Plenty of research shows that clients want to feel understood. One way for financial advisors to understand them, according to Dr. Preston D. Cherry, is to “Keep It Simple, Stupid!” aka “KISS.”
By using KISS — focusing on clients and their aspirations — an advisor “provides clients with confidence and clarity about what they want to do,” Cherry, author of “Wealth in the Key of Life,” maintains in an interview with ThinkAdvisor. “That’s connecting with the humanistic side of money.”
Cherry, who heads the Financial Planning Program and directs the Charles Schwab Foundation Center for Personal Financial Planning at the University of Wisconsin-Green Bay, is a past president of the Financial Therapy Association.
He is founder and president of Concurrent Wealth Management, based in Green Bay, with advisors also in South Carolina and Texas. In 2024, the boutique firm added four financial advisors.
Cherry explains some of the methodology discussed in his new book, subtitled “Finding Your Financial Harmony.” Its theme: aligning your money to reach your envisioned lifestyle.
Several of his techniques are neatly packaged. In addition to KISS, they include “The Five-Point Life Planning Process,” “The Six-A Alignment Framework,” “The Four ‘Teas’ of Money” and “The Three G’s.”
In the interview, the financial therapist notes that the act of bringing out clients’ feelings — the humanistic side of planning — is critical because it’s “the glue that keeps people committed to their plan long term.”
Here are excerpts from our conversation:
THINKADVISOR: You’re a certified financial therapist and past president of the Financial Therapy Association. How is financial therapy used in working with advisory clients?
PRESTON D. CHERRY: Financial therapy is really big right now. It gives you a therapeutic framework to help people better understand their life and money. We use questions to draw out people’s human side about their feelings and behavior concerning money.
We focus a lot on family dynamics. I have multimillion-dollar clients that are past the wealth-building stage and into the legacy stage.
We ask them how they feel about transferring that money to the next generation and who gets what? Who’s controlling what? Who do you entrust all that to?
What’s the main theme of your book?
Aligning your money in a way that you can invest it for the life you want.
It’s about feeling: If a person doesn’t have a feeling of confidence and clarity about their finances, they won’t be able to flourish in the way they want to.
Many financial advisors might dismiss the notion of financial therapy because they only want to focus on investments. Your thoughts?
Some advisors are pushing back, saying that the humanity of money [concept] is too soft. But that’s not true. By the CFP Board’s definition, the first two steps of financial planning are learning about your client’s money attitudes, values, experiences and life goals.
How do you use money psychology in your own planning process?
After the discovery meeting, I send the [prospect] an automated email with money psychology questions.
When they email me the answers, that information helps me prepare for the next meeting, 60-90 minutes long.
We’ll talk about many psychologically [oriented] things, like legacy and perceptions and beliefs about money.
Then I place that information — feeling and finances — into the financial plan I’m building.
The feeling part is the glue that keeps people committed to their plan long term.
Please explain the concept known as KISS, standing for “Keep It Simple, Stupid!”
When James Carville, Bill Clinton’s strategist, [jotted down for campaign use] “The economy, stupid!” [usually quoted: “It’s the economy, stupid!], he was saying the economy was what people cared about, that you didn’t have to go down other avenues of discussion.
“Keep It Simple, Stupid!” means keep the focus on the client and their aspirations: What do they want to do, what do they want to stop doing?
What do they want to stop doing?
Feeling unconfident and unclear about their life and money because that’s anxiety-producing and limiting.
It keeps people from thinking boldly about what they want to do and having the courage to say, “This is the lifestyle I want and the retirement I want to live in.”
