MONEY Financial Planning

The Real Purpose of Financial Planning

A chat about retirement, Italy, and The Golden Girls illustrates how financial planning can help a person uncover and achieve her deepest passions.

Our meeting started with an engaging description of her latest trip to Italy.

She had come in to see how her situation looked retiring now instead of two years from now, as we had originally planned. Approaching her late 60s, she no longer felt like dealing with her new manager, who was making work a little less tolerable than it used to be.

But in our first fifteen minutes, the focus was on the delicious food she tasted and beautiful buildings she toured while overseas with her travel partner.

By listening closely, we planners can learn a lot from the small talk at the beginning and the end of our meetings. Some of the most important parts of our job are to learn the true desires of our clients and to calculate whether their resources will be sufficient to make those dreams come true. But when asked to come up with their life’s goals, many people struggle to articulate what they are or even write down a few possibilities. This is where listening helps us; we can get insights by observing what people get most excited about.

As we began discussing the possibility of her retiring now, my client mentioned her desire to spend more in the early years while her health still allowed her to enjoy traveling. That’s a common theme among early retirees.

Analyzing that scenario, we determined she would need to lower her overall spending a bit each year or generate additional income for her plan to have the best odds of success. So we spent time brainstorming options that would prevent her standard of living from declining significantly during her retirement.

The first thought on her mind was to leverage her knowledge and experiences of Italy by starting a niche travel business that would take first-time travelers on adventures to her favorite places. She also expressed a passion for teaching English as a second language. She hadn’t had the time in the past, but felt this would be a more rewarding way to spend her time than continuing in her current job, even if her income dropped.

It became quickly apparent that this line of thinking had sparked excitement in her about the possibility of doing things she’d always wanted to try — dreams she hadn’t pursued because of her current job.

She next talked about downsizing her home as she got older. Unloading her home would allow her to join a group of girlfriends that all wanted to eventually move in to less expensive, cottage-style dwellings closer to one another. She called this plan her own version of The Golden Girls.

This story reminds us that we don’t always know what we want until we are forced to think deeper about how and why we want it. We spend so much time in our daily lives focusing on what the world measures as success that we too often overlook the things that could truly make us happy.

But when the probability of adjustment is introduced, we gain a clearer perspective of the things that really matter to us. In that mindset, we have the freedom to be creative, as we are forced to embrace the idea of being flexible in the face of potential sacrifices. We begin to prioritize with purpose.

Furthermore, realizing that our money is a tool to help us experience the things we are most passionate about can take our financial planning to a new level of fulfillment. In doing so, we are experiencing the real purpose of financial planning – answering the question, “Will I have enough to do the things I want and love to do?”

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Smith is a certified financial planner, partner, and adviser with Financial Symmetry, a fee-only financial planning and invesment management firm in Raleigh, N.C. He enjoys helping people do more things they enjoy. His biggest priority is that of a husband and a dad to the three lovely ladies in his life. He is an active member of NAPFA, FPA and a proud graduate of North Carolina State University.

MONEY behavioral finance

A Financial Planner’s Most Important Job Isn’t What You Think It Is

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PeopleImages.com—Getty Images

Helping people who are panicking about money is more important than a particular plan or a piece of investing advice.

In the past few years, many of us in the financial planning profession have been coming to terms with a difficult truth: Our clients’ long-term financial success is based less on the structure of their portfolios than it is on their ability to adapt their behaviors to changing economic times.

An increasing number of financial planners are awakening to the fact that our primary business is not producing financial plans or giving investment advice, but rather caring for and transforming the financial and emotional well-being of our clients. And at the very foundation of financial and emotional well-being lies one’s behavior.

I’ve come to understand this over my own three decades as a financial planner, so I was pleased to see the topic of investor behavior featured at a national gathering of the National Association of Personal Financial Advisors in Salt Lake City last May. One of the speakers was Nick Murray, a personal financial adviser, columnist, and author.

“The dominant determinants of long-term, real-life, investment returns are not market behavior, but investment behavior,” Murray told us. “Put all your charts and graphs away and come out into the real world of behavior.”

This made me recall similar advice from a 2009 Financial Planning Association retreat, when Dr. Somnath Basu said, “Start shaking the dust off your psychology books from your college days. This is where [the financial planning profession] is going next.”

