The Meaning of Financial Wellbeing

By: Julie Lord
Chief Executive
Magenta Financial Planning

The term ‘Financial Wellbeing’ is very subjective and can be defined differently by each person who uses it. The new Initiative of Financial Wellbeing has defined it as “the study and application of how money can make us happy” and I support that, but ‘well-being’ is derived from other things too. It’s being physically and mentally well, having purpose in your life and having good social relationships.

In addition to the above, I believe in a bigger description of wellbeing, which interestingly the online dictionary defines as “the state of being comfortable, healthy, or happy”.

My first conversations with clients are about what makes them happy; finding ways to talk about their purpose and about their physical and mental wellbeing. Inevitably we are like counsellors, because it is important to help people think about the future and how they want to live to be fulfilled and happy. It is my strong belief that those advisers who only concentrate on money, miss significant opportunities to engage clients and be their trusted adviser.

The whole process of Financial Wellbeing starts with you

As advisers, we have to walk the talk. There’s no authenticity in trying to talk to clients about their financial wellbeing if you are not experiencing it yourself. Living a life that your clients aspire to is a great reason for them to choose you over someone else. The same goes for the team supporting you.

The people who work for us are arguably more important than our clients – looking after them properly and considering their well-being, always pays dividends in client care. In our office we took an extra floor and set up a yoga room and relaxation space. Other companies have done similar things with pool tables and football games. It helps to make it fun to come to work. We give holiday days on birthdays and extra time off between Christmas and New Year too.

We won’t work with clients who won’t share everything with us

We do full, comprehensive Financial Planning and if clients don’t want to engage with this, they can go somewhere else! Before the first “Discovery” meeting we send out a simple questionnaire to get them thinking about what can be done to make them happier, more confident and more in control of their life, not just their money. This way, they immediately get the idea that this is going to be a different conversation from the one that they might have expected.

In the first meeting we explore what’s important to them

What is it that we can help them to achieve in their life and why? It’s important to ask why they want to do something, because often they don’t really understand why. Sometimes it takes time and some sensitive questioning to get to the bottom of why they are thinking of doing something. A recent conversation: “I’m thinking of taking up art classes.”

“Oh that’s interesting. Why are you thinking of doing that?” We talked about relaxation and purpose and direction and learning new skills and keeping their minds active and not getting Alzheimer’s.

We become really good biographers of our clients’ lives

Asking a further “why” or “how will that make you feel” question means that clients open up more and you get their life stories. It’s through these stories that you discover what really makes people tick. That the reason for the art classes is because they do not want to get Alzheimer’s as their father did. It’s by uncovering these client stories and worries that you will be able to improve your clients’ wellbeing because these worries are a barrier to that wellbeing.

Only once we’ve got all the personal information, can we talk about their money and begin to connect the two things together.

The Planning Meeting is when we share cashflow forecasting

We set aside a couple of hours because more information will come out during this meeting. The purpose is to show clients whether they are on track to achieve the things they’ve talked about – the important things that will make them happy. Some people may have a lot of money but may not be doing some of the things they want to, for fear of running out of money. They need somebody to reassure them and show them they have enough and then give them permission to spend or to give it away. Other people just aren’t there yet. So, we talk about how we can help them get to where they want to be.

For those who don’t have enough money

We always charge for the planning and cashflow forecasting. We’ve recently launched the Magenta M service, a subscription service where clients pay us £50 a month so that we can provide simple guidance and make sure they’re getting things right. We often have younger clients where literally all we’re doing is helping them with a budget. Once they’ve got their emergency fund sorted out and are a bit more secure, then we can start to talk to them about investments. This is our way of helping a wider, younger audience.

Keeping in touch with other clients

We see our comprehensive Financial Planning service clients once a year, but we are in contact with them all year. We send them a weekly blog and we make sure that we do special things for clients all the time. Some clients are constantly in contact, but we only need one planning meeting a year unless there’s been a significant change in circumstances. If any of us in the team see something that we think will be particularly interesting to a client, we’ll drop them a line about it and they now they do the same for us. If clients on holiday see something Magenta, they always take photographs and send them to us.

The most important definition of Financial Wellbeing is the client’s

The conversation in the first meeting has to be about getting the client’s definition of their own wellbeing. What is it they really, really want? What will make them happier? Not just, I want to retire early or I want to sell my business etc. We need to properly understand why they want something and how they will feel when they get it.

We are using comprehensive Financial Planning to enhance our clients’ wellbeing.


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