Planit:Engagement Process

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In this Video you will Learn...
How can I better engage my clients at the beginning of our planning relationship?
• Engagement Agreement versus engagement process
• Initial Assessment and Evaluation process
• Getting your clients to engage you

Keep on Track! Continue training on...
Practice Management

Other Related Topics
Your Needs Self Analysis Ideal Clients Building Trust
Implementation for Goal Achievement Fact Finders Introduction to the Engagement Screen


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It is doubtful that there is any single activity that an advisor can make part of their modus operandi that would have a more positive impact than ensuring that there is a robust written engagement agreement in place for every client. (Note: the terms engagement agreement and letter of engagement are synonymous.)

Even advisors who have used engagement agreements properly for only a short period of time report that the benefits quickly become obvious. For the advisor who has functioned primarily with a “product transaction” focus that responded to a client’s individual needs, the use of an engagement agreement might, at first, seem unnecessary or more simply put – a waste of time. They may be of the view that defining the terms of a client engagement and committing them to writing is about consumerism or complying with a professional financial advisors’ practice standard. But, of course, it is much more than that. The proper use of engagement agreements is to provide a better service to clients and a sure-fire way to dramatically improve the efficiency of an advisor’s practice, which will result in enhanced net income. This effectively becomes the deal before the deal.

The rationale and explanation are simple and can be illustrated with a short story. Let’s assume that advisor, Bill Jones, is new to the financial services industry. After the New Year he conducted seminars to develop prospects for a particular type of investment fund. One of the attendees, Robert Hutchison, subsequently invested $5,000 in the fund that Bill Jones recommended.

One month later, Bill’s new client, Robert Hutchison, received a phone call from Carl Wong, a seasoned financial planning veteran who was referred to Robert by one of his clients. During the telephone call, it was agreed that Carl would meet with Robert and his wife, Marilyn. At that initial meeting, Carl took time with Robert and Marilyn to explain how the services that he provided could enhance their financial well being in a number of ways. In fact, Robert and Marilyn could immediately see how working with Carl would help them evaluate all of their objectives and thus improve the chances of achieving them. They had no hesitation in signing an engagement agreement that outlined the complete terms of their engagement, including the details of all the services that Carl would provide.

From Carl’s perspective, in far less time than Bill Jones took to find these new clients and sell them a small, single investment product, he was able to prepare the following for Robert and Marilyn:

  • A Retirement Planning Analysis and subsequent Investment Policy Statement that led to Robert and Marilyn consolidating all of their $233,000 in investment assets under Carl’s management as well as setting up new Pre-Authorized Contributions for their future savings
  • An analysis of Robert’s and Marilyn’s situation in the event of death and disability, which immediately led to several substantial insurance applications being completed

Additionally, of course, Carl was rewarded with several referrals because Robert and Marilyn were so delighted with the Retirement Planning Analysis he had done that showed them how Robert could be in a position to retire at age 56 by simply changing their investment strategy and savings habits.