Derek Tharp (Kites.com & University of Southern Maine): Using Asset-Map To Develop A (Gestalt) Visualization Of The Holistic Financial Plan (October 25, 2021)

Derek Tharp, of Kites.com and the University of Southern Maine, has made available for download his article, “Using Asset-Map To Develop A (Gestalt) Visualization Of The Holistic Financial Plan,” published in Kites.com. The abstract is as follows:

When preparing comprehensive financial plans, financial advisors must consider their clients’ entire financial situation, which consists of a variety of distinct components, ranging from investment account balances to diverse sources of cash flow to retirement goals and more. In isolation, each separate component might give a financial advisor only a certain limited perception about their client, but falls short in providing a full picture of who the client is and what they aim to achieve. Financial advisors can apply the principles from one school of thought, Gestalt psychology, which posits that humans perceive their environment in a holistic manner that is different from the sum of its individual parts. By doing so, they can create holistic plans that are relatable to clients on a much more meaningful level, as they consider not just the quantitative aspects of the client’s financial life (e.g., their assets, liabilities, income, and expenses), but also the important qualitative factors such as goals, lifestyle preferences, and personalities.

In order to help advisors and clients see the bigger picture, the company Asset-Map created a tool that works well from a Gestalt perspective by providing a graphic summary of a client’s entire financial situation. These summaries are presented as a one-page, mind-map-style report, which helps advisors to quickly draw out patterns and formulate holistic perceptions that are relevant to the client’s broader environmental contexts, including where they are in their career, their family situation, and stage in life. Asset Maps can also be very useful for advisors to have more targeted and fruitful conversations with clients, as the advisor can easily and quickly target specific areas that need to be reviewed. For example, because Asset Maps separate income and assets by spouse, advisors can easily assess the relative life insurance needs of each spouse, and even have a better idea of each spouse’s individual Social Security considerations. This valuable context can be highly relevant to making sense of a client’s actual situation as a whole, and can also be a useful way for some advisors, who may initially feel hesitant to present this division (perhaps fearing that the spouse with lower income may feel less valued when incomes are displayed this way), to broach these discussions in the first place. Because the details here – the income and assets belonging to each spouse – are what provide a level of additional clarity that would have otherwise gotten washed away had those details not been broken down by spouse.

For clients, an Asset Map provides a useful summary of their household, showing them how all the individual pieces of their financial lives interact and create their broader financial situation. Having all the information in an easy-to-understand format and in one place also can provide clients with the reassurance that their advisor has captured and considered all of their financial details (and help them to easily see if they need to let their advisor know about any pieces of important data that may be missing!). Which means that as long as the advisor is proactive in keeping the client’s information updated, clients can be reassured that their financial situation is being managed from a more comprehensive perspective.

Ultimately, the key point is that by analyzing a client’s financial situation with Gestalt psychology principles in mind, viewing the whole picture as a complete unit rather than analyzing the individual parts separately, financial advisors can visually take stock of the client’s broader financial situation. This can result in not only better-informed and more confident clients, but also improved client data tracking and financial planning recommendations!

Click here to view Derek Tharp’s summary of “Using Asset-Map To Develop A (Gestalt) Visualization Of The Holistic Financial Plan”.

Posted by Isabella King, Associate Editor, Wealth Strategies Journal.

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