Leaving a Legacy That Goes Beyond Money
Lights! Camera! Financial planning?
Financial planners -- the people who convinced Americans that they would need more than $1 million to retire and at least $200,000 to send each kid to college -- are now telling the world that there’s more to life than money.
They’re even bankrolling a movie -- and marketing a book -- to promote what the industry likes to call a cultural shift. The theme of the movie? Money is the least important thing you’ll leave your heirs.
“It is ironic,” said Rick Eldridge, producer of “The Ultimate Gift,” a $10-million independent film financed by a group of planners and promoted by their industry’s biggest trade group. “But it makes some sense if you think about it.”
Experts have long maintained that the best planning is holistic, connecting the strategies used to achieve a client’s financial objectives with his or her morals, values and life goals.
But during the stock market boom of the 1980s and ‘90s, financial planners became focused almost solely on calculating how much money a person needed, say, to retire comfortably -- and pitching investment products designed to meet that goal.
“Historically, planners have focused on the value of what their clients own,” said Scott Fithian, a “life planner” with Legacy Cos. in Hingham, Mass. “What they are beginning to recognize is that it’s more important to focus on what their clients value. It’s changing the whole industry.”
The mission, he said, is to go from an industry “ensnared in strategies, tactics and tools” to one that’s about mission, vision, values and goals.
From the consumer’s standpoint, the differences may appear subtle, said Brad Konopaske, a certified financial planner at Empire Asset Management Group in Albany, N.Y.
The aim is still to make sure clients have enough money meet a desired goal, such as saving for retirement or college tuition, he said. But holistic planners try to achieve a deeper understanding of their clients’ lives, because financial goals sometimes sound similar when they’re not.
For instance, two clients may have what appears to be the same objective: saving enough money to finance their children’s college education.
But Client A sees education as an essential, life-enriching experience from which the child should not be distracted by money concerns. Client B believes education is simply a means to an end, which is to make the child financially self-sufficient.
Given those differing outlooks, Client A should set aside more money and invest it in dedicated college accounts that couldn’t be tapped for other purposes without penalty. Client B, on the other hand, probably should avoid dedicated college accounts because the client might just as happily use the money to finance an entrepreneurial venture for the child as to pay for college tuition.
Traditionally, planners didn’t ask enough questions -- or the right questions -- to differentiate between these two clients, Fithian said. As a result, identical advice might be given to achieve what are actually very different goals.
“More and more people are beginning to understand that a great answer to the wrong question is useless and expensive,” Fithian said.
Although the planning industry may have reached a tipping point at which an increasing number of planners are looking for customized answers to deep-rooted questions, clients are sometimes a problem. The reason: When they go to a planner, clients expect to pull out financial statements and run through numbers and investment options, not talk about the dreams they have for their lives or their children, Fithian said.
Planners decided that they needed a cultural shift to get clients to open up. That’s where “The Ultimate Gift” comes in.
The novel by Jim Stovall is about a billionaire named Red Stevens who realizes at the end of his life that he has destroyed his family by bankrolling their every desire. He vows to teach his nephew about friendship, gratitude, charity and the value of hard work through his will, making his bequest contingent on the nephew’s performing a yearlong test under the supervision of his lawyer.
The Denver-based Financial Planning Assn. has spent $50,000 distributing copies of the book to members and has worked out discounts for members to buy it for their clients.
A company set up by Fithian and other planners also developed a workbook that planners can use to get clients to open up about the emotional side of their financial lives.
Eldridge is in the final stages of filming the movie version of “The Ultimate Gift,” which he hopes to distribute to theaters nationwide at Thanksgiving next year.
About five dozen financial planners flew at their own expense to North Carolina to serve as extras in a cemetery scene, where the fictional billionaire, played by James Garner, is being buried. Before the official release next year, planners will start setting up private screenings of the movie -- which also stars Brian Dennehy and Lee Meriwether -- for their clients.
“Most of us didn’t grow up in environments where sharing deep, innermost feelings was acceptable,” said James A. Barnash, president of the Financial Planning Assn. in Denver. “But money is a tool. It can be a tool for good, it can be a tool for evil. It can be a benefit, it can be a waste.
“It is the FPA’s great hope that, with the release of ‘The Ultimate Gift’ in theaters, we can begin to change the general public’s perceptions of wealth,” he said. “The idea is that wealth is more than money.”
*
Kathy M. Kristof, author of “Investing 101” and “Taming the Tuition Tiger,” welcomes your comments and suggestions but regrets that she cannot respond individually to letters or phone calls. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof@latimes.com. For previous columns, visit latimes.com/kristof.
