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Financial Planner Blog

Smart Clients Choose Holistic Advice

By Jaeki Jung, CFP

“Which is more appropriate, scaled or holistic advice?” This question cannot be answered without knowing ‘the object’ and ‘the situation’ first. This is because sometimes scaled advice can be enough and sometimes holistic advice can provide the client more desirable recommendations. In the end, a question of choice between scaled and holistic advice will be left.

Thus, I believe that explaining both planning options to the client should be done, first and foremost, because many clients don’t know the differences between the two. The client has the right to choose their preferred approach after hearing the financial planner’s explanation. A doctor can decide on his professional discretion whether he or she would furnish a prescription immediately after a first diagnosis, or do more treatments with a holistic examination of the patient. But, generally, it would be necessary for him or her to seek the patient’s consent if the treatment is going to take a long time or entail high costs. This is because it is ‘the patient’s body.’

Who Owns Financial Planning?

The same rationale can be applied to financial planning. Financial planners often value their ‘professional opinion’ over the client’s. But let’s stop to think for a moment: Who owns the ‘object’ of financial planning?

I recommend holistic financial planning to as many clients as possible, and more clients have chosen holistic advice. I, of course, keep them informed that scaled advice is also available. Scaled advice is provided, in general, when a resolution of a pending issue is urgent or when time and financial situations do not seem to allow for holistic financial planning. Notwithstanding, with a certain span of time passing and situations changed, the holistic approach is recommended once again. Just as regular checkups of one’s health, in a medical institution, are the way to keep oneself in good shape, holistic analyses and assessments of one’s finances are a prerequisite.

Most of the clients I have encountered have little experience of receiving systematic holistic financial planning. They have merely consulted, every now and then, their acquaintances or professionals around them regarding, for example, insurance or investment. As a result, they have had few opportunities to look into their finance or life in a holistic picture. This is why from a holistic point of view they have a lot to desire, even though they may have made wise ‘scaled’ choices.

Educated Clients Choose Holistic Planning

The clients who have received holistic financial planning often say ‘the experience was more than they had expected.’ It may be because it was the very first time they have ever experienced it. Even so, in the mind of those who have seen the whole and looked at scaled scopes, subsequently there remains the picture of the whole. To the extent that this is true, they will earn the confidence that ‘I can manage, and know where I stand now and where I am headed.’ And this kind of confidence will, as a corollary, lead, in a natural way, to their trust in the financial planners.

Read More of Jaeki’s Blogs!

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