Advisors Focus on the Values of Money
In the often buttoned-up world of financial planning, Ross Hoffman of Hoffman & Associates in Ventura doesn’t sound typical.
He uses words like “spirituality” and “emotion.” He talks about hopes and dreams, virtues and values. He mulls over the issues that have fascinated philosophers for thousands of years.
What is your purpose in life? he asks.
Hoffman, a gray-templed man with a small-town charm, doesn’t care if you call it touchy-feely. It is, he says. But there’s no reason such questions can’t leave the therapist’s office and drop into the financial world.
“These are the things that are important to people,” he said. “I expect a strong emotional response from them.”
In the last several years, a new breed of financial planner has sprung up in Ventura County and around California. They work with the typical tools of the financial trade--the calculator, charts and tax tables. But a growing number are spending time ironing out relationships and digging into a client’s spiritual and emotional well-being before they hit the tax books.
The financial-planning business is booming, and that’s part of the reason some planners are doing more than feeding numbers into a computer and handing over a printout to clients. The rise of the Internet and more sophisticated software has required planners to do more for their money, as consumers become more sophisticated and question what their money means for them, observers say.
And more and more people are getting rich, riding the late ‘90s stock market wave. As a result, concerns have changed.
“The problem used to be, ‘Am I going to have enough money?’ ” said John Grace, president of Investors’ Advantage in Westlake Village. “Now it’s, ‘What am I going to do with it when I die?’ ”
Hoffman, for instance, is studying to become one of a cadre of “family wealth counselors,” estate planners who help the wealthy leave their money to charity, minimize their estate taxes and decide how much to leave their children.
He will set up a retreat at a client’s home--for $5,000 to $10,000--where he will help fashion a kind of life manifesto. He will ask the tough questions. What really matters to you? What will your legacy be? What are the special things about your children? How do you want to be remembered?
It can be exhausting.
“A client who had disinherited his children just began to cry” during a session, Hoffman said. “Another financial advisor couldn’t handle that. We want to confront it.”
Bruce Wright, a financial planner with Macrostrategic Design in Simi Valley, takes some of his clients on a kind of meditation trip to discover what’s important. Close your eyes, he says. Imagine you’ve discovered a suitcase with $100 million. What do you do with it? What’s your first instinct?
Like Hoffman, he admits that kind of thing can rankle some mainstream planners.
“Look at the personality types drawn to those careers,” Wright said. “They’re left-brain dominant” and thus more inclined to facts and figures than emotional issues.
“When you start asking somebody what their dreams are, that’s entirely a right-brain series of conversations,” Wright said. “Professionals tend not to think that way on their own.”
Planners say that many people are far more interested in passing on their values than their money. That means many of the wealthy have to ask serious questions about how much money they want their children to have. How much can they inherit and still be motivated? How much will ruin them?
“We had a guy come to us who wanted to set up an education fund for his child,” said Grace. “We talked about his youth, and it turned out what he really cherished was the experience he had sailing around the world.”
So Grace set up a sailboat fund.
Of course, financial planners have always asked questions of their clients. That isn’t new. What is new is their depth, observers say.
“That kind of thing is still a little bit on the edge,” said Randall Sanada of Alliance Financial Group in Westlake Village. “At a [first interview], we let them tell us about themselves and their goals. We don’t ask pointed questions. We get a handle on the social style, and that tells you how to provide them with the right amount of information.”
In Hoffman’s case, he says such soul-searching does more than help multimillionaire clients reach their financial goals. It gives them peace of mind. “What’s wealth?” he asked. “Is it more money or feeling better about yourself?”
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