This article article was published in the "New Rochelle Review" in the July 2005 issue.

“Life And Money”  TM –  Financial Planning with Heart - Part 2

By Frank Sisco, CPA, PFS

In last month's column, there was a discussion of the significant role of emotions in effective financial planning.  If the heart does not show leadership over the head, the individual's true goals can be missed by a long shot, even when financial advisors are involved. Covered in that article was the family profile and how some advisors use it as an important tool in uncovering a person’s particular situation, especially those who are middle aged or older.

A second tool used as part of the financial planning process is storytelling.  Because good financial planning involves making sound financial decisions based on the fit of the financial environment with key strategies and one's own circumstances, the better the fit, often the better the results.  Stories help get the right fit.

Let's first look at when you try to get this fit on your own without the direct help of a financial advisor.  Like most, you probably learn new information, especially complicated financial information, when it is in an accessible, easy-to-understand format, which is often a rarity.  Engaging stories told by real people of their life experiences (e.g. building a very successful business, losing a large portion of life savings through inappropriate investments, or rectifying decades-old family animosity over financial matters) are understood and retained better than are dry articles of technical information loaded with graphs and charts and esoteric concepts.  In addition, for many people, the richer the medium the more enhanced their understanding.  A financial-related story conveyed by a celebrity in a polished television show beats out a news article void of personality.  Engaging retained information can lead an individual to make meaningful positive changes in their lives.

When you are getting the help of a financial advisor, storytelling plays an important two-way function. One way is you to the advisor. In order to communicate information about yourself that the advisor needs to help you through key decisions (e.g. your feelings about family responsibilities, phobias about risk and loss, internal need to excel, compulsions to spend, etc.), you should tell the advisor compelling stories.  For example, it is not enough to tell your advisor you have a moderate level of risk tolerance. Moderate is vague.  You need to tell stories about situations in your life involving risk-taking and discuss your feelings about them.  The advisor then gets a much better idea of what moderate means for you.  This way the advisor retains interest in your special circumstances and tailors personalized ideas and strategies for you and your family. The second way is the advisor to you. The advisor does not need to be an accomplished filmmaker, television talk show host or radio star to make a lasting impression on you, but should have the ability to keep you interested and involved throughout the entire financial planning process by telling engaging pertinent stories, which contain important clear lessons about life and money.

Lively engaging stories, supported by real facts and research, can go a long way in helping you realize your financial goals.

About the author

Frank Sisco is a CPA and Personal Financial Specialist, and author of several articles about personal finance and issues of life and money.   His firm, Financial Management Corporation, is located in Harrison, NY.  Frank makes his home with his wife and daughter in New Rochelle, NY.  He can be reached at 914.381.3737 or by email at ideasmoney@aol.com, or visit his website at www.LifeAndMoney.com.

Submitted 7/7/05, 12 noon