> The Third Meeting

The Presentation

The Third Meeting: The Finish Work

After a master builder has poured the foundation and erected the frame of the house, the building has taken its final shape, but it isn’t yet usable. The third stage of construction is the finish work: putting in the walls, roof, flooring, sinks, toilets, cabinets, and windows. Next come the details that make the home unique: wallpaper, paint, carpet, and fixtures. Finally, the entire house is cleaned from top to bottom before the owners move in. That’s an exciting day! The third stage of developing clients’ financial strategies is the finish work, getting everything ready for the presentation. The goal is for the clients to hear the presentation and say, “Wow! This is fantastic! This strategy accomplishes everything I hoped and dreamed it would!”

Prepare the presentation by outlining the client’s goals, and then show how the solutions you recommend accomplish those goals. In my experience in designing financial strategies, I have found that virtually every one contains the same set of components. The purpose of this book is not to equip you with the latest sophisticated presentation skills, but I want to connect the presentation with all we have learned about what matters most to clients. I use the acronym FREE TIC to structure my presentation for the majority of my clients (about seventy-five percent), and I use the “Blueprint for Financial Success” to explain each element. These clients may not have much money saved or invested, and they don’t have a written financial strategy. In many cases, their spending equals and often surpasses their income. I begin with financial freedom as the most important element, and I end with personal accountability to manage cash flow with discipline and purpose.

Clear and Effective

Foundation, framing, and finish work. That’s how a dream house is built, and that’s how to work with clients so our financial strategies fulfill their dreams. These three meetings are designed to give you clear direction, and the clarity provides you with a wealth of confidence that what you recommend is going to be accepted with gratitude.

FAN's process begins with a conversation about the client’s purpose, establishes and builds a strong relationship based on trust, and then tailors the financial strategy to accomplish the very goals and dreams the client tells you about. This is not a cookie-cutter approach. The three-step process provides a consistent framework that gives you confidence, but the focus on the client’s individual dreams allows you to be as creative as you need to be. This is, as they say, the best of both worlds. Or, you can always focus on the issues that make you feel more comfortable - like our friend Professor Snooze:

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What Matters Most: Coach-Training for Insurance and Financial Advisors.

Financial freedom (or retirement)

Some people want to work the rest of their lives, but others eagerly anticipate retirement so they can travel and devote more time to hobbies and their families. And some people fear the prospect of retirement because they have heard reports of the impending collapse of Social Security and the rising costs of long-term care and Medicare.

Whether people actually quit work, continue working, or change vocations to become full-time volunteers, they need a clear plan to achieve financial freedom and accomplish their dreams.

Risk management

We deal with many risks in our lives. These risks range from minor car accidents to catastrophic injury or death. Our experiences of long-term illnesses and disability can cause severe financial hardships, and they can be a burden on those we love. Some of the pain can be alleviated with properly planned insurance.

Education planning

It is important to start putting money aside for college as early as possible. There are many options, each with specific features. Education planning can be challenging because of the complexities of tax considerations, management fees, parental income limitations, and other issues. For example, some accounts charge a penalty if the money is not used for college costs. Saving money, borrowing money, and financial aid are some obvious ways to pay for college.

Your overall financial strategy should include solutions that insure your children will be able to attend college to achieve their dreams.

Estate planning

Estate planning is a process that determines how to distribute your property during your life and at your death according to your goals and objectives. Without advance planning, more of your assets may go to the federal government in taxes instead of the people you love.

The issues that will affect your estate include taxes, probate, liquidity, and incapacity. Your strategy can consist of solutions that are simple and inexpensive (e.g., a will or life insurance). If your estate is large, however, the process can be complex and expensive, involving professionals in estate planning. Even modest portfolios, however, can grow into large ones if they are managed properly, so every person needs to consider estate planning, either now or in the future.

Tax planning

The goal of tax planning is to minimize federal income tax liability while maximizing the after-tax return on investments. Typically, deferring some income in a 401k, 403b, deductible IRA, or other tax-advantaged accounts reduces taxable income. Roth IRA’s are excellent vehicles for many Americans to save for tax-free income.

Each person’s tax planning strategy is based on individual income; solutions that reduce taxes and offer tax-free growth are often appropriate. Some individuals need expert tax advice in order to design the best strategy; but standard solutions work well for most people.

Investments

Almost limitless investment choices are available to every investor. Your strategy is designed to get the highest return within your tolerance for risk and your time horizon. No one can guarantee a profit or protect against a loss in a declining market, but dollar cost averaging (using automatic deductions) takes some of the guesswork out of investing. Asset allocation is the most important step in diversifying your portfolio. You can balance risk and return by spreading your dollars among different types of assets, such as stocks, bonds, and cash equivalents. Different types of assets carry different levels of risk and potential for return, and these investment vehicles typically don't respond to market forces in the same way at the same time.

A long-term strategy will help you ride out the ups and downs of the market to build a sizeable investment account over your time horizon.

Cash flow

Cash flow (or budgeting) is a process to measure, plan, and prioritize spending and saving. Your commitment to financial success requires a clear strategy for managing cash. An analysis of cash flow is the starting point in any financial strategy; it is not optional.

We will analyze your current financial position honestly and realistically, clarify your goals, and develop a clear financial strategy. On an annual basis, we will measure your progress. What matters most in your entire financial strategy is your commitment to success for yourself and the people you love.

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> The Third Meeting

The Presentation