At Magenta we are always seeking to improve our service and to find ways to give the best possible advice to our clients. We know that the better we understand our clients – their motivation, their past experiences and their worries – the more we can do to help them towards their ideal lifestyle in the future.
Recently we met with a couple and from the outset it was clear that there was some conflict in their relationship regarding money. The husband was flashy and liked to spend money that they didn’t have and this seemed to make his wife very uncomfortable and resentful.
We asked the wife about her philosophy on saving money and found that it was completely the opposite of her husband. After further discussion we discovered the source of the wife’s discontent. She wanted to save as much as she could in the bank and build up a secure nest egg. We asked her why this was so important to her and in doing so discovered her money story and the reasons for her specific behaviour around money.
Her father owned a garage when she was growing up, but he wasn’t a good businessman and eventually went bankrupt. This was traumatic and humiliating for her and she had to wear hand-me-down clothes that her mother would alter for her. For her, the bankruptcy was a defining moment and she didn’t want to be back in that situation.
She wanted to have as much money in the bank as she could, to provide security for her family, but her husband was not helping her.
Three things happened:
We learned a deep, painful story from the wife which will affect our advice and how we will help them plan for the future.
The wife was able to share an important story from her upbringing, feel heard and understood, and be more in control of their financial planning going forward.
The husband, who had been unaware of the reasons why his wife felt so resentful of his carefree attitude towards money, began to realise how his to proliferate spending was upsetting her and jeopardising their future plans.
We know that our client relationships are much richer and our planning much more effective when we know and understand our clients’ defining moments.
What is a Defining Moment?
A defining moment is simply a meaningful experience that stands out in our memory and shapes our lives. It could be an experience that happened, literally, in a moment, or it could be an experience that accumulated over time.
A defining moment can be a positive experience, like becoming a parent or being awarded a prestigious honour. Or, it could be a negative experience, like the woman’s example above, that continues to affect her to this day.
Either way, the more of our clients’ defining moments we get to know, the better the job we can do for them.
Defining moments drive our behaviour and affect our mindset. In the woman’s case above, her experience growing up is a key driver of her savings behaviour and her scarcity mindset.
In my own life I am certain that my work ethic and desire never to be in debt to anyone, are directly derived from an experience where as young children, my siblings and I had to hide behind the sofa when the rent man came knocking, because my parents didn’t have the money.
This is one of my own defining moments – can you think of one of yours that relates to how you deal with your money?
As advisers and financial planners, when we know and understand these defining moments, we gain a greater understanding of why our clients do what they do and think the way they think. Without knowing these moments, our clients’ behaviour may seem irrational and frustrating. But with this knowledge, we gain a deeper level of knowing, of empathy, and can adjust our advice as appropriate.
Don’t be shy!
Tell us about your money stories and defining moments so we can best help you to achieve your best possible life. We will never judge and better understanding your behaviour around money may lead to better relationships, more confidence and greater control.
Do call us for a friendly chat – we would love to hear from you.