Planning section and the Financial Planning Association (FPA).