Thanks for your responses to the three cases I shared in this post. Here are my thoughts on your suggestions:

Client #1

Absolutely this clients life style plays a part. However most advisors don't collect accurate cash flow data. For example in the case of this client I had her fill out her expenses, then I reviewed her total net income per month and what was going in to savings. The reason I did that is because what she says she spends, or can think of in many cases don't accurately reflect what she's actually doing. Because my process is so streamlined it only takes me a few extra minutes to figure out over all spending in a case like this. The client is uninsurable but an old fashioned annuity would certainly provide a stable and certain income from her assets. In the end I was able to help her project very accurate expenses and therefore cash flow needs, we segmented her MUST haves including both wants and needs to get her base income need. Her advisor provided an annuity for these needs. Then she and her investment advisor worked to tweak the portion of her portfolio exposed to the market which is where she takes the money she SHARES from. In a bad year she has the discretion to take less, or none, but a bad year will never take the life she wants to live away from her. Great comments on this one.

Client #2

Ha Budget! You used the B word. Budgeting would the most commonly assumed answer but after spending over 10 years watching how clients behave and how budgets work I know this will not be compatible if the goal is lasting success. Instead these folks unified their debt. Did you know that when a client has too many debt accounts the likelihood of them paying them off affectively is greatly reduced? I don't use the term consolidation as the goal there is often to reduce monthly payments not the overall debt. I take advantage of their natural tendencies and put their debt on one place then I make the repayment actions an unconscious and automated part of their plan, and their spending is completely separated and conscious. If this client is to mess up their well built plan it will be ON PURPOSE!
That is good go forward advice on the car but won't change the present. Car debt is the hardest debt to do something about once it's done. These clients as part of their plan were given a very specific formula for how much they could afford to spend on the next car and the earliest year they can purchase to keep their plan on track. By the time they get to their next car I have them set up to pay 50% down, and pay off in 3 years. Then they'll always buy cars in cash from that one on.

Client #3

You are right that advisor did mess up in our view, but when I asked him about it and then listened closely to both his language and that of the client I could see what was going on. He collected debt data (only asking about mortgage debt/client only offered mortgage debt) early on. According to the records he had on the client he stopped asking when it should have been paid off, only asking each year if they were still "on track" with their mortgage. He never dug, and the client never gave him full info. They are both at fault. But it doesn't matter who's fault it is, it only matters what they do now. Again this couple needed to unify their debt so they only had one focused debt to repay, and so that they couldn't compartmentalize it in their heads as little pieces of debt but rather be forced to face it as a whole. They too needed a cash flow structure that was compatible with their lives and behaviours I gave them that. They had a tenant paying rent which was a boost to the income but the grown up kids who had no idea of what their parents were going through were big drain. The final step for this couple was a meeting with all adult children and spouses present. I know this isn't supposed to be part of an advisors job perhaps but I knew this was the weak spot for this couple. It was a bell that couldn't be un-rung once they told their children of their financial status the manipulation/crying on their parents shoulders over financial issues would be no more, or the parents would see their kids still asking for help not considering the damage they were causing. Either way getting it out in the open was the only way to go. The parents recommended their children get appointments with me before they headed down the same road. The parents also purchased (from their cash flow and with in their structure) 3 copies of my book $pent, on financial personalties for their adult kids and spouses to help them get started. In the end these two clients were motivated to take on part time work, doing things they love (they should never have retired at 60 and someone had to say that to them), the have kicked my plan in the butt and are ahead of goal buy 2.5 years. The kids aren't bleeding them dry anymore and they talk about finance and priorities over many family dinners which are also done within the guidelines of their cash flow plan!

Debt and cash flow are different then deciding on investments and sticking to it. This part of finance touches your clients far more frequently and the ability to make mistakes is frequent and easy. This is why I created a full day program on how to integrate debt and cash flow in to your business

Thanks again Stephen I loved your comments!

Steph

Client #1
What are this person's lifestyle traits? is she a spender or very frugal? she needs to decide also what types of gifts she wants to give to her family or others.
Perhaps she can set aside a fixed sum and create an insured annuity, giving a certain amount of cash flow whilst guaranteeing a future gift.

Client #2
These guys need to budget and pay off the credit cards, and focus on the credit line. I believe they are possibly living over their income and need to adjust their spending.regarding the auto loan, people should consider purchasing a lease return or a pre-owned vehicle to lessen the cost of ownership and have a recent vehicle at the same time. unless they plan to keep this car forever it seems a little high for auto financing.

Client # 3

Current advisor has made a huge mistake by not following up on their debt and advising them about it (he probably does not have any himself and passes judgement on those that do). Again I believe it is imperative to ask about their lifestyle and create a budget around that... their priority should also be to clear or consolidate those high interest credit cards, perhaps using the HELOC as a tool to reduce the interest payments (and destroy those cards!). then have a plan to pay the HELOC down aggressively as well. make a budget for the houshold and determine how much cash flow is required. Have a rent paying tennant in the home would help also pay the mortgage off. for the auto start a small savings account to purchase the next vehicle ( I also am not a fan of auto leases unless there is business or deductability possible) again consider purchasing a pre-owned or lease return. they could consider using a small cash flow from their RRSP but it is preferable to avoid it to keep taxation at bay.

Steph

Listening is a huge aspect of Twitter. Follow the news media, the trade media and other personal influencers. Listen to what they say, stay up to date on news and developments and find great resources in the links people share.

Even if you never said a word on Twitter, there would be huge value in just listening.

Thanks SO much for your comments! I think it is so funny that the regulators/compliance dept's are trying to slam shut gate to social media while at the same time being concerned about transparency? Doesn't open, honest and visible discussion promote transparency? And I find on SM the bull and inauthenticity is very easy to spot, unlike advertisements, or articles written by the legal/marketing departments of a product manufacturer I'm just saying. Thanks again for your comment!

Steph

Its a battle worth fighting but advisors need the ammo and to know it's worth the fight! Everyone will be better served by more great content online and the transparency that proper use of SM can bring!

Thanks for commenting and RT'ing this!

Steph

My favorite part: 'The smart ones still don’t say or do anything stupid on Twitter but they make it clear tweets from that account having nothing to do with their occupation or employer'.

- So very true.

Thanks and keep up the great posts!

@Julie_Meredith

http://www.radian6.com/blog/author/juliemeredith