![]() Furthermore, she discovers dining out is a way for the couple to connect and they look forward to it every week. She finds out that the clients’ entertainment bucket is almost zero, their clothing expense is minimal, and their grocery category is practically nothing. However, in further discussion the advisor begins to uncover more details. From a comparison stand point, the advisor should recommend client A reduce the frequency of going out for a bite to eat. After examining the data it’s found that on average only 15% of the collective group’s discretionary budget goes towards this category. For example, client A goes through an expense analysis and finds out they are spending 35% of their discretionary budget on dining out and would like to know how this compares to other clients. When clients are looking to compare themselves to others they want to compare the hard data. Our propensity for comparison leads us straight into the “Iceberg Effect” and even more so when it comes to our personal finances. The reason: his physical ability was subpar in comparison to his peers. For example, Tom Brady, arguably one of the best NFL quarterbacks of all time, was drafted in the 6th round of the 2000 NFL Draft. However, there are flaws to comparisons as it cannot always be quantifiably measured. Comparisons are efficient it allows for a baseline to be created that streamlines the evaluation of others. We are constantly comparing ourselves to everyone around us. At work, you are compared to others in your industry with similar job functions in order to set your wage. In sports, athletes go through tryouts where they are rated against one another to earn a spot on the team. Our school system inherently compares students, leading to special classes or enrollment in certain schools. Wanting to compare ourselves to others is drilled into our heads from a young age. ![]() How else are they supposed to know if they are doing well? Our clients recognize the number of people we partner with and often ask “How do I compare to the rest of your client base?” The answer we provide is typically not what someone would want to hear as we constantly state “I can’t compare you to our other clients, as your situation is truly unique resulting in an apple to orange comparison.” After we respond, the clients continue to probe “Well, what about people close to my age with similar assets and debt?” And again, we answer the same way: “Comparing other clients around your age with a similar situation in regard to assets and liabilities is once again an apple to orange comparison.” The rationale behind these questions makes sense as our clients are seeking a benchmark to compare themselves to. ![]() One of the many benefits of our job is having the privilege to work with many wonderful families and individuals. ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |