The Power of Story-Based Estate Planning, Part 3

by Jackie Bedard on May 5, 2010

in Estate Planning

Continuing the series from Scott Farnsworth and Sunbridge Legacy Builder Network. Here is Part 2 in Scott’s series about the power of story-based planning. If you missed Parts 1 and 2, you can read them here and here.

The Power of Story-based Planning  Part 3

“The Siren Call of the Questionnaire”

In an earlier post I wrote that “values-based planning” is founded on the notion that each client has a personal set of values that should be ascertained early in the planning process and then used to fashion a financial plan or estate plan unique to that client.  Most enlightened planners today would concur that financial and estate plans based on client values are far superior to the “one-size-fits-all” cookie-cutter plans that many of us grew up doing.

The question with regard to values-based planning is not whether we should create plans based on client values.  The answer to that one is duh-obvious: Yes.  The issue is not WHETHER we should do values-based planning, but rather HOW to do it so that it actually works.

In other words, how do we respectfully and accurately ascertain each client’s unique and deeply-held values upon which their planning will be based?  What methodology will allow us – and our clients – to look into their hearts, to see there what truly matters, and to then discern how to create a plan with them based on what we have discovered?

Unfortunately, the widely-heralded “values-based planning revolution” has been in my view a case of one step forward, two steps back.  This is largely because in nearly every instance what started out to be “values-based planning” quickly morphed into what I call “questionnaire-based planning.”  Indeed, with a few notable exceptions, virtually every so-called “values-based” approach is designed to be implemented by means of a cleverly designed, carefully worded questionnaire.

I think that is a tragic turn of events, and here’s why:

A.  Questionnaires are blunt instruments that deliver cut-and-dried, categorical answers.  As a result, they seduce planners into seeing clients as cut and dried and categorical.  But that’s not the way we humans are, especially when we drill down to a values level.  We are not pegs to be pushed into differently shaped holes, or colored bobbles to be sorted into different boxes.  We are each unique.  We are full of nuances, contradictions, uncertainties, and places where the lines are blurred.  We don’t fit into four or five neat categories, as most questionnaires require.

Some would argue that being able to offer clients a plan based on which one of several categories they fall into, as determined by their questionnaire responses, is substantially better than the old “one-size-fits-all” method of planning.  While it may be an improvement, it is not true values-based planning.  Offering clients a choice of cookie cutters is still cookie-cutter planning.

B. Questionnaires have built-in biases, which are based on the assumptions and prejudices of their creators. Regardless of whether these biases are accidental or intentional, a biased questionnaire skews the results away from the client’s true values. When you start with untrue assumptions, you always end up with incorrect conclusions.

I have seen long, beautiful, and well-worded questionnaires that were supposed to assess a client’s values and direct the planner to the type of plan the client needed.  Oddly, it seemed that nearly everyone using that questionnaire was steered toward essentially the same plan, one that favored the aims and products promoted by the questionnaire designer.  It seems to me that when everyone gets the same answer, maybe the questionnaire is asking the wrong questions.

C. Questionnaires can be “gamed” by clever clients. The process of answering questions in a questionnaire invites clients to consider not just their answers, but the impact of their answers on the planner and the planning process.  “Will this answer raise or lower the fee?”  “Will this answer make me seem more wealthy or less wealthy?”  “Will this answer cast me in a negative light?”  “Will I appear miserly, judgmental, prejudiced, immature, or short-sighted if I answer that way?”  “Will I be exposing my weaknesses, and will that allow her to take advantage of me in some way?”

Human nature being what it is, the odds are high that clients’ responses will be less than candid and unguarded.  Consequently, there is a high probability that questionnaire answers will be scrubbed, distorted, shaded, or flat-out wrong.  This makes the results of a questionnaire unreliable as a basis for serious values-based planning.

D. Questionnaires lead to dull, inattentive planners.  Questionnaire-based planning doesn’t require planners to listen deeply and attentively to clients, to ask insightful questions, or to employ judgment and wisdom to discern how to weave the client’s life-lessons into the plan.  The “correct answers” or the client’s “categories” just “magically” pop out from the responses.  Yeah, right.

True values discovery requires careful and attentive listening.  Each client and the stories they tell are alive with insight and meaning.  They are full of clues and pieces of answers.  Real people living real lives are like that.  The right answers don’t just pop out; they have to be teased out and then pieced together like a jigsaw puzzle.  But when you make a commitment to discover for yourself – and for the client – a clear and complete understanding of what’s really in their heart, their deepest purposes for planning, you discover that the results are unquestionably worth the effort.

E. Questionnaires don’t lead to values-based planning. Questionnaire-based planning is neat, clean, analytical, and easy, but it is incapable of drilling all the way down to the values-bearing strata deep inside the client.  No matter how cleverly worded, a questionnaire can never respectfully and accurately ascertain each client’s uniquely personal values.  The results are too shallow and mechanical.  The intention may be right but the methodology is wrong.   Thus, whenever planning becomes questionnaire-based, it ceases to be truly values-based.  I call it “faux values-based planning.”

Please understand that I believe there is an appropriate role for questionnaires in the financial planning and estate planning process, which is to help gather data.  I have no problem using questionnaires as fact finders.   They just don’t work to discover and discern significant client values.

So What?

“So what’s the harm,” you may ask, “in doing questionnaire-based planning?   It’s definitely a lot better than the old way we used to do it.”

The most significant harm is that when financial planners and estate planners – even smart, sincere, and well-intentioned planners – think they are doing values-based planning but are only doing faux values-based planning, they stop seeking the real thing.  They become enamored with zirconium and fail to find the acres of diamonds just over the next hill.  They take the shortcut and never realize they just missed the best part of the journey.   As a result, they rob themselves and their clients of the magnificent experience of true values-based planning.

Good is the enemy of great.

The moment earnest planners apply the label “values-based planning” to something that is not and once they start to believe they are doing “values-based planning,” even though it is really only the “faux” variety, they lose the sense of urgency to discover the real thing  and are unable to see the need to do more.  Once they get locked in, it is nearly impossible to unlock them.  As a wise person once said in another context, “the problem is not what they don’t know.  It’s what they do know that just ain’t so.”

Values on the cheap vs. paying the price

While questionnaire-based planning may appear neat, clean, analytical, and easy, it is really only values-based planning on the cheap.  The real process of values discovery – like virtually every other authentically meaningful human endeavor such as nurturing a fulfilling marriage, raising independent children, growing a beautiful garden, or building a success business – can be disorderly, messy, intuitive, and sometimes challenging.  It requires real work.  It requires that we pay the price to come to know, really know, our clients.  It cannot be achieved with clever techniques.

The Solution

To move into the beautiful new world of true values-based planning, the solution is not to try to come up with a more artful questionnaire.  The solution is to recognize that their stories — the oldest and most natural form of human communication – are rich and ripe with the unvarnished truth about our clients’ values.  We just need to ask the right questions and then listen, really listen.

I have found that the best way to genuinely understand our clients and their values is to ask them thoughtful and insightful story-leading questions in an appropriate setting and then settle back and listen to their answers with all the love and attention and encouragement we can muster.  I have learned that who they are and what they deeply value are woven into the stories they tell and can be discovered by a caring advisor.  That is the essence of what I call “Story-based Planning in a Thinking Environment.”

How to do that gracefully, effectively, and affordably is the subject of my next post.

Scott Farnsworth, J.D., CFP is an attorney and Certified Planner with more than 30 year in the estate, business, and financial planning fields. He is the CEO of SunBridge, Inc. and the founder of the SunBridge Legacy Network. He is a nationally recognized author and expert on practical, holistic, family-friendly planning. Scott was recently named one of Financial Advisor Magazine’s ‘Innovators of the Year.’

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