Insight into clients' money values imperative to sound financial planning. An article in the December issue of Financial Planning Association's Journal of Financial Planning emphasizes the importance of "money values" in the process of creating an effective financial plan.

"People's goals are a reflection of their personal values, and values change very little over time," says Roy Dilberto, chairman and founder of Philadelphia-based RTD Financial Advisors, in the article. "They are manifestations of personal beliefs and affect the way they use their money."

Concrete

Entitled "Uncovering and Understanding Your Clients' History, Values, and Transitions," the article draws on Dilberto's recent book, Financial Planning: The Next Step: Merging Your Clients' Money with Their Lives, published by FPA Press.

Clients' deep-seated money values, are not often apparent up front, says Dilberto. Rather, they may manifest themselves in "disconnects" between actions and stated values. Dilberto says that even the classic retirement planning question, "When do you want to retire?" leaves ambiguous the concept of retirement. Instead, says Dilberto, it's more effective to ask, "How do you visualize your life in your sixties, seventies, eighties, and later?"

Diliberto gives another example. A client might identify philanthropy as a core money value. Yet his estate plan leaves all his money to his children -- purely out of a sense of obligation and directly against the dictates of his heart.

The trick is to keep probing, keep questioning clients in search of such disconnects -- and then to get clients to enunciate their true goals and work with them to craft retirement plans that address those goals.

"One never knows which of the questions we ask will uncover behavior patterns that may be sabotaging a client's financial success," says Dilberto. -FWR

.