Transitions
Have you ever advised a client on the sale of their business and finished the document drafting only to learn the client changed his/her mind? This phenomenon also explains why your estate planning clients don’t finalize their estate plans, and your divorce clients get “frozen” and unable to make a decision. While there could be many explanations for getting cold feet, we know from our Certified Financial Transitionist™ training that there often is an elephant in the room which has not been identified.

Our training in behavioral finance and neuropsychology provides insights and tools designed to discover and work through the impediments to moving forward. We know, for example, that every professional will benefit by managing change before managing the technical solution. In the case of the business owner, the personal side of the “to sell or not to sell” equation is equally as important as the details in the sales contract.

While attorneys typically do not have a business to sell (although there are exceptions), they encounter some similar elephants as they contemplate the implications of their own financial transition toward retirement. Based on my experience advising attorneys over 25 years, here are the top three critical issues facing attorneys as they identify with the possibility of retirement within the next five years.

  1. Family dynamics. Communication styles around money, sharing a joint future vision, both spouses being clear on the financial implications of eliminating a paycheck and related interpersonal issues often are at the heart of the anxieties associated with transitioning from a professional career to “civilian” life.

    These dynamic issues have less to do with money and more to do with stress and anxiety toward the unknown. A tool that we utilize to reduce stress includes the spousal communication tool. We can also determine whether the process has become “stuck” due to some engrained perceptions or concerns over disappointing someone, for example.These conversations do not happen organically – they need an independent facilitator with training based on behavioral finance and neuro-psychology.

  2. The “Late Innings Press”. While not all attorneys I’ve counselled are big risk takers, there is a tendency if investing your own portfolio to double-up on risk when getting close to retirement. The theory being that if you didn’t start saving early enough, then by investing more money in riskier assets now you will catch up by the time you retire.

    The problem with that logic can be explained in one word – 2008! While accepting more risk when you have a long time horizon before retirement may increase returns, a short time horizon is not at all forgiving if a large percentage of principal is lost. Instead, we need to explore many alternative variables in the financial security equation rather than merely adding more risk.

  3. Do I have enough? Whether you are a partner in a firm or a solo practitioner, whether you bill by the hour or on contingency, attorneys often continue to fill up their work pipeline because they fear they won’t have enough to retire.

    What if we could demonstrate that you will have enough? Would that free your thinking to start creatively developing some “what if” scenarios for retirement? Attorneys are generally too busy with cases or the quest for greater billable hours to have the time to do their own planning (and, by the way, that includes doing their own estate planning).

    Delegating to an expert to guide the retirement planning process is the key to assuring that you will be on track to reach that goal of financial security.


Joel Framson

Joel Framson, a Certified Financial Planner Practitioner®, draws on his experience as a CPA/PFS (Personal Financial Specialist credential) with a Master’s Degree in Business Taxation from USC in providing attorneys and affluent families expert guidance as they plan for and transition to a financially secure future.