Most advisers will agree that, while meticulously constructed investment portfolios have a high probability of withstanding almost any economic storm, none of them can withstand the fatal blow of an owner who panics and sells out.

This is where financial advisers’ behavioral skills can often pay for themselves. Murray, who calls financial planners “behavior modifiers,” reminded us that we are “the antidote to panic.”

Murray said most advisers will try everything they can do to keep a client from turning a temporary decline into a permanent loss of capital. He wasn’t optimistic, however, that the natural tendency of investors to sell low and buy high will stop anytime soon.

His final advice was blunt. “Think of your clients who had beautifully designed and executed investment portfolios that would have carried them through three decades of retirement, who started calling you in 2008 wanting to junk it and go to cash. How many of these people have called you since then and tried to do it again?”

I myself could think of several.

“How many times have they gone out on the ledge and tried to jump, and how many times have you pulled them back in?” Murray asked.

By now I could see heads all over the room nodding.

Then he delivered a memorable line: “I am telling you as a friend, stop wasting your time on these people.” The heads stopped nodding. “Save your goodness and your talents for those who will accept help from you.”

I have certainly learned, often the hard way, that helping people who aren’t ready to change is futile. Yet I disagree to some extent with this part of Murray’s advice. If clients have gone out on the ledge more than once, but have called me and accepted my help in pulling them back in, then together we have succeeded in modifying their behavior.

This is a far different scenario from that of a panicked client who refuses help by ignoring a planner’s advice. If planners see our role as “antidotes to panic,” we need to realize that, for some clients, the antidote may have to be administered more than once.

———-

Rick Kahler, ChFC, is president of Kahler Financial Group, a fee-only financial planning firm. His work and research regarding the integration of financial planning and psychology has been featured or cited in scores of broadcast media, periodicals and books. He is a co-author of four books on financial planning and therapy. He is a faculty member at Golden Gate University and the president of the Financial Therapy Association.

MONEY Savings

Why a New Year’s Resolution to Save More May Actually Work

piggy bank in confetti
Benne Ochs—Getty Images

The economy is up, and New Year's Resolutions are on the decline. Too bad, because making a financial commitment can really help you reach your goals.

Most New Year’s resolutions are pointless. Only one in 10 people stick with them for a year, and many folks don’t last much more than a month. But as 2015 approaches, you might consider a financial New Year’s resolution anyway. Those who resolve to improve their money behavior at the start of the year get ahead at a faster rate than those who do not, new research shows.

Among those who made a financial resolution last year, 51% report feeling better about their money now, according to a new survey from Fidelity Investments. By contrast, only 38% of those who did not make a money resolution said they felt better.

Meanwhile, New Year’s financial resolutions seem to be easier to stay with: 42% find it easier to pay down debt and save more for retirement than, say, lose weight or give up smoking. Among those who made a financial resolution last year, 29% reached their goal and 73% got at least half way there, Fidelity found. Only 12% of resolutions having to do with things like fitness and health do not end in failure, other research shows.

So it is discouraging to note that the rate of people considering a New Year’s financial resolution is on the decline: just 31% plan to make one this year, down from 43% last year. A fall financial pulse survey from Charles Schwab is slightly more encouraging: 36% say they want to get their finances in order and that working with a financial planner would most improve their life. But a bigger share say they are most concerned with losing weight (37%) and would like to work with a trainer (38%). Topping the financial resolutions list in the Fidelity survey, as is the case nearly every year, are saving more (55%), paying off debt (20%) and spending less (17%)—all of which are closely connected. The median savings goal is an additional $200 a month.

Why are financial resolutions on the decline? The stock market has been hitting record highs, unemployment has dipped below 6% and the economy is growing at its fastest pace in years. So the urgency to tighten our belts felt during the Great Recession and immediate aftermath may be lifting.

But no matter how much the economic climate has improved, Americans remain woefully under saved for retirement and paying off debt is almost always a smart strategy. In the Schwab survey, 53% said if they were given an unexpected gift this year their top choice would be cash to pay down credit cards. One key to sticking to your New Year’s pledge: track progress and check in often. Two-thirds of those who set a goal find progress to be motivating, Fidelity found. That’s true whether you are trying to lose 20 pounds or save $20 a week.

More on saving and budgeting from Money 101:

How can I make it easier to save?

How do I set a budget I can stick to?

Should I save or pay off debt?

