CERTIFIED Financial Planner® Mel Jacoby presents an entirely new perspective on money matters and getting down to the root cause of money behavioural patterns.
A committee member of the Financial Planning Institute of Southern Africa, Mel was one of the finalists in the 2017 prestigious South African Financial Planner of the Year competition. Described as a progressive forward thinker, and an early adopter of change in her work in the ever-evolving Insurance industry, Mel says one of her strengths when consulting with clients is her ability to connect with them and determine the truth about their money story.
The biggest mistakes clients make…
“Most advisors will say the biggest mistakes people make with their money are things like not saving enough money for retirement, or not taking a long-term approach to investing, or not having a financial plan. And those are certainly very important mistakes to avoid, but for me, it all comes down to connecting with them and uncovering the truth about their money story.”
“Money shouldn’t be your goal or your destination. It shouldn’t be that ‘thing’ that chases you to work for 40 hours a week to pay the bills, it’s not the sea you’re sailing or even the boat. Money is the sail you use to get you where you want to go, and the wind in the sail is your values.”
After almost 15 years working in the industry Mel realised the biggest mistake clients are guilty of is not giving meaning to their money and avoiding having open conversations about money. “I came to realise that our industry was so focused on the sale of a product or an investment, that the client’s money became the advisor’s client and not the other way around,” she says.
Return on life…
“Our industry deals with what a client wants – a return on investment, to cover their risks, picking the best stocks, the next alternative investment and saving for retirement. In my opinion, we never explore the why. If we explored the why first and then the what, it would prevent a lot of bad decisions around money.”
According to Mel, these bad decisions are inherent in investor behaviour. “People talk about ‘one day I will be able to travel’ or ‘when I retire’ – but what if that ‘one day’ never comes? When markets drop, they change their portfolios, when there is more month to their money, they cancel policies and investments. If they just understood their ‘why’, it could be avoided and they could be guided to transition from their ‘one day’ to now.
This is where Behavioural Money Coaching, a key element in Lifestyle Planning, comes into its own. Globally, there is a movement away from Financial Planning and product sales to Lifestyle Planning and Behavioural Money Coaching, where the focus is on a return on life first and then the return on investment needed to provide for the life you want.
This integrated approach tests and assesses your past, present and future perspectives. It takes into account your money story, your well-being, your progress and freedom relating to your money. It deals with both the right and left brain components.
Money shouldn’t be your goal or your destination…
“The left brain deals with figures, facts, stats, logic, and detail, while the right brain deals with soft skills, emotions, creativity and the bigger picture. It is for this reason that people, and in particular couples, feel uncomfortable talking about their money. It can trigger emotions they have attached to money and their behaviour and beliefs that can influence every aspect of their life,” she said.
Explaining further, Mel refers to the book, Switch on your brain by Dr Caroline Leaf, who proves that if a decision and thought process only uses one side of the brain – the decision is not a balanced one and destined to create an imbalance along the way. “When we walk, talk, eat – we don’t only use one side of the brain because we are left or right brain dominant. We are designed to have synergy between the two sides of our brain.
“As a Financial Planner, my job is to manage a client’s money behaviour, but to do that I need to understand why and how their behaviour evolved.”
To help discover the root causes of this behaviour she makes use of Lifestyle Planning psychometric assessments and tools that are centred around a client’s well-being, progress and freedom. These assessments enable Mel in determining a client’s life satisfaction and putting a financial plan in place to achieve the life the client ultimately desires with the money they have.
Some of the questions included in the Lifestyle Planning consult include:
1. Is your money your servant or your master?
2. If money wasn’t the end goal, would you still be doing the same job?
3. How does my earliest money memory influence my money decisions?
4. How can I give meaning to my money to align it to the life I want now and in the future?
5. What legacy am I passing on to my children ito generational wealth?
The first 10 readers to email Mel Jacoby on [email protected]ory.co.za will be able to experience the ROL Index (Return on Life) online assessment plus a free personalised report. I can guarantee you will be surprised by the results, and the profound effect it will have on how you think about your financial planning and your life. The value of this assessment is R750 ex vat.
Don’t miss next month’s article on: “Couples: 3 Money lessons learnt from Jeff and Mackenzie Bezos Divorce”.
Tel: 031-2078514 | Fax: 031-2078249
Office Cell: 083 435 2927 | www.mvestfinance.co.za
Address: 55 Gladys Mazibuko Road, Essenwood.