The Financial Colonoscopy

To be better advisors, we have but to ask five penetrating (but lifesaving) questions.

Steve Gresham

Financial Advisor Magazine

February 11, 2020


We talk a lot about how planning is not about products but about offering solutions to clients. The hope is that by presenting them with ideas, not products, we will likely be more successful in gathering clients’ assets. And yet most clients are not getting real financial planning, and most people who say they are planners or wealth managers actually just sell products. Do they lack the skill to be real planners? Or just the will?


My neighbor is a gastroenterologist, and he compares financial plans to colonoscopies: You know you might need one, but somebody has to tell you to do it and it’s not something you should do on your own. The process is painful and you need anesthesia. In fact, you need to set aside a whole day to do it. But in the end, it can save your life.


Good financial advisors save lives, in a way. Perhaps not by facilitating actual breathing and blood flow, but certainly by serving the practical and emotional needs of families by helping them with their income and expenses. In other words, we give them peace of mind. And we do so by inserting ourselves into difficult areas that most clients would not likely go if someone didn’t push them. And we ask awkward and emotional questions.


Compare health to the more abstract concepts of finance and add the equally abstract concept of the future. Human nature in both cases says “avoid,” “delay.” “I’ll do it later.”


Job 1 for financial advisors is to create urgency about these matters. Job 2 is to make ourselves relevant. Planning done right starts with knowing what clients have now and value the most—and showing them how to keep it.


One of the things they likely value is being healthy. But how will they pay for it in the future? And what kind of care do they want to have? There’s a big difference between personalized care on their own terms and standing in line. Do they want independence to live in their own homes or to get around town? Do they like having control of their money? What if they lost control—and independence?


Those are the basic risks you must talk about with clients before you ever talk about the stock market. You don’t need a three-month process of in-depth planning to get to the issue most concerning to each client household.


The very best and most valuable advisors walk right up to these issues with purpose and a plan. They know from their experience that bad things happen to people who are unprepared for these most basic issues of living, which can change drastically as their clients age. It’s the change that both clients and their advisors often fail to manage—until the client faces some dramatic life event that triggers the need to scramble and solve. Everything is OK—until it’s not.


I got a call from a Fortune 100 CEO a few years ago. He was becoming concerned about his 91-year-old father managing his own accounts. There were no other family members on the accounts. This problem shouldn’t have been a surprise to him. One in four people age 65 and older have dementia or Alzheimer’s. Yet the CEO was beginning to worry now? Yikes.


Age is a thief that steals in the night. It sneaks up on you and takes away capabilities you used to have. But it is a stealthy operator that often does its damage undetected—until something dramatic tips its hand—when an aging client falls or suffers an accident or becomes the victim of identity theft or a scam. This stuff happens every day, and advisors truly working for the benefit of their clients and their families know how critical it is to be ready. Denial is not a strategy.


The Big Life Questions


Here are some of the questions you have to ask clients to get to the most intimate aspects of their lives.


  1. “Retirement” is a three-act play. How do clients view the three stages of retirement—1) when they are, as couples, both living robustly, 2) when one of them is not so healthy, 3) and when one of them is no longer living? Some of the smartest older people I know don’t think about these issues.

  2. Where will the clients live during retirement? Aging in place is the runaway favorite plan, but few clients are prepared to do it. Do they factor home equity into their planning?

  3. How will clients pay for medical care and where will they get it? Many presume Medicare will carry the weight, but there’s more to the subject—and some practical issues of getting access to the care they may need.

  4. How will clients get around—especially when they can no longer drive safely? Ten thousand baby boomers turn 65 every day, which means a healthy percentage of them are turning 74. One in four have cognitive issues. Independent seniors with cars, mobile phones and guns present a whole new world of risk to themselves and others. Few families are ready to take away the keys (or the weapons).

  5. Who is responsible for a client’s financial decisions, investments and accounts if they are unable to manage on their own? They might have given the advisor the name of a trusted contact, but that’s a half measure against a growing plague of fraud and scams victimizing clients every day. One big firm I know is thinking about giving every client a monitoring system. That step would easily pay for itself in reduced arbitration alone.


Not every client will embrace the discussions prompted by these questions. Some will resist. Many will not take the time. Many fear their current plans are inadequate. Many are downright scared. Welcome to the world of the gastroenterologist ... not everyone who needs a colonoscopy will get one.


Fintech providers see this planning gap—and the lack of advisor will. The market has been flooded with tools and analytical software that can perform almost any planning function. There are dozens of efforts underway to organize these components into virtual advisors who will offer the consistency and scale needed by the industry. The need to deliver consistent and valuable advice at scale is the “bane” of the industry, as one monster scale broker-dealer president told me.


If the human advisors can’t muster the will to ask the questions for proper planning, there is a big opportunity for toolmakers and robos that can ask the questions. A lot of clients are more comfortable sharing their deepest fears with an online questionnaire than with a person they don’t know very well. Watch this trend grow—it’s already happening among the younger generations.


The advice industry is being tested by the demographic age wave to step up its game. As an industry, we too often work on the issues we see and not the underlying foundational issues of life and lifestyle that will ultimately determine our clients’ success or failure. More specifically, we are unwilling to ask clients the most basic and important questions about their preferences and plans—and then deal with the answers. The advisors and firms who are asking the right questions are earning net new assets at the expense of less “invasive” competitors.


My neighbor didn’t grow up as a kid thinking he’d someday make his living sliding a camera into human bowels, but he’s saved a lot of lives. And has a pretty nice house.