MONEY Financial Planning

Millennials Are Mooches…and Other Money Myths

mom taking back credit card from daughter
Kevin Dodge—Getty Images

Here are three financial stereotypes that just don't ring true to one experienced planner.

There are plenty of stereotypes about how certain people behave around money — stereotypes I’ve often seen contradicted in my experience as a financial planner. Let me debunk some of these money myths for you.

Myth One: All millennials are mooches.

The 30-year-old client came in for the first time. She asked a question that, if you were to listen to the financial media, no one has ever asks. “Can I pay off the student loans my parents took out for me without any tax consequences?”

Say what? Young people sending money to their parents?

I’ve never heard that mentioned in my almost 20 years in the industry. According to the myth, millennials are unemployed and live rent-free in the basement, while expecting their parents to pay for pricey destination weddings.

My sensitivity to what I hear in the media on this issue started when, to prepare people’s taxes, I started asking clients if they had lent anyone money who hadn’t paid them back.

That’s when I started hearing it. “Hasn’t paid me back? Will never pay me back? Yeah, that’s my Dad.” It’s not common response, but I heard it several times a year.

In fact, I’ve heard about just as many parents trying to mooch off their kids as the opposite. My conclusion: If you have more money than other people in your family, there is a small chance you’ll deal with a mooch — um, I mean, a relative with boundary or entitlement issues.

Myth Two: Women care more about spending money than investing. Men care more about investing than spending.

Perhaps this was true once upon a time. In my practice, however, I regularly see women who are more interested in money, saving, and investing than their husband. Conversely, I see men who love to spend — sometimes more than they know is wise — and enjoy the finest in life.

Recent research shows that while men might score better on a pop quiz about interest rates and bond prices, men and women show no difference in investing and spending behavior.

Myth Three: Financial advisers work only with rich patriarchs.

When I first started in financial planning, I sat next to an established planner at dinner. He described his ideal client: “Men over sixty who have made a lot of money who just want to make sure their families are taken care of.”

“Oh, “ I said, “you work with patriarchs!”

We laughed at my joke. However, in my male-dominated industry, I dare say this is the ideal client of a lot of advisers. I call the pursuit of these clients “Searching for Victor Newman,” after the ultra-rich paterfamilias who drives his family nuts on The Young and the Restless.

Working in the industry has assured me that patriarchy is on the wane. I’ve only had one client who said that “taking care of his family” was what he aspired to, and I’ve talked to hundreds of people about their goals and values.

My experience is that both men and women want to make sure that their kids and partners are taken care of both financially and emotionally. They work on the project together.

This bias gives consumers the impression that advisers only want to help Victor Newmans. Here are three organizations that help both advisers who aren’t hunting for that client and consumers who want to meet them:

And my answer to the client in the fortunate position of paying back her parents? After consulting with an attorney on her specific situation, I told her to go ahead.

———-

Bridget Sullivan Mermel helps clients throughout the country with her comprehensive fee-only financial planning firm based in Chicago. She’s the author of the upcoming book More Money, More Meaning. Both a certified public accountant and a certified financial planner, she specializes in helping clients lower their tax burden with tax-smart investing.

MONEY Financial Planning

7 Pre-New Year’s Financial Moves That Will Make You Richer in 2015

champagne bottle with $100 bill wrapped around it
iStock

Before you pop the champagne this December 31, get your financial house in order.

Didn’t 2014 just start? At least that’s the way it feels to me. Well, regardless of how things seem, the reality is the year is just about over. But that doesn’t mean you can’t make a big impact on your financial future before the big ball drops in Times Square.

You can still achieve some very important financial goals before Dec. 31.

1. Make a Plan to Get Out of Debt

You may not be able to get out of debt between now and the end of the holiday season but you can set yourself up now so you’ll be debt-free very soon. Of course the first step is to watch your spending over the holidays. Don’t overdo it. That only makes it harder to solve your debt situation.

Next, create a system to eliminate debt by first consolidating and refinancing to the lowest possible interest rate. Once you do that, put all the muscle (and money) you can towards paying off the highest cost debt you have and make the minimum payments towards other credit card balances. As you pay off your most expensive debt continue to keep your debt payments as high as possible towards the next highest-cost debt. Repeat this process until you are debt-free. Believe me it won’t take that long. But you won’t ever be done if you don’t start. Why not begin the process of lowering your cost of credit card debt today? (You can use this free calculator to see how long it will take to pay off your credit card debt. You can also check your credit scores for free to see how your debt is affecting your credit standing.)

