{"id":58074,"date":"2025-01-08T08:00:00","date_gmt":"2025-01-08T14:00:00","guid":{"rendered":"https:\/\/taxprocenter.proconnect.intuit.com\/?p=58074"},"modified":"2025-01-03T10:50:32","modified_gmt":"2025-01-03T16:50:32","slug":"values-based-financial-planning","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/advisory-services\/values-based-financial-planning\/","title":{"rendered":"Values-based financial planning"},"content":{"rendered":"\n

When I speak to CPAs and accountants about introducing financial advisory services<\/a> into their practices, they usually ask about which credentials they must get\u2014Series 7, CFP\u00ae<\/strong>, CPA, and others\u2014or the technology platform they\u2019ll need, and of course the regulatory requirements which they must adhere to.<\/p>\n\n\n\n

These are all important considerations, but one thing rarely asked about is how they should get to know their clients better. After all, they\u2019ve been doing client business and tax returns for years, not to mention their bookkeeping, cash flow planning, and tax planning. How much more is there to know about their financial life?<\/p>\n\n\n\n

Plenty.<\/p>\n\n\n\n

Getting to know your client\u2019s unique values, beliefs, and goals, in addition to their financial situation, is one of the most important first steps to creating a customized and sustainable financial plan<\/a> for them. Financial advisors sometimes need to be reminded of this as well.<\/p>\n\n\n\n

Unlike traditional goal-based financial planning in which you need \u201cthis much money by this age\u201d in order to retire, values-based financial planning<\/strong> aims to align a person\u2019s financial plans with their life purpose and goals.<\/p>\n\n\n

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Brendan Frazier, chief behavioral officer at RFG Advisory<\/a>, told me on my podcast<\/a> that understanding a client\u2019s values is crucial for establishing a strong foundation right from the initial discovery meeting. As Frazier explained, values shape our goals and our goals shape our behaviors. By uncovering what truly matters to our clients, he said we can align their financial plans with their core values, creating a sense of purpose and motivation.<\/p>\n\n\n\n

“Values provide the guiding light for our financial decisions,\u201d said Frazier, who also hosts The Human Side of Money Podcast<\/a>. \u201cWhen we know our clients’ values, we can help them align their financial goals and behaviors accordingly.”<\/p>\n\n\n\n

 Frazier believes financial advisors can harness the power of storytelling by weaving personal experiences into their interactions with clients. By sharing their own stories of financial challenges, successes, and lessons learned, he maintains that advisors can create a relatable and human connection that \u201ctranscends numbers and spreadsheets.\u201d This approach, said Frazier, \u201cHelps clients see the advisor as a partner who understands their journey and who can guide them toward their financial goals.\u201d<\/p>\n\n\n\n

Values-based exercise<\/strong><\/p>\n\n\n

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Another advocate of values-based planning is my friend, Doug Lennick, CEO of Think2Perform<\/a>, the organization that created the Behavioral Financial Advisor (BFA) accreditation. Think2Perform has a wonderful values-based exercise<\/a> that can be used to help clients uncover the values that matter most to them. It works simply by adding and discarding cards that have certain personal values printed on them\u2014Family, Security, Change, Education, Work\u2014until a client has a small pile of values’ cards left that best align with their beliefs. Try the exercise for yourself<\/a>!<\/p>\n\n\n\n

Overriding the brain\u2019s desire to make rash decisions<\/strong><\/p>\n\n\n\n

On my podcast<\/a>, Lennick talked about the importance of making decisions by reflecting on our values. In a values-based reflection, he said clients can recognize when their emotional state is too charged to make clear decisions, “This recognition serves as a trigger for reflection, which engages the cognitive brain and allows clients to gain clarity.”<\/p>\n\n\n\n

During the reflection phase, Lennick said clients are prompted to focus on what matters most to them, including their core values. In Doug\u2019s case, for instance, family, happiness, wisdom, integrity, service, and health ended up being his most important values. By deliberately reflecting on their highest-priority values, Lennick believes clients are compelled to think more deeply about them. He said they can then put words in front of their values, forming affirmations such as “love your family,” “be happy,” “seek wisdom,” “behave with integrity,” “do something of service for somebody else today,” and “make healthy choices.”<\/p>\n\n\n\n

Like Lennick, I\u2019ve found that reflecting on values and affirming them helps clients engage their brains and calm their emotional centers. As a client’s brains become more engaged, Lennick said they are better equipped to consider the big picture and to make decisions aligned with their core values and long-term goals.<\/p>\n\n\n\n

Types of values<\/strong><\/p>\n\n\n

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Let\u2019s take a more detailed look at values with help from my friend Amy Mullen,<\/strong> president of Money Quotient<\/a>, which teaches financial professionals how to bring science to the art of relationships. On my podcast<\/a>, Mullen told listeners that we must continually check in and assess clients as part of our regular meeting cadence\u2014not just during tax season or during year-end planning. She added that life transitions<\/a> such as marriage, birth of a child, job loss, or death of a loved one, usually cause a shift in a client\u2019s priorities. As a result, you need to \u201cbe there for them\u201d providing financial and emotional support.

According to Mullen there is a broad spectrum of values from which clients tend to direct their lives:<\/p>\n\n\n\n