April & Conrad pulled up to The Forks on a beautiful sunny day, ready for their first financial life planning meeting with Fraser & Partners. It had been a long time since they had last visited The Forks – so much had changed! They decided to take some time after their meeting to visit The Common for a bite to eat and a flight of beer before browsing the new shops.
They made their way to Johnston Terminal and up to the office on the 3rd floor where they were warmly greeted. They were a little early and fidgeted on their phones in the reception area while wondering what to expect. April and Conrad were uncomfortable talking about money. They had broached the subject before, and it had never ended well.
A few days prior to the meeting, Fraser & Partners had been in touch and requested they visit the website and fill out the Values worksheet. April and Conrad each did this independent of the other and had not discussed their results. They were curious to see each other’s responses and how their values would be used in the development of their plan.
We created the Denmark family to demonstrate financial life planning strategies without impacting the privacy of our clients. Although scenarios may be based on actual life events experienced by current clients, all information is 100% fictional.
Before the meeting began, April and Conrad were introduced to the entire team. This was a different environment. It was explained that Fraser & Partners works in planning teams that leverage the skills of each team member in a collaborative environment. The team applies varied perspectives, knowledge, and creativity to each client’s financial life plan. This was an interesting concept for Conrad and April, as they had only ever dealt with the bank. This was nowhere near the same process.
The Denmarks’ lead planner (we’ll call her June) explained that the purpose of the first planning session was to clarify their life priorities, build their vision and prepare for the next steps. Conrad secretly wondered when they were going to get to the numbers…
Seated in the meeting room overlooking the Red River, June began; “Let’s start by reviewing your values to determine what is important to you.” June presented the results on the monitor in the meeting room. The Denmarks were fascinated to see how their chosen values differed, but they were not surprised to see “family” listed as a top value for both of them.
April couldn’t help but blurt out “Conrad, I didn’t know how important security is to you. Are you worried about our finances?” Conrad squeezed his chin as he tends to do when feeling stressed and said “Yes, I have to admit the business scares me. When you come home venting about slow sales on a large order of inventory, I have a secret panic attack, wondering about all the ‘what if’s’. What if you can’t get rid of the stock and are stuck with the inventory loan to pay off – where will the money come from? Our house?” April had no idea of the impact the business was having on Conrad. She responded “You have nothing to worry about – I’m just getting things off my chest. I wish I had known this was causing you stress. I wouldn’t be bringing it home to you…” April had tears in her eyes.
June interjected “This is a difficult but important conversation to have. We’re going to address these issues throughout the planning process. We won’t jump ahead to solutions just yet, there is a lot of value taking this one step at a time.” April immediately felt at ease, but Conrad was still wondering about those numbers…
June went on to explain how the system aggregates their responses to arrive at a number of core family values which become the foundation of their life plan. “When you are clear on what is most important to you, you are inspired to take actions that move you toward your life vision,” said June. Conrad couldn’t help but ask “but what about the numbers? Where do they come into play?” June explained that these core values would help them make decisions about the numbers later. June offered an example:
“Let’s say there is a significant amount of extra income available to your household one month due to booming sales in April’s business. You have the choice of reinvesting the money into the business, contributing to your RRSP, saving more for the kids in your RESP or buying a new car. You and April need to decide what to do. You call us and we run the numbers so that you can see the short and long-term impact of each decision. You can then refer to what is most important to you – your shared values and the vision you have created for your life – to make an informed decision. Your top aggregate values are family, health, and achievements”
April and Conrad smiled – they both felt this accurately represented what is most meaningful to them and Conrad finally understood the impact of this exercise, not only on their financial plan but also their whole life. “I’m in!” exclaimed Conrad.
“Great!” said June, “Now let’s build your vision and identify where you are currently and what you expect to have and do in the future. As we step through the process, we use a planning tool that has different graphics to help you visualize aspects of your life. Some represent what you have and do now, such as your home and cottage. Others will reflect what you expect to have or do in the future, such as a renovation or a winter vacation.” April and Conrad found themselves energized by the interactive vision building process. They added university for Jordan and Lily and a possible kitchen renovation in 5 years. Although April and Conrad had discussed plans for their future, they had never had the opportunity to design a model of their life.
During the conversation, April excitedly exclaimed that her vision was to retire at age 60 and travel frequently in the first few years of retirement. This was news to Conrad, who envisioned them both working until age 65 and enjoying a quiet retirement at home.
“With my father’s recent heart attack, I’ve started thinking more about what’s important to me. Although I love the challenge of running my own business, I don’t want to work forever. I’d like to make sure I travel while I’m still healthy” expressed April. Conrad rebutted “I can’t see that working. We’ve got a lot of expenses to pay for.” June suggested they not limit any of the possibilities at this point. “Go ahead and think big. Conrad, be sure to add things you’ve always wanted as well. You’re building a shared vision but that doesn’t mean you can’t make provision for individual wants or needs. We’ll deal with the ‘how’ later.” Conrad thought for a moment and then stated, “I really want a pontoon boat!” They all chuckled at Conrad’s excitement and added it to the vision.
After completing their vision, June explained the next step: “Conrad, we’re finally going to get to those numbers. As a follow-up to this discussion, we’ll be requesting that you complete a questionnaire and collect relevant documents. For the next stage of the process, we need to focus on the facts – your current financial picture. April, we’ll need some financial data on your business as well so that we can integrate your business and personal plan. We try to provide tools to make this data collection as painless as possible, but it will take some time and effort on your part. Will you be able to get the information back to us within the timeframe?” April looked over at Conrad and he smiled, “I’ll pull together all the financial information on our household. Just let me know what you need, and I’ll get on it right away.” April agreed to send the business information as well.
As the Denmarks sat at The Common in The Forks Market, they talked about their first planning session and how they felt about it. Conrad started “Well that was unexpected! I had no idea the meeting was going to go that way. I feel good about it though – how about you?” April responded, “I feel good about it too. I know we’re used to jumping ahead but talking about our values and vision is something we’ve never done in that way before – we got a lot on the table. I get the difference between financial planning and financial life planning now. This is exactly what we need!”
The next installment of The Denmarks will focus on the numbers to identify their current financial picture.