The most important skill in Financial Planning

What’s the most important skill of a planner’s job?

Is it to do with cashflow modelling? Tax planning or building an amazing investment portfolio? I’d argue that the most important skill of a financial planner is curiosity, but why is that?

In this day and age of the power of Artificial Intelligence (AI) where a computer can pass the bar exam or write an essay there is real concern as to what AI can replace in our world. There is definitely scope for some things to be automated, but one thing that will never be replaced is the human-to-human contact. But how do we use that to our advantage?

Let’s use the first stage in the POWER Planning framework – Clarity

This brings it to life.

The Clarity stage is all about establishing your client’s goals and objectives. The traditional approach would be to focus on the money and to note a fairly shallow goal such as to “consolidate their pensions” or “invest for growth”.

But what if we go into this first meeting with the one goal of being intensely curious about our client?

I love finding out about someone’s life journey; where have they been, what have they done and where are they are now? This naturally leads on to where they want to be in the future and what is important to them? What are their hopes, dreams and worries?

Being curious instantly sets you apart

How many people do you imagine have asked their clients about their life experiences and truly listened to the answer? Think about how many people ask you about yours?

Let’s explore example 1

A client might come in asking you to sort out their pensions, but the real story may be that they have been inspired to pay attention to their pensions because a good friend of theirs has died recently bringing their own mortality to the front of their mind. What they actually want to know is whether they have enough to ease back and semi-retire.

You are perfectly placed to provide a clear picture on how and when they can scale back. Yes, you will sort out their pensions along the way, but in a way that ensures they can accomplish what’s important to them.

Now, example 2

What about the business owner who comes to you via an accountant referral and tells you they want to save some corporation tax by making a company pension contribution? Seems simple, but by letting your curiosity lead you, you find out that they are exhausted by the business and feel like they don’t spend enough time with their family. They also want to relocate to the coast and buy a boat.

Financial Planning provides a timeline

Your planning can give them a timeline on how much they need to sell their business for to establish the exit they want. In the meantime, you can help them extract profits in a tax efficient way and build up their assets outside of the business to give them more freedom with their time.

The only way you would know this is by being intensely curious about who they are and what is motivating them. One other key, you have to genuinely care about the answer and get a thrill about helping the client achieve their goals.

You have the potential to completely change your clients’ lives.

You need to put your heart and soul into this plan with the aim of delighting your clients. This creates relationships that can’t be replicated by AI, and a truly fulfilling professional life for us as financial planners.