Priorities is the name of Concordia’s ongoing financial planning system. It is based on Nobel prize-winning research on the area of behavioral economics. In order to help our clients achieve success in their financial planning, Concordia focuses heavily on the core money values of our clients:
- How money was discussed within the family growing up.
- First experiences (good and bad) with money.
- One’s interactions with money as well as their interactions with others, including family members.
- The primary financial and behaviorally-based rules used to make financial decisions
When we know how a client’s core financial values with money have been shaped over time, it gives us a much better understanding of how we can customize our approach and help our clients succeed through their financial planning. In essence, we can help them more easily find financial harmony.
The process normally starts with a discovery meeting called The Priorities™ Exercise in which we find out the top 5 financial priorities that are top of mind (both by our client and their spouse or partner if they have one). We also help them determine a top 5 list of financial priorities they wish to work on together if married.
We then have our clients provide us Preparedness Scores for each of their top financial priorities. Preparedness is ranked from 1 to 10, 1 being fully unprepared to accomplish their priority and 10 being fully prepared to accomplish their priority. We then ask our clients to update their preparedness scores approximately every six months. This allows us to track client peace of mind with the priorities that are important to them. If their scores for preparedness get better over time, this usually means they are feeling more confident they will success at their financial goals. If their preparedness stays the same or gets worse over time, there’s probably something going wrong…either with our process or an underlying issue at home or work that is keeping progress from being made. Obviously, if it’s the latter, we should be helping our clients address it to help overcome hurdles and continue working towards the financial harmony they deserve.
When we prepare our financial plans, our recommendations are tied directly back to our client’s top 5 priorities. This is partly where the behavioral finance we mentioned at the start of this articles comes into play. True comprehensive financial planning should provide clients with a laundry list of recommendations that cut across all different aspects of their financial life. Some of these categories include but are not limited to:
- Budget and Cash Flow Management
- Debt Management
- Financial Organization
- Distribution and Income Planning
- Investment Management
- Tax Strategy
- Risk Mitigation
- Estate and Gifting
Although financial planners would typically see all the recommendations as being equally valuable, most clients would not. In fact, it would be normal to have clients consider some recommendations to be unimpactful or even boring. Enter in the Priorities™ Exercise and Preparedness Scores!! Concordia takes planning recommendations a step further than most by determining how each recommendation we make impacts your priorities. We then sort them for our clients based on those with the most impact first. The more impact a recommendation has on your top 5 priorities, the higher it would be on the list of recommendations.
This process of “sorting” recommendations helps us deal the financial psychology around getting things done. The more valuable and impactful a recommendation can be towards one’s priorities, the more likely one is to follow through with whatever tasks and responsibilities they have to get a recommendation crossed off the list.
Seems quite simple, but in all honesty, it’s not easy (at least for us). Concordia spent years working with experts in different planning fields to make sure our priority categories aligned as much as possible with the recommendations we make. We spent the time so you didn’t have to. In the end, you get planning through the Priorities™ Process that is provides, in our opinion, the most thoughtful and considerate approach to the things that are important to you. It makes sure that we tackle the recommendations that have the highest impact on your priorities and can be “reshuffled” as your priorities and preparedness scores change over time. Most importantly, we can’t think of a more suitable and prudent way to help our clients find financial harmony.
