Stone By Stone
If you happen to be gazing at a magnificent cathedral just as a mason walks by, you might be tempted to ask how one goes about building something so overwhelming. The answer is likely to be the title of today’s article. Experience shows that even a task which is almost too large to be comprehended can be completed if it’s broken down into smaller steps which can be dealt with one at a time.
There are actually a couple of ways this insight applies to Warren Ward Associates’ work in helping people plan for the rest of their lives. A classic financial plan covers five basic areas: investments, taxes, insurance, retirement planning and estate planning. However, we sometimes do much more, including helping purchase homes and cars, recommend physicians and tax preparers and even stand with clients when a loved one dies. Although it might be beneficial to meet a financial planner at an early age, most of the time people call us when a significant life change is about to occur (or already has).
Of course, the better we know someone, the better our advice is likely to be, meaning we prefer to review copies of quite a few different documents. For years, we didn’t begin the planning process until we had everything we thought we’d eventually need. We’ve now learned that we can gather the necessary information step by step nearly as efficiently. We begin with the issue which calls for the most immediate attention, then expand the scope of our work until we have provided guidance in all the areas which the planning process has identified as being important.
I’ve reviewed many different financial plans in my twenty-plus years as an advisor but, as far as I’m aware, ours is unique. Over that period, computing power has allowed us to transition from a legal pad and adding machine tape through spreadsheets to dedicated web-based planning software. The data we gather from our clients is entered into various fields in the software. Then, based on the client’s tolerance for risk and our assumptions regarding inflation, rates of return for various investment classes and lifespan, charts and graphs are produced. These illustrate various scenarios and allow us to show people what they might expect in an easy to understand format.
Although these reports are quite detailed, our approach is not unusual. In fact, something similar is available at little or no cost from discount brokerage companies and even on advertising supported websites. It’s the second part of our plan that seems to be unique. While most others consist of page-after-page of boilerplate language (also seen in those Revocable Living Trusts offered by out of town attorneys), our printout is accompanied by a letter to the client. It generally runs several pages in length and covers the various topics we’ve reviewed, pointing out any potential problems I foresee and suggesting actions that clients can take to improve their outcome.
Just as I have learned that people aren’t always able to pull together all the documents we’d prefer initially, I’ve also learned that people don’t necessarily get all the way through my list. Knowing they may not have time to accomplish more than one or two tasks, I’m careful to organize them in order of importance. If I have done a good job of triage, people often resolve the first couple, then find themselves comfortable enough to not act on the others. This approach has worked well for over ten years now. However, I was surprised a few weeks ago when a newly retired couple approached me with some thoughtful questions about their living trust which had been put in place several years earlier. As I thought about my response, I realized that it was the last item on my list. I believe this was the first time in my professional life that a client had methodically gone through all of my recommendations and dealt with each of them. Time will tell if this improves their lives in retirement but it does prove it can be done.
A good friend gave me a CD by Joe Crookston, a musician who performs in Columbus from time to time. One of the songs on it describes how dealing with life’s problems one at a time usually works better than worrying about all of them at once. Its title? Stone by Stone. I was tempted to buy a copy for that couple but I think it’s safe to say they already understand the concept.