The intent of these profiles at times appears to be trying to soften the language in order to get the same hard facts; and that is, “How much do you have and where is it?”
you are now facing or those you expect to make, and find ways to help you make successful transitions. Please take a couple of minutes to complete this Life Transitions Survey.
6 / Using the Life Transitions Survey 61
FIGURE 6.1 Life Transitions Survey
Anticipate Anticipate Experiencing short-term long-term Work Transitions now (1–3 years) (3+ years)
1. Career change ❒ ❒ ❒
2. New job ❒ ❒ ❒
3. Promotion ❒ ❒ ❒
4. Loss of job ❒ ❒ ❒
5. Job restructure ❒ ❒ ❒
6. Education/retraining ❒ ❒ ❒
7. Sell or close business ❒ ❒ ❒
8. Transfer family business ❒ ❒ ❒
9. Gain a business partner ❒ ❒ ❒
10. Lose a business partner ❒ ❒ ❒
11. Downshift/simplify work life ❒ ❒ ❒
12. Sabbatical/leave of absence ❒ ❒ ❒
13. Start or purchase a business ❒ ❒ ❒
14. Retire ❒ ❒ ❒
15. Phase into retirement ❒ ❒ ❒
16. Other __________________ ❒ ❒ ❒
Financial Transitions
1. Purchase a home ❒ ❒ ❒
2. Sell a home ❒ ❒ ❒
3. Relocate ❒ ❒ ❒
4. Purchase a vacation home/
timeshare ❒ ❒ ❒
5. Re-evaluate investment
philosophy ❒ ❒ ❒
6. Experience investment gain ❒ ❒ ❒
7. Experience investment loss ❒ ❒ ❒
8. Debt concerns ❒ ❒ ❒
9. Consider investment
opportunity ❒ ❒ ❒
10. Receive inheritance or
financial windfall ❒ ❒ ❒
11. Sell assets ❒ ❒ ❒
12. Other __________________ ❒ ❒ ❒
FIGURE 6.1 Continued
Anticipate Anticipate Experiencing short-term long-term Family Transitions now (1–3 years) (3+ years)
1. Change in marital status
(marriage) ❒ ❒ ❒
2. Change in marital status
(divorce) ❒ ❒ ❒
3. Change in marital status
(widowhood) ❒ ❒ ❒
4. Start a family or expect a
new baby ❒ ❒ ❒
5. Hire child care ❒ ❒ ❒
6. Child moving into
adolescence ❒ ❒ ❒
7. Child experiences/special needs (orthodontics,
extra activities, etc.) ❒ ❒ ❒
8. Child education, pre-college expenses
(private school, tutoring) ❒ ❒ ❒
9. Child going to college ❒ ❒ ❒
10. Child getting married ❒ ❒ ❒
11. Empty nest ❒ ❒ ❒
12. Family special event
(trip, Bar Mitzvah, etc) ❒ ❒ ❒
13. Expecting grandchild(ren) ❒ ❒ ❒
14. Grandchildren need help
(education, etc) ❒ ❒ ❒
15. Declining health of a parent ❒ ❒ ❒
16. Concern about health of
a spouse or child ❒ ❒ ❒
17. Family member needs caregiving
18. Concern about personal
health ❒ ❒ ❒
19. Provide for long-term care
of parent, spouse, or self ❒ ❒ ❒
20. Disability/hospitalization
(self or family member) ❒ ❒ ❒
21. Other ___________________ ❒ ❒ ❒
(continued)
Each transition for which clients express concern, the advisor can present a set of questions that will enable the clients to clarify the issues and understand the financial implications. This set of ques- tions is presented as a Life Transitions worksheet. For example, if a client indicated that she is facing a possible or imminent job loss, the advisor can personally ask the questions on the worksheet and advise the client on which services could benefit her during this transition, or send the client home with the worksheet and agree to discuss the answers at the next meeting. In this case, the advisor informs the client of the importance of thinking through all the implications of such a transition.
Figure 6.2 is an example of a Life Transitions worksheet you could use if a client was facing a job loss.
There are numerous benefits to broadening the context of your conversations from financial transitions to life transitions. The irony of this change is that the conversations will end up leading to the same sort of transactions and services you have performed in the past, only now the client is emotionally anchored to the transaction.
It was the client’s life transition that made the financial transaction necessary and sensible. If the financial transaction is made necessary 6 / Using the Life Transitions Survey 63
FIGURE 6.1 Continued
Anticipate Anticipate Experiencing short-term long-term Legacy Transitions now (1–3 years) (3+ years) 1. Increase benevolence
planning/charitable giving ❒ ❒ ❒
2. Give special financial gifts to children (annual gifting,
downpayment for home, etc.) ❒ ❒ ❒
3. Give parental pension
(monthly stipend for parent) ❒ ❒ ❒
4. Develop an estate plan ❒ ❒ ❒
5. Change estate plan ❒ ❒ ❒
6. Develop an end of life plan (funeral expenses, living
will, etc.) ❒ ❒ ❒
7. Other ___________________ ❒ ❒ ❒
© 2001 Money Quotient, Inc.
by virtue of the client’s life transition, the chances of buyer’s regret and seller’s regret are largely diminished. With this approach you have
• displayed awareness of the issues that affect your clients’ qual- ity of life,
• enlarged their perception of the role you play both in the pres- ent and as they face future transitions,
• helped increase your clients’ awareness of the financial impli- cations of each transition they face in life,
FIGURE 6.2 Life Transitions Worksheet Work Transition: Loss of Job
1. Are you contemplating a transition into a new type of career or working arrangement?
2. What are your plans for reemployment?
3. Are you contemplating any lifestyle changes as a result of the job loss?
4. How long can your current savings carry you?
5. Did you or will you receive a settlement or severance package?
If so, what are your plans for it?
6. What arrangements are you contemplating for your retirement assets (401(k), IRA, etc.)?
7. Are you contemplating selling assets at this time?
Financial Implications
• Change in income
• Change in standard of living
• Retirement plan adjustments and transfers
• Insurance coverage review
• Transition cash flow plan
• Impact on retirement plan
• broadened your job description from financial advisor to fi- nancial life planner, and
• removed some of the obstacles that cause clients to compart- mentalize life matters and financial matters.
After working through a Life Transitions worksheet, the client now has a highly relevant context for the many services the financial ad- visor may choose to introduce. In the example of transitioning through a job loss, the client had both the opportunity to talk through her op- tions and to confront the financial implications and opportunities brought to the fore by the transition. The client now understands that going through this transition cannot be compartmentalized from her financial life. There are financial implications to be dealt with.
In the case of transitioning through a job loss, the financial implica- tions include: changes in income, changes in standard of living, re- tirement plan adjustments, insurance coverage review, cash flow planning through the transition, and the long-term financial impact on retirement plans.
As a financial life planner, you also have the opportunity to make other observations or suggestions that might facilitate a successful life transition. Maybe a job loss is a time to sample a new lifestyle such as “downshifting” in order to experience a better work-life balance.
Or maybe this is the time to shift careers. Is there something else the client has really wanted to do? Or if finances permit, you could sug- gest a sabbatical—a time to rest, refresh, and reflect on the next steps.
This process has now given the client much to think about re- garding the impact of life on finances, and vice versa. This contem- plation will help the client appreciate the expertise that a competent financial life planner—a partner, guide, and educator—can bring to the table. The client will want to know what he could (and should) do. The client will need to comprehend obstacles and options. Fac- ing financial implications of life transitions alone is a daunting and draining task, and the odds of dealing with each issue appropriately are negligible. The need for professional financial help is obvious.