How to Turn Death and Financial Loss Into Client Wins (w/ Yohance Harrison of Money Script Wealth Management)

Watch the Webinar Recording ("How to Turn Death & Financial Loss Into Wins")

Start By Getting Comfortable with Being Uncomfortable

When you start your financial planning career on September 12, 2001, like Yohance did, talking about risk comes easy. "Talking about risk was all I knew how to do," he says.

For Yohance, the awareness of risk became all too real starting in 2011 as he and his wife both experienced losses of their parents and grandparents, respectively. "All four of them passed away without an estate plan."

He continues:

"I did have to worry about writing some checks. I had to pony up the dough to help get my parents cremated and have a ceremony and all that fun stuff. I shouldn't call it fun. It wasn't fun. My wife's grandparents, so I sat down with them and had a conversation about estate planning in 2010 and they didn't do anything about it. And then grandma passed away. I had the conversation with grandpa. We call him "Poppy," had a conversation with him at least a dozen other times. And he passed away with his estate plan on his desk with Post-It notes on it, with questions that he had about the plan that were left unanswered.

His assets were in probate. For seven years, tens of thousands of dollars back and forth, the court fights and disputes between the family — that all could have been resolved. As a matter of fact, his questions weren't really questions. They were just comments. He could have signed it just as it was."

Having had enough, Yohance realized there was only one way to power through these uncomfortable experiences for his clients:

"From those experiences, I said, 'I'm not doing this anymore. I needed to get uncomfortable.' Or excuse me, I need you to get comfortable with being uncomfortable with having those conversations."

That's what this webinar and guide is about.

In our latest customer + partner spotlight webinar, Chris Quandt (Success Enablement Manager at RightCapital) and Matt Morris (CEO of EncorEstate Plans) asked Yohance (CEO and Comprehensive Financial Planner at Money Script Wealth Management) to share his stories of loss, and how you can leverage your own experiences to help educate and prepare your clients to handle risks stemming from financial loss and death.

Here are the takeaways:

Lean Into Your Experiences and Just Ask Clients About Their Estate Plans

You might think you don't have a story to share about loss. But as Yohance rightfully points out, "We all have a parent or grandparent or aunt or uncle that is no longer with us."

And from those stories of loss come the opportunity to teach and help clients with their estate plans and financial portfolios (and lest we forget, people always love hearing stories). As a forcing function, this will help you have the estate planning conversation with clients.

This is exactly Yohance's approach:

"So what I started doing early on was just sharing my story and just sharing what I had to go through (burying my parents), what Alicia had to go through (burying her grandparents), the aftermath of it. And then just posing the question to the client ["What does your estate plan look like?"]. 'Okay, we can't avoid people from fighting, but we can reduce the amount of stress and the lack of paperwork that needs to be in place.

We can do, there's some of those things that we can put in place. Are you open to having that conversation and putting in place? At the end of the day, it's just like either you're going to have a plan or you're not. And if you're working with me, Mr. and Mrs. Client, we're going to have a plan.'"

How Your Clients Can Do Estate Planning: DIY, DIT, and DIF(U)

So how do you make sure your clients have an estate plan?

Yohance recommends outlining these three options for your clients:

Option 1: DIY (Do It Yourself)

This is self-explanatory, and it's a popular option with many clients. But as you've likely seen, this doesn't solve the problem of procrastination that ensnares clients time and time again.

Oftentimes, it serves as an opportunity for you to ask clients about their DIY plans (e.g., "How's that working out for you so far?")

Option 2: DIT (Do It Together)

This option is the one Yohance uses given that it places him, the trusted advisor, at the center of it all for his clients. The "Together" part refers to:

• Your client, who needs and wants guidance on ensuring their legacy for their families.
• You, the advisor, who's driving everything from start to finish for your client.
• EncorEstate Plans, the back-office partner with both its software to create estate plans and team of estate planners.

In fact, Encore's Estate Planning Support team ensures every estate plan is reviewed end-to-end, and that all corrections and clarifications needed are surfaced to advisors before the plans get signed and funded.

Option 3: DIF(U) (Do It For You)

This last option involves having an estate attorney create and complete the estate plan for clients (hence the "Do It For You").

The tricky part with this option is that clients tend to procrastinate (hard to blame clients for procrastinating when you ask them to think about their own demise), leaving them more often than not with no estate plan. Or, leaving them with incomplete estate plans where all they needed to do was just sign the papers.

Whichever option you and your clients end up choosing, Yohance cautions:

"You're going to have to have some uncomfortable conversations."

Always Ask Clients About Their Estate Plans

Asking clients about their estate plans (and whether they're up-to-date) is part of Yohance's financial planning workflow. Whenever he engages new clients, Yohance always asks these two questions:

• Do you have an estate plan?
• (if yes) Do we need to revisit it?

From there, he follows clients' leads based on their answers, and takes action from there.

How to Broach the Topic of Financial Loss for the First Time

Here's Yohance's process for broaching the topic of financial loss:

Step 1: Start By Asking  Clients Questions You Already Know the Answer To

"I like to begin with asking questions that I already know the answer to, but I just want the client to affirm it."

He kicks things off with Nitrogen's Risk Questionnaire, asking, "Do you have a method to measure your risk across all of these portfolios?"

According to Yohance, 9 times out of the 10, the client's answer is "No." Or, they ask, "What do you mean?" He then reminds the client of their retirement timeline (e.g., "I know you have a goal of retiring in 15 years.") and continues with his line of questioning:

"Are you confident that the risk that you're taking in your portfolios is going to get you to that goal?"

The answer is more than likely going to be "No." And if it's "Yes," that's great! But, that's probably overconfidence on the client's part. To which you then ask, "Can you show me why you're confident?" Clients typically aren't able to demonstrate what makes them confident about the risk in their portfolios. 

 "From there, the conversation with the client is, 'Look, I want to create a baseline for us to be able to have a conversation, not just about your risk tolerance, but I really want to talk about your loss tolerance, because that's what this risk conversation is really [about].'"

Step 2: Get Agreement with Clients to Build a Common Language Talking About Risk

The Risk Number that comes from Nitrogen's Risk Questionnaire is a great starting point for getting on the same page with your clients and their needs. It also highlights any financial education gaps that you, the trusted advisor, need to fill in for your clients.

Once you get agreement, change the word "risk" to "loss" (the meaning and power of words always matter!) and take them through the Questionnaire. After they do the Questionnaire, "That's where the fun begins" according to Yohance because you can see all of your clients' financial accounts and start probing them on what's an acceptable threshold of loss based on their Risk Number.

"So now we can talk about where where we have this commonality so that my phone doesn't ring at 8:30am (well, for me) when the market opens and it's down 10%, 15%, 20%. I'm sorry: I'm not answering the phone. I'm not available; I just can't. So we have to set these baselines first and don't worry."

Step 3: Check In with Your Clients Once a Quarter About their Risk Number

Yohance will send a two-question questionnaire every quarter to his clients asking to see how their risk / loss attitudes may have changed. And based on the answers to those questions, he'll make adjustments if needed.

But other than that, he assures his clients that he's going to continue doing everything he can to make sure his clients' portfolios are in alignment with what they said their risk and loss tolerances are, in addition to being in alignment with reaching their financial goals.

And the best part is, you don't need to pull up standard deviations and Sharpe ratios, explain those to your clients, and then try to have them understand how you're managing that risk.