For Release: June 10, 2008 

DENVER, CO….June 10, 2008…Does life planning work? Are clients more apt to develop long-term relationships with their planners, which are so critical to making and executing long-term client goals?

Yes, according to an excerpt from a white paper published in the June 2008 issue of the Journal of Financial Planning, published monthly by the Financial Planning Association® (FPA®). The white paper, Research: Communication Issues in Life Planning, was researched and written by Carol Anderson, founder and president of Money Quotient, and Deanna L. Sharpe, Ph.D., CFP®, an associate professor in the Personal Financial Planning department of the University of Missouri-Columbia in Columbia, Mo. The study, which interviewed planners and clients, was a collaborative project with FPA, the Life Planning Consortium and CFP Board.

The white paper identified specific elements of communication that engender trust and commitment in planner-client relationships. The excerpt focuses on five specific communication tasks that planners undertake in completing the six-step financial planning process and their impact on client trust and commitment. The study also looked at the impact on six other important outcomes for plans, such as client retention and client cooperation with financial planning recommendations.

For example, one of the communication tasks is for planners to use a systematic process to help clients clarify values and priorities. Fifty-nine percent of planners agreed or agreed strongly that they use such a process, such as a set of worksheets or a series of questions (a surprising 89 percent of clients thought their planners used such a process).

From the perspective of planners and clients, alike, planners who took this systematic approach developed higher levels of trust and commitment from their clients than planners who didn't.

Clients also were significantly more likely to stay with their planner, were more satisfied with the relationship, were more cooperative with financial planning recommendations, were more open in disclosing financial information, were more open in sharing personal goals and priorities, and were more likely to recommend their planner to others.

The other communication tasks in the study included mutually defining the scope of the engagement, helping clients identify meaningful personal and financial goals, and explaining how financial advice aligns with and supports client values.

While planners and clients generally agreed on the importance of the various tasks, one task they disagreed on was the importance of gathering information about a client's cultural expectations and biases, personality types, attitudes and beliefs toward money, and family history and values. Clients rated the importance of this information far more highly than planners did.
Concluded the authors: "We believe that putting more emphasis on the communication tasks will move a planner-client relationship and a financial planning practice from good to great."

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