Goals! Goals! Goals!

Why we all need them and how understanding clients’ long-term goals is an opportunity for advisers

Lara Bealing, Marketing Director at Canada Life UK, sat down with us to
discuss the importance of long-term goals, how as an Industry we need to
adapt to changing customer circumstances, and why emotion lies at the heart
of decision making.

Why is setting goals is so important when it comes to finances?

Knowing where you want to go in life, the milestones you want to meet, how you want to feel and what you want to achieve over the long-term are such important drivers to how we live our day-to-day lives. With the pandemic accelerating the pace of change and causing us all to question what’s important to us, our new research sheds interesting insight into the importance of goal setting for our nation, what motivates us to set goals, what stops us, and the importance of who we share those goals with.

Our industry is founded on providing our customers and communities with options for the future, to help them progress and fulfil their potential, and we have an increasing appreciation for learning how people behave to help us understand how to better help and support. There is a genuine opportunity to explore the relationships between our emotions and how financial planning collide.

97% of us have long-term dreams and aspirations, with our top goal driven by a desire to feel happy and content (92%), yet these goals are less tangible and harder to quantify than those related to facts or life events.  The research has also shown us that money and finance are intrinsically linked to how people reach their life goals. 38% say they are using their salary and earnings, 37% rely on budgeting, while a third (34%) are using their savings to ensure they reach their goals. But, It is not just finances that turn our goals into reality.

Can you tell us more about the psychology of financial behaviour?

Working with consumer psychologists Innovation bubble, we have discovered that we are all influenced by an optimism bias when planning for the future. What I find fascinating is how that connects with our financial behaviours. Does our optimism mean we are doing enough to have the finances in place to build the futures we dream of? Do we understand the finances required to be ‘happy and content’ and what are the barriers to us sharing our goals?

Interestingly the research showed us the majority of us share our goals with friends and family but just 1 in 10 share goals with a financial adviser, and the divide is greater between men and women. But why? It appears so much of it is down to a combination of shame, embarrassment and lack of trust and we want to find out how, as an industry, we can overcome these barriers so client’s receive the best information and advice.

How can the industry support the realisation of client’s goals?

We all know that receiving financial advice is critical to help people make more informed and better choices when it comes to their finances.  Advisers fundamentally know the right questions to ask their clients and how to help them with the next steps, so we want to work together to help make it more accessible and overcome objections.

There’s no longer the linear approach to life, work, retire and we must reflect the multiplicity of wants, needs, decisions and life stages people go through, and how suitability changes with that. It’s about recognising and adapting and learning together - to ensure we deliver the best we can for clients. It is here that advisers play such a critical role not just in creating the right solutions, but in creating financial confidence for today and the future.

Above all we must stay relevant to the needs of our customers. Helping them to see and feel the future in a tangible way, in the often seemingly intangible and short term world of their finances. And we can do this by always taking the time to understand people’s real needs and motivations, not just listening to what they say, but place value on the emotional drivers that sit behind their goals and decision making.

We know it’s critical to get advice, however research shows it’s clear there is work to do for us to improve the accessibility of advice and encourage more holistic conversations to capture the nuances and each individual client’s drivers, motivations and long-term dreams.  This is how we can ensure every client receives the best advice.

Hear more from Lara Bealing

Hear more from Lara Bealing in this CPD webinar joined by Dr Simon Moore, Behavioural Psychologist they reveal how clients view their financial goals, why these insights influence long-term thinking and how advisers can harness this information to create better conversations.

The Canada Life Long-Term Close Up campaign will continue to explore key themes, trends and psychological biases that influence long-term thinking throughout 2022.

Find out more about Long-Term Close Up

Next steps

Going for long-term goals

Introducing our deep dive into the role of goals in long-term financial planning for your clients

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The power of positivity

Help unlock clients' priorities through adopting a coaching role to aid long-term thinking

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Complete the CPD training

Uncover the hidden motivations of your clients in this fascinating CPD training with Dr Simon Moore


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