As the advice proposition in retirement shifts away from investment expertise and closer to life coaching, the financial planning industry can benefit from observing practices in the social care industry, according to Jo Fox, founder and director of Strengthening Practice, a social care consultancy group in the UK.
Speaking at the Professional Planner Retirement conference in Sydney during a session called ‘Aged-care maelstrom: using social care theory with clients’, Fox said advisers could learn a lot from social workers.
“Social workers are known for being very, very practical,” she said.
Fox believes that advisers aren’t placing enough value in small talk. The innocuous conversations we have before going through a client’s review, she said, are the ones that really matter.
Advisers should follow the lead of care workers by having structured, deliberate conversations, Fox believes. She explained that social workers don’t have any “idle questions”, and use small talk as a tool to map out the true values of their clients.
“When we ask a question, we want it to work for us,” Fox told the audience. We want the work to be captured and remembered so that we can help people remember why they’re doing what they’re doing.”
Fox believes that social care and financial planning has “synergies”; both use structured, meaningful small talk to get to know their clients and put them at ease, but advisers should be doing it in a more constructive way.
By using intentionally “curious” questions during the exploration stage, she explained, advisers will be more able to understand the future hopes of their clients.
“We all use conversations about families and lifestyle to get them to relax, to feel comfortable and to buy into the advice process,” Fox said. “But we can use them for more than that. Those conversations you have – which [occur] almost as an aside – are conversations that can happen deliberately.
Shared framework
Fox believes much of the accepted social theory framework that social workers use can be applied to financial planning.
She compared standard 6 of the Financial Adviser Standards and Ethics Authority’s Code of Conduct – which compels advisers to take into account the “broad effects from the client acting on your advice” – with the United Nations’ Principles for Older Persons, which Strengthening Practice uses as a benchmark for old-aged client care.
“When you look at standard six of FASEA… in social work we have to do similar things,” Fox said. “What we’ve done is taken the UN principles of the older person and turned that into a kind of how-to-do-this approach.”
Fox explained that Maslow’s hierarchy of needs is another piece of social theory that crosses the two industries.
Social workers and advisers faced the same dilemma, she said; if a client doesn’t have the financial security to take care of their basic needs, it’s difficult for them to think about what they really want out of life.
“Maslow’s hierarchy underpins some of the goal-based planning that is around for you,” she explained. “At any time in someone’s life you can slide down the list; if you haven’t planned for old age or illness, you can become preoccupied [and] it’s very hard to have a useful conversation.”
This becomes especially crucial in retirement and old age, Fox said, when people need to maintain relationships to stay connected. This is only possible when people know their basic needs are taken care of.
“Close relationships – more than money – will keep people happy throughout their lives,” Fox said. “How are they going to use their assets to actually maintain their relationships throughout their lifetime and to keep having choices?”