2. Track Your Spending

Even if you aren’t in debt, it’s important to know what you spend on average each month. Once you know where the money is going, you can decide if you are spending it as wisely as possible or if you need to make some changes.

Many people think they know how much they spend on average but most of us underestimate our monthly nut by 20-30%. You can use a program, a spreadsheet or simply look at your bank statements and track your total withdrawals for the month. It doesn’t matter how you do it. But if you aren’t tracking your spending, I recommend you start doing so now.

What’s great about starting to track spending before the new year is that you get used to your system and if you use a program or spreadsheet, it will also simplify your tax reporting for next year. This is especially helpful if you do your own taxes.

3. Review Your Estate Plan

Things usually slow down at work during the holidays. That gives you time to get to important items you may have been putting off. Estate planning is one of those items that people often procrastinate on.

I’m not asking you to get your will or trust done by Dec. 31 (although you could). But at the very least do two things:

  1. Educate yourself about the difference between wills and trusts.
  2. Find a good estate planning attorney or legal service and start the process.

My parents completely ignored this topic. When they both died young and unexpectedly, it made it monumentally more painful, difficult and scary for my siblings and I. Don’t take chances. You can and should start taking care of your estate planning now.

4. Review Your Life Insurance

As long as we’re talking about estate planning, we might as well dust off your old life insurance policies and give them the old once over. Some people have outdated and overly expensive life insurance they no longer need. Others walk around woefully under-insured, exposing their loved ones to great risk that is completely avoidable.

Pull out your old policies today. Do you still need those policies? If not, cancel them. If you do need insurance, start comparison shopping to make sure you have the right coverage at the right price.

5. Start Investing

If you’ve been on the fence about investing it’s time to stop thinking and start doing. If you don’t know how to get started, there are plenty of great resources on the Web. You need to understand the basis, of course, but you don’t need a Ph.D. in economics before you leave the starting gate. Once you read up on the basics of investing, be prepared to start slow and learn as you go. You will be fine.

And remember: You don’t need a pile of dough in order to start investing. If you are a DIY investor, there are plenty of good online brokers who will open an account for as little as $500. Can you think of a good reason to wait until next year to start investing? I can’t either. Let’s go.

6. Maximize Your Retirement Contributions

Before year-end, make sure you have maximized allowable contributions to your retirement plan at work. Unless you are in debt, you want to take advantage of employer matching if at all possible. Even if there is no matching program at work, try to maximize your plan contributions. This will give you the benefit of tax deferral and a forced savings plan.

Call your HR department today to find out if you can bump up your retirement plan contributions for the year.

7. Get in Front of Your Finances

You have an amazing opportunity right now. Make sure you are on top of your financial game now, next year and beyond. Take out a calendar right now and schedule when you are going to begin and follow through on the items on this list.

Look at your calendar for the next seven days. When are you going to:

  1. Inquire about refinancing your debt?
  2. Set up your spending tracking system?
  3. Start asking for estate planner referrals?
  4. Review your life insurance?
  5. Set up your investment account?
  6. Call HR and make sure to bump up your retirement contributions to max out for the year?

Taken all together, the list above might seem overwhelming. But if you do one task each day, you can really change your financial life this week. Each task above will take you between 15 minutes to three hours to complete. Are you going to do one item each day this week? How will you feel once you’ve begun? Or are you going to wait until “after the holidays”?

More from Credit.com

This article originally appeared on Credit.com.

MONEY Financial Planning

3 Questions That Will Put Your Finances — and Life — on the Right Track

Backpacker on mountain trail
Backpacker on mountain trail Getty Images

Financial planning guru George Kinder has a powerful tool for helping people set priorities for their money...and their lives. Here it is.

Few things seem more diametrically opposed than managing money and spiritual enlightenment. But not everyone sees it that way. Some very influential people in the financial advisory community have dedicated their lives to helping advisers assist clients deal with the more personal elements in personal finance.

Consider George Kinder, the Harvard-trained economist-turned-philosopher-turned-CPA. He managed to evolve his tax practice into a comprehensive financial advisory offering, with supporting methodology, while on the successful path to becoming a Buddhist teacher based in Cambridge, Mass. and Hana, Hawaii.

