Talking budget and the right questions to ask

Budget therapy

The foundation of any sound financial decision is a cash-flow analysis. Some clients tell us they don’t have a budget, that it is in their head, they have enough income or their budget is their checkbook balance. This is not sound thinking, so our first role is to educate on the merits of creating a budget.

Their homework is to take out their last six to 12 months of check registers, online statements and credit card statements. We ask them to look at each expenditure and categorize them. We provide a ready-made spreadsheet, and our planning software has an online version they can also use. We tell them that regular recurring expenditures like mortgage payments or electric bills will be easy to spot and record. The really meaningful numbers will be the discretional dollars that flow out each month, like ATM withdrawals. The power of this process lies in what the educational counseling world calls “reality therapy.”

It leads them to build a budget, maybe for the first time in their lives.

It helps them to see where they can reduce their spending if they have an objective goal to save for retirement or anything else.

The client appreciates us for helping them make good decisions, and they are more disposed to invest savings with us and complete other financial planning goals like procuring life insurance.

—Thomas F. Levasseur, CLU, MS Ed, Dover, New Hampshire, USA, 35-year MDRT member

The right phrase for the right age

Different age groups respond more favorably to different communication styles about financial advice. With older clients, who have more life experience, I take a more respectful approach. I might use phrases like “as you know” or “from your experience” to acknowledge their wisdom. For younger clients, I use a more informative and guiding role. I provide them with advice and recommendations using phrases like “Most clients like you find this helpful” or “It is highly recommended by experts” to build trust and offer relevant guidance.

—Xiang Jun Soh, ChFC/S, Singapore, three-year MDRT member

Solid relationships, solid value

I don’t believe in product-driven sales. No matter how good the product may be, I would never propose a product at the beginning. You won’t last long if you do. I am committed to building solid relationships, and when I am asked to do something, I must be 100% prepared to deliver the latest insurance knowledge and everything related to insurance to my clients. Many people try to solve tax and legal issues by themselves, but financial matters require strong professionals. The best specialists in their respective fields will focus only on that field and delegate everything to others. I want to be a professional who helps solve my clients’ issues. Consequently, my clients value who I am, which makes me satisfied with what I do.

—Tsutomu Sato, Miyagi, Japan, 20-year MDRT member

Accountable goals

The best way to make sure you reach your goal is not just to write it down but to tell as many other people as you can about it. When other people know it’s something you want to do, they’ll hold you accountable, and you’ll hold yourself accountable because you’ve made a promise. You’ve said, “This is what I’m going to do,” and a promise is a commitment.

—Timothy Daniel Clairmont, MSFS, Lake Oswego, Oregon, USA, 14-year MDRT member

Restful sleep

If the stock market is down and a client has lost money but they’re still paying you a fee as their advisor, there may be some pushback. But we’re not paid to make clients money. We don’t make the money; the markets make money. Our job is to hold their hand and get them through it. That’s what we are being paid for. The biggest compliment I’ve received is the message from a client that said, “Because you are in my life, I sleep.”

—Caroline A. Banks, FPFS, London, England, UK, 35-year MDRT member and MDRT Past President

A better retirement question

The standard question advisors ask clients is “When do you want to retire?” Instead, we ask “At what age do you want to be in a position to stop working the following day?” This helps us engage with the client about what they really want in their life. Most people have a standard answer to the retirement question. But ours engages them on something that matters to them, a financial freedom age, which is not attached to a government-mandated retirement age.

—Jamie McIntyre, CFP, Newtown, Victoria, Australia, 13-year MDRT member

Transferring knowledge to clients

I advise my clients to learn. Every time I see my clients, especially those who have not bought any insurance, I print out the insurance laws and regulations involved in my proposal and mark them with a colored pen. This helps clients learn more about the insurance and prevents them from canceling their coverage. If one day the client forgets, we remind them why we chose it, which line we drew and what is marked on it. By seeing that the regulations are the same as the proposal, especially the exemption of liability, the client feels more secure and recognizes the need for insurance.

I also recommend books to clients, such as “The Mystery of Capital,” “The Inescapable Economic Cycle” and “Saving Food for the Winter.” These books cover everything from the original capital to the characteristics of various assets and how to retreat in case of risks.

—Yahan Zhang, CFP, Beijing, China, 13-year MDRT member

Capture your style

Over the span of a client’s policy, we send innumerable mailings, pertaining to multiple service requests. All service-related communication is delegated to our staff, but this task can be challenging each time we recruit a new team member or replace one because training is time-consuming. The communication skills we developed over the years cannot be taught in a couple of weeks, and simply doing a spelling/grammar check does not suffice, as that won’t transfer our style of communication that reflects our personality, brand and the high standards that our clients recognize.

To overcome this, I made templates for every kind of communication that goes out from my office, such as change in contact details, change in nominee, policy update, coverage review, fund switch, application documentation, renewal premium reminder, policy cancellation, post-medical mail and welcome letter. This process has saved precious time that otherwise would have been spent proofreading every mail, teaching mailing etiquette and enhancing communication skills, not to mention the stress and embarrassment caused by mistakes. By adhering to this best practice, advisors can be consistently professional and maintain clients’ confidence in us and our team.

—Priti Ajit Kucheria, LUTCF, CFP, Mumbai, India, 23-year MDRT member

I need your help

It’s not what we say, it’s how we say it. Here’s a phrase I say regularly: “Mr. and Mrs. Client, I need your help.” When someone says that to you, how does it make you feel? Involved. So, “Mr. and Mrs. Client, I need your help to understand what’s keeping you up at night with respect to your financial needs, with respect to your financial planning, with respect to your financial freedom. So, help me understand how I can help you.” Put that phrase in your communication when you’re talking with clients: “I need your help. Tell me what I can do to help you achieve your goals.”

—Shane E. Westhoelter, AEP, CLU, Albuquerque, New Mexico, USA, 13-year MDRT member