As accountants, we prepare tax returns, respond to tax notices, perform audits, and attest to our clients' assertions. All of these are motivated financial institutions, the requirements of third parties: taxing authorities and regulatory authorities.

The personal financial planning process is motivated entirely by the personal needs of the client.

In order for the financial planner to be effective, the process must include listening and feedback. Feedback is accomplished by reacting to statements and behavior. Through this process the planner acknowledges the statements which have been made so the client knows that what has been said was understood. This is accomplished with a simple nod of the head, a hand gesture or a change in facial expression. One technique often used by financial planners is to restate what the client has just expressed. For example, if the client is apprehensive about removing his/her money from a bank account and investing it in the stock market, the financial planner can acknowledge his or her understanding by restating the client's feelings. Repeating the client's thoughts aloud lets the client know that you are listening, that you understand, and that you sympathize with their feelings. To be an effective financial planner you must be a good listener.

The Privacy of Space

Another technique used by financial planners is the utilization of the space between the client. A classic example of space invasion is when a teacher is addressing a classroom and a student is being disruptive or perhaps not attentive. When the teacher approaches, the student feels an invasion of space and becomes uneasy. The result is that the student is brought back into the discussion. Closing the distance between you and your client is an indication to them that you are becoming in tune with their feelings and expressions. On the converse, by increasing the space between you and your client, you may be sending the wrong message.

By selecting the proper words or phrases, financial planners can effectively make a point. During these times of low interest rates on guaranteed savings and certificates of deposit, I receive many inquiries on how to increase investment incomes from those who have traditionally used the banking system as a primary investment vehicle. I use the following statement to get their attention: "Yes, I can direct you to greater rates of return. First, I want you to get accustomed to using the four letter word risk. I then describe the relationship between increased rates of return and increased risk.

A client can better understand certain techniques and concepts if he or she visualizes the problem and solution. For example, you may have to show that retirement benefits can be significantly enhanced only if a restructuring of the portfolio takes place now.

Volume and the rate of speech by a client may be sending a signal to the financial planner. if a client is speaking loud and fast, he or she is probably angry or excited. These emotions tend to impair communication. Good communicators know that it is necessary to reverse the direction of an angry client or group of people they may be addressing. This is done by lowering your voice and speaking more softly than normal. The person you are communicating with, will generally slow down the pace to match yours. If on the contrary, you get a call from an angry client and you try to match his speed and volume, chances are you are going to create confrontation and fail in your attempts to placate the situation.

It is critical that the financial planner realizes that when he or she enters into this type of relationship, clients are going to be sharing an entirely different side. Nothing is sacred. Everything ultimately will be disclosed. This process may include the examination of relationships with children, siblings, and parents. It will also touch upon physical and mental health and marital strength. The planner must be sympathetic and compassionate, while at the same time trying to help the client achieve financial goals.

CPAs are used to deadlines and budgets; however, the financial planner cannot rush an engagement. Initial appointments should be set up for a minimum of two to three hours so that clients can fully express their problems and describe their goals.

The Vulnerable Client

Financial planners have to be very careful not to attempt to force their feelings and opinions on clients. When clients share their feelings and problems, they become vulnerable to the views of the "expert." The financial planner has to probe and attempt to extract what the client wishes to do as opposed to what the financial planner might perceive the client should be doing. At the same time, the financial planner has an obligation to see that the client does not take an inappropriate action.

One of the most important requirements to becoming a successful financial planner is the establishment of the relationship with the client. This occurs in that initial meeting. The more successful the financial planner is at using effective communication skills and being a compassionate human being, the more successful he or she is going to be as a financial planner.

A word of warning is appropriate. The financial planner is in a position of trust. If that trust is ever violated, the professional/client relationship will be severly damaged.