After Alice fell down the rabbit hole, one of her first questions was, "Which way shall I go?"

The Cheshire Cat wisely answered, "That depends a good deal on where you want to get to." Similarly, planning after a crisis must take direction from where you want to go.

For a financial and investment plan that will survive a crisis, your clients need to look into themselves and make a sobering analysis of two things: What is their purpose? and How will they deal with risk?

Planning With Purpose
As a financial planner, you typically begin your work by documenting your clients' short-term goals, such as buying a new car next year, or long-term goals, such as a stable retirement. You categorize goals that way to prudently approach making sound investment decisions.

However, an important step to establishing a plan that will survive a crisis is defining your clients' purpose. Purpose brings clarity and vision to who your clients want to be and the core values that will guide their specific goals and actions.

By infusing purpose into financial planning, a curious change tends to elevate the orientation to more of a life planning process. Life planning encompasses life goals, only some of which may be financial.

Defining a Clear Vision
After a crisis, people often take an inventory and take action. When that action springs from the clear vision created in the planning process, you can most effectively create a path to help clients achieve specific goals.

Here's an exercise you might try with your clients, but try it yourself first:

Sit down in a quiet place, by yourself or with a significant other, and answer this: If you were to sit there in three years and reflect, what would have had to happen -- both personally and professionally -- to make you feel that those three years had been successful? Such questions help us begin to plan with purpose.

To help navigate toward those successes, you set milestones for the end of the first and second year so you know if your clients are on course. To give your clients the best chance to succeed, you can create action steps for each 90-day period. This provides fairly immediate positive reinforcement to nurture your clients during their journey.

Teaching Clients About Risk
No matter how clear your clients' vision is when they set their plans, they will encounter situations that obstruct the path to their goals and create uncertainty.

Risk is not a new concept to financial planning. You teach your clients that as investors, there are short and long-term risks and by understanding relevant risks, they'll be better protected in times of crisis.

Part of the risk lesson for clients is that volatility, or short-term risk, tends to increase during a crisis. Volatility relates to the unpredictable movement of an investment, so it creates uncertainty. It follows that the greater the potential volatility, the greater the risk. And the more risk you take, the more uncertainty you generate.

After a crisis like Sept. 11, which no one could plan for, you and your clients should reexamine their portfolios to determine if the amount of short-term uncertainty is consistent with their financial plan and refocused goals.

In the near-term, volatility is a risk because your clients don't know if their money will be available when they need it. However, over the long-term, volatility no longer is a relevant risk because, history has shown a payoff for taking a prudent amount of investment risk.

The long-term risk your clients need to worry about is inflation. It's insidious because your clients don't notice it in the short-term. A $100 trip to the grocery store creeping up $5 per year, is insignificant until after 20 years when that same shopping basket costs $265. Your clients' portfolio needs to anticipate this risk and provide growth to maintain buying power.

After a crisis, help your clients to put risks into perspective, and remind them that growth maintains buying power.

Back in Perspective
We learn from crises that we have tremendous opportunities ahead once we have dealt with the dangers and immediate fears. Such opportunities may include:

• Spending more time with family and friends;
• Making sure a will, durable power of attorney and other important papers are up to date and the location known;
• Reviewing whether all types of insurance are adequate;
• Identifying an emergency fund that is available in bad economic times;
• Reexamining appropriateness of risk level in a portfolio; and
• Balancing work with personal growth opportunities.

Once you have linked your clients' financial values with their personal values, you have elevated their achievements from success to significance.

Joel H. Framson, CPA/PFS, CFP is a partner with Glowacki Framson Financial Advisors, LLC in West Los Angeles. He can be reached at jframson@gffa.com.

© 2002 California Society of Certified Public Accountants. For reprint permission, contact Aldo Maragoni, managing editor.