Within the advisory community, Kinder is almost universally known as the “father of life planning.” To many advisers, his work is the seminal, much-needed missing link between life and money. He originally articulated his views in his book, The Seven Stages of Money Maturity. Many more advisers, however, envision Kinder playing the ukulele on a magic carpet — just a little too “out there” for mainstream consumption and practical application. Having moved from the camp of skeptics to the camp of adherents myself, I invite you to consider what could become one of the most valued tools in a financial planning practice: George Kinder’s Three Questions.

Most advisers believe it’s vital to know a client’s answer to the following two questions: “What are your goals in life?” and “What are your values?” Unfortunately, most financial planners simply ask them verbatim. The responses they receive to those starkly boilerplate questions are largely generic. Clients answer with what they think they’re supposed to say, not with a measured evaluation of what’s actually most important to them. Kinder takes a different route, beginning with his first of three questions.

Question One: I want you to imagine that you are financially secure, that you have enough money to take care of your needs, now and in the future. The question is, how would you live your life? What would you do with the money? Would you change anything? Let yourself go. Don’t hold back your dreams. Describe a life that is complete, that is richly yours.

If Kinder lost you at “Let yourself go,” go back and refocus on the first part of the question. Better yet, simply answer the question yourself. What you’ll likely find in your answer is a more complete, genuine, and interesting response to our traditional question, “What are your goals in life?” You see — there’s a method at work here.

The second question goes deeper.

Question Two: This time, you visit your doctor who tells you that you have five to ten years left to live. The good part is that you won’t ever feel sick. The bad news is that you will have no notice of the moment of your death. What will you do in the time you have remaining to live? Will you change your life, and how will you do it?

The first time I read this question, I approached it entirely too literally. Most clients, I retorted internally, can’t just decide (or afford) to live life as though they knew they were going to die within the next 10 years! But again, the point of this query is to evoke a better answer to the question, “What are your most deeply held values?” Here you’ll receive a lot of answers about family, relationships and bucket-list items.

Another purpose of question two is to prepare you for the third question.

Question Three: This time, your doctor shocks you with the news that you have only one day left to live. Notice what feelings arise as you confront your very real mortality. Ask yourself: What dreams will be left unfulfilled? What do I wish I had finished or had been? What do I wish I had done? What did I miss?

If a client really engages with this third question, you’ll now get beyond superficial answers and start to learn about what really drives this person in front of you. You’ll discover what makes them unique, what they long for, and what should likely be reflected in your planning to avoid making more recommendations that will only fall on deaf ears.

I have seen numerous advisers employ Kinder’s Three Questions and vastly improve their insight into a client’s values and goals. For fully dedicated Kinderites, this is just the beginning. There’s an entire planning methodology found in his book on practice management and in his courses.

George Kinder has provided some much-needed yang to the financial industry’s yin. For your practice, for your clients — and even for you — his Three Questions should be informative. And who knows? They may be transformative too.

Consumers can get a free, self-guided version of Kinder’s EVOKE life planning process — including the Three Questions and other exercises — at LifePlanningForYou.com.

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Financial planner, speaker, and author Tim Maurer is a wealth adviser at Buckingham Asset Management and the director of personal finance for the BAM Alliance. A certified financial planner practitioner working with individuals, families and organizations, he also educates at private events and via TV, radio, print, and online media. “Personal finance is more personal than it is finance” is the central theme that drives his writing and speaking.

MONEY Financial Planning

Why a Safe Space Makes for Better Financial Plans

mugs of hot chocolate with marshmallows
Barbara Stellmach—Getty Images/Flickr Open

To really help their clients, financial planners need to create an environment -- both physical and conversational -- that's comfortable and reassuring.

Nicole walked up the driveway wearing flip-flops. It was that kind of day.

We held our meeting outside in the garden — one of the perks of my having a home office. I’ve heard repeatedly how meeting outside takes away the stress of difficult financial conversations, and sometimes even goes so far as to make them a delight.

When Nicole had first hired me, she was blunt. “I’m blowing through my trust fund, and it’s going to run out,” she said. “I need you to help me learn how to make it last, but don’t put me on a cold-turkey budget because that is going to backfire.”

At this and other meetings, we explored the narrative of her life. Part of what we uncovered was that her job was a bad fit. She needed a change, something where she made a difference and where she could get outside instead of working indoors at a desk all day.

I’ve come to appreciate over the years how a big part of what I do is hold the space for conversations like ones I had with Nicole — conversations about issues people know they need to face, but ones that are oh-so-easy to postpone.

