Your Retirement … with Brian & Bob: Applying mediation in financial planning can be beneficial

When dealing with mediation strategy, start by separating clients from the problem

By Brian Harrigan and Robert Price

American psychologist Kenneth Kaye observed: “If necessity is the mother of invention, then conflict is it’s father.” Given the changes in financial regulations and taxation, we can all agree that understanding how to best plan has become more complex.

With this complexity often comes conflict. Especially when dealing with one’s family and finances. Deciding who gets what and how your estate is split can be a daunting task many procrastinate addressing. Surrounding yourself with professionals who possess conflict resolution skills is critical to your financial success while alive and the sanity of loved ones after you’re deceased.

In financial and estate tax planning, conflict resolution skills are essential to obtain given the prevalence of arguments related to money. Recommendations from financial planners, need to be sensitive to the needs of both parties for resolution to occur. Furthermore, it is not uncommon for financial professionals to include accountants and attorneys in their mediation process for the benefits of both parties.

To plan most effectively during financial disputes, we focus on helping clients become familiar with conflict theory. Conflict theory suggests that arguments centered around finances are naturally occurring and should be viewed as a positive process.

It is the job of financial professionals to help both parties see the positive in coming together for discussion. We begin by confirming the stances of both parties, where they differ, and where they align.

By taking this approach, we can gain a deeper understanding allowing us to pinpoint goals towards conflict resolution. From this point, we pivot into an open discussion with an emphasis on achieving a win-win outcome. During this discussion, we recognize the roles in the different party’s relationship and the power those roles play in our conflict.

We try to correct power imbalances by addressing differences in earning potential, financial knowledge/resources, and relationships with others. Conflict theory helps set the stage for the most appropriate mediation strategy.

When dealing with mediation strategy, we first start by separating our clients from the problem which helps shift the focus away from blame. By focusing on interests instead of position, we’re able to tackle the problems at hand and while not dwelling on the past.

As financial professionals, it is our job to help our clients move forward by uncovering interests leading to a mutual understanding. This helps us avoid the common pitfall of arguing positions by forming objective criteria that helps guide decision making when considering viable options.

Setting up the boundaries to operate within is key to ultimately selecting the best-fit option to resolving a dispute. Clients need to know what is possible before the best-fit solution is selected.

As the end of 2019 grows closer, we encourage the residents of south county to not put off planning for the future.

Addressing business/personal financial needs and possible points of conflict ahead of time can help reduce the amount of frustration that may lie ahead. Refining and enhancing financial and estate plans can be stressful but you do not have to go through it alone.

Brian Harrigan and Bob Price are the owners of Executive Plan Design. Contact them at (408) 767-2572 for advice that can prepare you for what lies ahead.