Michelle Smith is the CEO of Source Financial Advice, a specialist independent advice firm offering comprehensive wealth management and investment planning to high-net-worth women - specifically those who have divorced.
Divorce isn’t easy for anyone. But it particularly impacts women, with divorced women over 50 facing a 45 percent drop in their standard of living.
Michelle and her team of advisors are on a mission to support women as best they can during this difficult time. Finding ways for their money to empower them to live the life they’ve always dreamed of.
“I think that, in any profession, when you can find the intersection of life experience, what you're naturally good at, and the market, it's a really good recipe for success. As a financial advisor, it's so important because it magnetizes the market when you can find that natural niche. And it has such a resonance with clients that it is your differentiator,” said Smith.
Let’s dive in.
Discovering the power of personal values
This story comes from using Lumiant with an existing client we’ll call ‘Wendy’.
Divorced for eight years, Wendy is now retired with no income, having had a successful career in the medical profession.
“What we noticed over the years of working with her is that her non-negotiable is travel. With no children of her own, Wendy often took trips to see her extended family, whether it was brothers, sisters, nieces or nephews.” “And although we knew her really well, we really didn’t understand the underlying reasons why travel was so important beyond the need to stay connected with family. And we couldn’t understand how she was giving herself permission to spend on travel, yet would not spend in other areas of her life, even though she could afford to.”
That was until Lauren - Source Financial’s relationship manager - and Michelle took her through the Lumiant process.
During their 90-minute values session, Lauren and Michelle uncovered an incredible story from 50 years ago that had completely dominated Wendy’s financial life.
“During the session, she told us this story of remembering saving her money to go to the store to buy the Barbie she had always wanted with her Grandmother. What she discovered was this experience had driven home the family ethic - you have to work it to get the things you want - as she wasn’t given the toy but instead had to save for it,” said Michelle. “How that one story from 50 years ago has manifested itself in her life is she doesn’t spend frivolously on material things. But what she does spend on is travel.”
In fact, Wendy wasn’t touching a significant proportion of her monthly sustainable withdrawal rate and was at risk of being overfunded in retirement.
The values session - or what Wendy called “financial therapy” - allowed the advisor to understand what was driving her financial behaviors.
Reflecting on her past allowed Wendy to breach a mental barrier and permit herself to spend her untouched funds meaningfully on other areas in her life.
“What's come out of it for her is intentional philanthropy. And this is a really cool pivot,” said Michelle. “She really wanted to gift [the unused funds] to her nieces and nephews right now. And she was like, wow, that money will change their lives right now.”
The values session has been incredibly important to Wendy in helping her articulate the meaningful outcomes that she wanted to achieve in life. Not only that, but Wendy is now more transparent with her advisor, opening up and expanding the opportunities her advisor has to serve.
The best bit: when you give people the agency to co-create their plans, setting the stage that empowers them to piece together their best lives, they are more likely to follow the plan.
Michelle’s top tip: Let the client do the talking
As advisors, we're natural salespeople. We're so used to talking and having the solution before we’ve even received all the information that we often get to the conclusion without taking the client on the journey.
“The first time I used Lumiant, I was too directive. I was shaping answers and it was almost like they felt like they needed to say certain things because I was guiding them there and they didn’t want to say something “wrong”. And that's huge. People don't like to be wrong. They like to know that what they want to achieve is “normal” behaviour. Do others feel like this? And I was guiding it and directing the conversation so much that it was changing the outcome.”
Michelle’s advice: don't solve a problem that doesn't exist yet. Don't assume what an answer is going to be. Don't over-engineer the meeting. Let them talk. Just ask the open-ended question.
Once they’ve picked a value, that’s when you say: Wow, talk to me about that; What does that mean; or that's really cool, tell me more.” Then shut up. Michelle even keeps a glass of water in front of her and drinks it so she doesn't open her mouth.
The Lumiant process lends itself to the client sharing. Michelle believes you don't need to over-direct. And, in fact, it'll cause faulty output. It becomes your story, not theirs. So, sit back, listen and let the client define their story, so you can co-create a plan they’ll stick to and guide them to live their best life.