Steven Shagrin remembers attending a seminar for financial planners in 1986 where the speaker insisted that the job of advisors was to "make as much for your employer as possible through fees or commissions – to bring as much money under management or have money-in-motion because it triggers a fee or a commission."

Absent was much concern for the unique needs and situation of the people whose money was generating the aforementioned commissions and fees.

A Changing Profession
A Certified Financial Planner™ who got his law degree in 1981, Shagrin started his career in finance as a tax accountant and then spent 20 years as vice president for investments with Smith-Barney and Paine Webber. Over the past decade, he has taken a more holistic approach to financial advising.

In lieu of selling investment products and doing traditional financial planning, his work now centers on fee-only money coaching, retirement counseling and life planning. He is president of Planning For Life , in Walnut Creek, CA, and is also vice president of the Money Coaching Institute in Petaluma, CA.

Clients now demand more from their advisors beyond recommending investment products; advisors themselves have had to become more consultative. In fact, in their article, "The Changing Role of the Financial Planner," in The Journal of Financial Planning (Aug/Sept, 2009), Lyle Sussman, Ph.D., and David Dubofsky, Ph.D., CFA, state that nearly three-quarters of planners estimate that the time they are spending on whole-person issues versus just finances has increased over the last five years.

Within the same survey – where 98 of respondents were CFPÒ certificants – 90 percent of respondents said that they "always" or "sometimes" "help [their] clients understand how their financial plans may be affected by psychological issues related to the role money plays in their lives (e.g. security, fear, status, self-esteem)."

Now when taking on new clients, Shagrin uses a variety of tools to better understand them. These include the Money Coaching Institute's Money Type Quiz , the Money QuotientÒSelf Assessment, and Money Habitudes™. In his practice, the Money Habitudes cards fulfill a multi-faceted role. They are, on one hand, a trust-builder and conversation starter and, on the other, they are a way for him to more fully understand his clients and their needs

"I don't work in a vacuum," says Shagrin of his people-centric approach. "There's a lot more to money than what's on the surface: how it makes us behave, how it makes us feel and how others' feelings about money impact us as well."

Understanding Clients in Context
But, just because Shagrin wants to really understand his clients and their financial situation, that doesn't mean that a new client is equally as eager to delve into his or her finances. Sussman and Dubofsky write that, "Money is a taboo topic for many, not easily discussed, even among family members."

Further, they cite the work of George Kinder and Susan Galvan (2006) to note that "money represents security, self esteem, ego, and other significant psychological needs, often manifested in secrecy and denial." Thus, when clients are faced with discussing their finances with someone they've often only just met and barely know, it makes for a difficult, complicated conversation for any financial advisor.

"It [talking about money] is not really an easy thing to do and Money Habitudes gives you a safe way of being comfortable," says Shagrin.

He notes that typical client-advisor meetings can feel uncomfortable, awkward and boring to a new client. If a client is asked for much in the way of get-to-know-you information, it's usually via a battery of questions, either as an interview or a test-like questionnaire.

The usual process of getting to know one's client is "woefully pitiful" says Shagrin. "On a new account form, they only require you ask: what's your net worth, what's your liquid net worth, how long have you invested in these different areas, and what's your employment situation and tax rate. It doesn't really ask how you think about money, how you make money decisions." Even if people aren't inherently comfortable talking about what they have and how they use it, they do want to feel like they're understood when it comes to entrusting their life savings to someone else.

Using Money Habitudes with Clients
Shagrin will have new clients come in and get them started with Money Habitudes, usually the standard solitaire activity. Each person gets a deck of cards to sort at the same time. While his clients are sorting the cards – usually 15 minutes or so – and deciding which statements correspond to how they relate to money, he will use the time to review their file.
 
"It helps the planner understand where the client's mindset is so they can begin to explain their service offering from a perspective that's acceptable and understandable to the client," says Shagrin. He also pays attention to red flags in this discussion because they may indicate the person may not be a good fit for him and his practice.

"From a financial advisor perspective, where they [Money Habitudes] are very helpful is you know your client even before you decide to take them on."

For example Shagrin recalls one female client whose Money Habitudes card sort revealed an equal split with four cards each in Status, Targeted Goals, Security and Selfless. Not surprisingly, the "story that came out was one of total frustration and total paralysis" when it came to her managing her money, which is what she hoped Shagrin would be able to help with.