When I say “holding the space,” I mean that I’m creating an atmosphere in which people can feel safe. Part of that is designing the physical space to create a more relaxed atmosphere. At my home office, my clients leave their shoes at the door, come into my kitchen as I prepare tea for them, and then they choose where we sit — inside (at the dining table or in the living room) or outside (on the porch or in the garden.) I’ve seen similarly relaxing physical environments in commercial office spaces, where the ‘conference room’ looks more like an inviting living room and the financial planner’s dog greets clients with his welcoming, wagging tail.

While the physical space sets the tone, it’s the conversation that follows which is most important. Holding the space means people feel they can move through whatever they need to move through, knowing that they’re not going to be judged by me. It’s where clients state what’s holding them back from doing what they know they need to do. It means that I name what I see, and sometimes that means saying out loud what isn’t being said. It’s asking evocative questions to understand more deeply. It’s where couples can talk to one another about money. When a client has a decision to make, I identify trade-offs and give equal weight to the non-financial component. We brainstorm what it’ll take to get them one step closer to being where they want to be. And we pause to look back and celebrate all the steps forward.

This story had a nice, happy ending for Nicole. And it was rewarding to me, too. When Nicole talked about just how unhappy she was with her work, I worked up a five-year transitional cash flow plan which provided her time to explore and find a more suitable job while she also made gradual lifestyle changes.

She no longer felt guilty or alarmed when spending her trust fund because she saw how she was using it intentionally, while also taking concrete steps to use less of it over time. She committed to the process, finding meaningful work along the way, and reaching the place where the remainder of her inheritance truly became long-term money.

My experience with Nicole taught me how much I enjoy working with her demographic: Young people, overwhelmed by money, who want to do something meaningful with their lives and want to use their money to help them achieve that goal. And it’s by holding the space for these conversations that, together, we accomplish just that.

MONEY Financial Planning

How Families Can Talk About Money Over Thanksgiving

Family Thanksgiving dinner
Lisa Peardon—Getty Images

Holiday get-togethers are a great time for extended family members to discuss topics like estate planning and eldercare. Here's how to get started.

While most Americans are focused on turkey dinners and Black Friday sales, some financial advisers look to Thanksgiving as a good time for families to bond in an unlikely way: by talking about money.

The holiday spirit and together-time can make it easier for families to discuss important financial matters such as parents’ wills, how family money is managed, retirement plans, charity and eldercare issues, advisers say.

While most parents and adult children believe these discussions are important, few actually have them, according to a study conducted last spring by Fidelity Investments. Family members may avoid broaching these sensitive subjects for fear of offending each other.

That is where advisers can shine.

“When you help different generations communicate and cooperate on topics that may keep them up at night, it bonds them as a family,” says Doug Liptak, an Atlanta-based adviser who facilitates family meetings for his clients. It can also help the adviser gain the next generation’s trust.

Advisers can encourage their clients to call family meetings. They can also offer to facilitate those meetings or suggest useful tips to families that would rather meet privately.

Talking Turkey

Family meetings should not be held over the holiday table after everyone has had a few drinks, but at another convenient time.

“That may mean in the living room the next afternoon, over dinner at a fun restaurant, or at a ski lodge,” says Morristown, N.J.-based adviser Stewart Massey, who has vacationed with clients’ families to help them hold such mini-summits.

It is critical to have an agenda “and be as transparent as possible,” he says. Discussion points should be written out and distributed to family members a few weeks ahead to avoid surprises. Massey also suggests asking clients which topics are taboo.

Liptak likes to meet one-on-one with family members before the meeting. If you can get to know the personalities and viewpoints of each family member and make everyone feel included and understood, you will be more effective, he says.

“You might have two siblings who are terrible with or ambivalent about money, while the youngest is financially savvy, but you can’t give one person more say,” says Liptak.

It also helps to get everyone motivated if the adviser brings in the client’s children or other family members ahead of time to teach them about money management topics, like how to invest, says Karen Ramsey, founder of RamseyInvesting.com, a Web-based advisory service.

Sometimes the clients are the adult children who are afraid to ask how the parents are set up financially or where documents are, she says.

Ramsey says advisers can help by letting clients and their families know that a little discomfort may come with the territory. She will say, and encourages her clients to say: “There’s something we need to talk about and we’ll all be a little uncomfortable, but it’s okay.”

