What is a common client pain point when creating or implementing a financial plan? How do you help clients overcome it?

Brian Shumak, financial planner, Brian Shumak Financial Services, Toronto

Cash-flow management is painful for clients because it requires conscious spending habits. Yet, knowledge about their spending gives clients power to prioritize. A second pain point occurs when a client realizes they won’t have enough for an ideal retirement—debt-free and full of travel—so they decide to work as long as they can.

I suggest clients use cash for a month or two when shopping, because there’s an emotional disconnect to tapping a card. For clients who consider working longer, we discuss what they’ll do if they fall ill or experience incapacity. Together, we consider the possibilities to make up the shortfall—help from family, savings, selling property, insurance and so on. Insurance is often the most cost-effective solution.

Marie DeLauretis, financial planner, Desjardins Financial Security Investments / DeLauretis Wealth Management, Calgary

Clients say their pain point is the time and effort required to gather the data to create their plans. Clients are busy with work and kids, and some have to gather pension information from other countries.

I provide a comprehensive list of the data I need, highlighting what I already have and requesting the remainder over time. I break the items down by category, such as investments, pensions and insurance, and I inform clients of where to find what they require, such as CPP numbers.

My clients have fee options. Those who pay specifically for a plan tend to gather their data in a timely manner, and the plan is completed in about two months.

Sean Straughan, financial planner, Niagara Wealth Retirement Solutions, Grimsby, Ont.

Getting clients to talk about their future selves is challenging, because facing mortality is a pain point and people tend to have a short-term bias. Clients find it easier to focus on tomorrow or on retirement age, but they need to see age 85, too.

I help clients focus by discussing life expectancy probabilities. A 65-year-old client might have a 40% chance of reaching age 90 and a 25% chance of reaching age 100, taking family history into consideration. With these probabilities in mind, the client is shown a graph of their potential cash flow over time.

A second pain point is getting clients in low tax brackets to accept that a TFSA may be more appropriate than an RRSP—clients like the RRSP tax refund. I explain the benefits of the TFSA, according to the client’s expected marginal tax rate and circumstances.