Do your clients’ financial outlooks sometimes seem like they came from another planet? Have you ever felt like your advice was right on but it seemed somehow alien to your client or prospective client? Have you ever felt like you were the financial alien in your own family? If you are answering “Yes” to any of these questions, maybe it’s time to learn a few E.T. (Extra Therapy) techniques in your practice.
- These questions were the impetus for my entry into graduate school in counseling in the mid 90s. Before I ever considered spending the five years in school, internships and supervision for licensing in marriage and family therapy, I was mega curious about how people developed their historic style and preferences when it came to money. I studied family of origin impact and family systems, applying it to how people developed their emotional and cognitive perspectives about money.
In my own family, my parents seemed to be exact opposites with money, and none of my four siblings are alike in money attitudes and habits. We range from being very thrifty to wildly out of control, to somewhere in the middle. Even before I was a financial advisor, I was a conservative saver. Financial planning education helped me diversify without going into a confusion-based panic. One of my siblings, however, seemed addicted to spending money that never even existed.
- Our clients and their marriage partners and children seem to have the same diverse range of personalities. It was all these differences that lead me to research and write about money personalities (The Power in Your Money Personality – 8 Ways to Balance Your Urge to Splurge with Your Craving for Saving) during, and after graduate school.
The acronym F.O.O.L. (Family Of Origin Lessons) I created 18 years ago, adding it to my data gathering form when interviewing prospective clients about their financial planning. I remember having to squeeze it in right after their name. I knew there was an important emotional component to financial decision making, and I didn’t want it to be ignored in advisory relationships. Understanding what my clients had experienced growing up in their families when it came to money, and what impressions that had left on them just didn’t seem optional to me. How did that create their unique rules to live by with money? The first FOOL question I asked began to answer that question:
- What impressions of your family’s financial life did you get when you were growing up?
Clients’ answers to this question alone gave us a wealth of information about what models of handling and viewing money they had acquired as children. By the way, it doesn’t always mean they are like their parents. If they experienced some negative interpretation of what they were observing, they may have formed opposite styles from their parents. Their responses gave me a natural progression of related questions to ask. How openly was money discussed? In what ways were your parents’ styles with money alike and different? How did it affect your expectation of money handling in marriage? Are you more like one parent than another when it comes to money? How has that worked for you thus far? To what extent would you like to change some of your habits or outlooks about money? Would you like us to help with that in your financial planning?
- Often what happens as a result of these FOOL questions is clients discover a belief or habit that they never quite consciously realized they had acquired. It’s important to ask questions in a way that it is the client’s idea to want to make a change. This is where their motivation originates. Otherwise, as the advisor, you just sound like a pushy sales person with your own agenda.
As a result of the FOOL questions, we have heard countless enlightened comments such as:
· “I never thought about how like my dad I have been. He grew up in the Depression and was always worried about money. I would like to worry less.”
· “I’m just now realizing I’ve been trying to be the opposite of my parents. They never saved anything and their lives are very limited financially now. I’ve been too focused on saving and haven’t found a way to enjoy the money I have.”
· “I go back and forth all the time. One day I spend too much, the next I’m fighting myself and vowing to save more and get with it. It’s like my parents are both in my style all the time – still fighting – only this time I’m fighting myself.”
These answers are powerful and the wise advisor who asks the FOOL questions can incorporate the clients’ answers into the advice they provide. You don’t have to be a therapist to help clients move toward their goal of changing their thought habits about money, once they’ve had their awareness heightened. All you need do is listen and show them how your advice helps them make the adjustments they said they wanted to make. And don’t forget to show them the positive impact those adjustments will make on their balance sheet down the road – more often than not, they never did the math!