Among other pieces of her financial puzzle, she related that she had been in real estate but quit and started working in a nursing home because the market was so bad; she'd been divorced for two years and the retirement funds from her settlement had dropped precipitously; and her son was now returning to school and she wanted to help with his tuition.

"Every time she got a dollar in her hand, she was torn about what to do," says Shagrin. Because she had a comfortable framework to help her share her story, and because Shagrin could interpret her history within a financial context, he could approach her situation in a way far different from how he would have handled the same client if he were only working with a spreadsheet detailing her assets.

However, that's not to say that Shagrin only finds value in the cards during a first meeting. After working for more than five years with a couple in their late 70s, Shagrin used Money Habitudes to break a logjam in their planned giving and estate planning. Although they'd been married for more than 40 years, had plenty of money, and believed themselves to be very financially compatible, Shagrin asked them to try working with Money Habitudes.

Shagrin recalls that both had a strong, dominant Habitude of Targeted Goals. In fact, they both identified with eight of the possible nine cards in that category, seven being common to both of them.

"You can't get much more compatible than that on your primary [Habitude type]," says Shagrin, "but their secondaries were very different." That's where he then focused his attention to resolve their impasse.

Her second-most-dominant Habitude was Selfless. She felt strongly that she wanted to help their grandchildren pay for college. By contrast, her husband had been through the Great Depression and saw his family lose everything not once, but twice. He was very hesitant to part with his money – even though the couple had more than they'd ever need.

"It was only by doing Money Habitudes that I was able to help them understand their differences. His secondary came out as Security and it was very strong on Security. When we started talking about the story behind that, that's where it [his fear of not having enough money] came out and if I hadn't used the cards, I don't think that story ever would have come up," says Shagrin.

With this context for their disagreement in their estate planning, the husband and wife were able to better understand each other's motivations and Shagrin could frame a plan that appealed to both of them. Once he showed the husband how some giving options would affect the couple's long-term cash-flow and cash-balance position – in order to satisfy the security need the client felt – the couple came to an agreement to give $10,000 a year to each of four grandchildren. "It put him in a much greater piece of mind," says Shagrin.

Dealing with Non-Financial Issues
Whether it's estate planning, planned giving or another facet of a client's financial affairs, the cards help identify underlying non-financial issues in the family dynamic: divorce, health problems, trust and esteem issues, etc. The survey done by Sussman and Dubofsky found that approximately one quarter of the financial planner's job is now devoted to non-financial coaching. While planners are not expected to be therapists, it's still important to be able to see the complete picture and understand how non-financial factors affect a client and his or her financial decisions.

"If you're in a relationship where you and your spouse don't get along, just being in the same room with a planner talking about money, they may clam up," says Shagrin. "I've been in circumstances where the husband did all the talking and the wife said nothing and then when I asked for some time alone, I'd ask her, 'What's going on?' and she'd say, 'He's awfully controlling.' I didn't know how to deal with that then. Now I can bring out something [Money Habitudes] and say, 'This is interesting – there's a disparity here. What can you tell me about that?' It makes it non-threatening because it's an independent perspective from which they can view their present reality."

In one such case, Shagrin was working with a separated couple contemplating divorce. The husband owned two sports bars and identified with Free Spirit and Spontaneous cards; his wife was in nursing school and identified with Targeted Goals and Security. As they explained their financial goals, the husband recounted a childhood where his father would come into money, lease a Cadillac and take the family to Florida, followed by much leaner years.

"He learned: when you have money, you use it; take advantage of it because you never know if you'll get it again, so live for the moment," says Shagrin.

His wife grew up with alcoholic parents and had to steal from their wallets to feed her siblings. "For her, having money in reserve was one of the most important things and knowing where it's going to come from and how it’s going to be spent was so tied to her core survival."

"They each found in the other person what they wanted for themselves until it began to drive them crazy, 15-18 years into the marriage," says Shagrin, who says Money Habitudes gave them a new perspective. "Instead of fighting [about each other's money habits], they could still disagree, but understand from a point of compassion."

When clients better understand themselves and when a planner can better understand them, it makes for a better interaction. It means a relationship and advice that is more informed, more relevant and, ultimately, more appreciated.