Canadians today have lots of financial concerns - some are worried about the prospects for the economy and their jobs, others about whether they can rely on their company pension to be there for them.For those Canadians who aren't in pension plans, the number one concern often relates to their retirement - and what effect have recent markets had on their retirement plans.

Where this is a client's pressing issue, it's essential that advisors address this directly. Unless you do that, clients will not fully listen to your recommendations - and will also be more open to talking to another advisor who offers to take them through the process of revisiting where they stand. Concerns about revisiting where clients stand

Not every advisor is comfortable taking a planning approach - there are many who essentially see themselves in the business of investment advice; this is where they put their focus.

That approach may be fine in normal markets. Given today's market, however, the top concern for many Canadians is "Where do I stand?" - and just talking about investment strategies won't answer this question.

Most investors don't need or want a thirty page plan to address this - there are a number of inexpensive, fairly easy to use software packages that will answer core questions about retirement planning and in particular the key question of when people can expect to retire.

If you haven't talked to clients about preparing a financial plan in the past, this may be the time to say: "In light of last year's markets, I've recently sat down with some clients to develop a financial plan to spell out where they are likely to be in terms of retirement. The process takes a couple of hours over two meetings and other clients have told me they have found this a very useful exercise. I'd like to take you through a similar process - are you okay with that?"

In my recent conversations with investors, I've talked to a number of wealthy individuals who said that their advisor had suggested preparing a financial plan in the past - and the investor had taken a pass; being busy and given their portfolios, they simply didn't see the need to do this. These same individuals say that in light of what happened last year, their interest level in having this conversation has gone up dramatically.

Even where a plan has been developed in the past, it almost always needs to be updated in light of last year's markets.

During a roundtable with a group of advisors last November, most said they were putting off talking to clients about their financial plans until markets bounced back. I recently talked to one of the participants in that roundtable, who told me she now accepts markets aren't going to fully recover soon - as a result, she has made it a priority to sit down with clients and update their plans.

Making tradeoffs

The essence of planning is identifying the tradeoffs to hit your goals - and that's what financial planning is really all about.

The financial planning process helps investors gain control of their financial future. Where they are not on track to achieve their objectives, the process clarifies the options available to them - whether it be cutting back spending and saving more today, deferring retirement, selling a vacation home, planning to work part time after retirement or scaling back the lifestyle they are considering after retiring.

The good news is that many Canadians have already accepted the need to amend their plans - even without having this conversation with their advisor. There's lots of signs of reduced spending and a greater focus on saving - and a number of surveys since last fall have indicated that many Canadians are planning to work longer as a result of last year's markets.

In fact, in some cases, both advisors and investors who've revisited their plans have told me the news was not as bad as the client feared.

Staying upbeat

Having said that sometimes the situation was not as dire as investors feared, there will be some cases where the conversation is a difficult one.

Recently, I talked to a veteran advisor who talked about how hard these conversations can be: "Like most advisors, I cold called when I started in the business - hearing "no" never bothered me, it just came with the territory.

"It's much harder sitting down with a client you've had for fifteen or twenty years and telling them they won't be able to follow through on the plans they had a year ago - whether it be retiring at 60, helping their kids or grandkids with a house or maintaining support fora favourite charity."

A key role for advisors today is bringing reality to bear for those clients who need this; showing them projections of where they stand in a simple plan is one of the best ways to do that.

At the same time, advisors need to remind clients that all is not lost. One advisor ends his conversation with clients this way:

"The changes we've made to your plan reflect conservative assumptions about what markets will do going forward - it's important that we err on the side of caution.

"Having said that, there are lots of reasons to be optimistic about prospects for the market once we get through the current challenges the economy is facing. I'm going to actively monitor your plan going forward - so that if we do see markets coming back, your plan will be updated to reflect that.

"The most important thing you should know is that I am absolutely committed to working with you to get you back on track and close to where you were a year ago."

A conversation about a client's financial situation can take lots of time and drain emotional and physical energy. At the same time, for many clients, today this is the most important conversation an advisor can have ..... and remember, if they don't have it with you, there's a real risk they'll have it with someone else.