The adviser can kick off a family meeting by asking leading questions, such as “What one thing would you like to accomplish as a family in 2015?” says Liptak. Then the adviser can take notes and continue to facilitate the discussion by making sure everyone gets heard and pulling out prepared charts and data when necessary.

Massey suggests families build some fun around the meetings. His clients often schedule them around the holidays and in the summer, often tucked into a vacation or weekend retreat. It is a good practice to have them regularly, like board meetings, he says.

And if the family has never had a meeting before?

“Don’t start with the heavy stuff,” says Liptak. “It’s a good time to focus on giving and generosity, like charities the family can contribute to.

“You can collaborate on an agenda for later for the bigger issues.”

MONEY financial advice

Tony Robbins Wants To Teach You To Be a Better Investor

Tony Robbins vists at SiriusXM Studios on November 18, 2014 in New York City.
Tony Robbins with his new book, Money: Master the Game. Robin Marchant—Getty Images

With his new book, the motivational guru is on a new mission: educate the average investor about the many pitfalls in the financial system.

It might seem odd taking serious financial advice from someone long associated with infomercials and fire walks.

Which perhaps is why Tony Robbins, one of America’s foremost motivational gurus and performance coaches, has loaded his new book Money: Master The Game with interviews from people like Berkshire Hathaway’s Warren Buffett, investor Carl Icahn, Yale University endowment guru David Swensen, Vanguard Group founder Jack Bogle, and hedge-fund manager Ray Dalio of Bridgewater Associates.

Robbins has a particularly close relationship with hedge-fund manager Paul Tudor Jones of Tudor Investment Corporation.

“I really wanted to blow up some financial myths. What you don’t know will hurt you, and this book will arm you so you don’t get taken advantage of,” Robbins says.

One key takeaway from Robbins’ first book in 20 years: the “All-Weather” asset allocation he has needled out of Dalio, who is somewhat of a recluse. When back-tested, the investment mix lost money only six times over the past 40 years, with a maximum loss of 3.93% in a single year.

That “secret sauce,” by the way: 40% long-term U.S. bonds, 30% stocks, 15% intermediate U.S. bonds, 7.5% gold, and 7.5% commodities.

Tony’s Takes

For someone whose net worth is estimated in the hundreds of millions of dollars and who reigned on TV for years as a near-constant infomercial presence, Robbins—whose personality is so big it seemingly transcends his 6’7″ frame—obviously knows a thing or two about making money himself.

Here’s what you might not expect: The book is a surprisingly aggressive indictment of today’s financial system, which often acts as a machine devoted to enriching itself rather than enriching investors.

To wit, Robbins relishes in trashing the fictions that average investors have been sold over the years. For instance, the implicit promise of every active fund manager: “We’ll beat the market!”

The reality, of course, is that the vast majority of active fund managers lag their benchmarks over extended periods—and it’s costing investors big time.

“Active managers might beat the market for a year or two, but not over the long-term, and long-term is what matters,” he says. “So you’re underperforming, and they look you in the eye and say they have your best interests in mind, and then charge you all these fees.

“The system is based on corporations trying to maximize profit, not maximizing benefit to the investor.”

Hold tight—there’s more: Fund fees are much higher than you likely realize, and are taking a heavy axe to your retirement prospects. The stated returns of your fund might not be what you’re actually seeing in your investment account, because of clever accounting.

Your broker might not have your best interests at heart. The 401(k) has fallen far short as the nation’s premier retirement vehicle. As for target-date funds, they aren’t the magic bullets they claim to be, with their own fees and questionable investment mixes.

Another of the book’s contrarian takes: Don’t dismiss annuities. They have acquired a bad rap in recent years, either for being stodgy investment vehicles that appeal to grandmothers, or for being products that sometimes put gigantic fees in brokers’ pockets.

But there’s no denying that one of investors’ primary fears in life is outlasting their money. With a well-chosen annuity, you can help allay that fear by creating a guaranteed lifetime income. When combined with Social Security, you then have two income streams to help prevent a penniless future.

Robbins’ core message: As a mom-and-pop investor, you’re being played. But at least you can recognize that fact, and use that knowledge to redirect your resources toward a more secure retirement.

“I don’t want people to be pawns in someone else’s game anymore,” he says. “I want them to be the chess players.”

MONEY fix my mix

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