The people’s perspective – the family influence

From our research, we know that over half of people say they’ve been influenced by their family when it comes to goal setting. 

But what does this truly look like and what impact does the family have on your client’s thinking or decision-making around financial goals.  We spoke to people from across the UK to understand more about who shaped their attitudes towards planning and how they set their goals around financial goals.

The psychology behind this

A well-functioning family is a strong in-group, defined by shared values, norms, and goals.

From childhood, we are taught that we should trust our families and not trust strangers. As we get older, we grow warier of people society tells us to distrust because they have their own interests at heart whilst our inherent trust for those close to us remains. 

Along with this, we have our longest relationships with our families and therefore, people can build up strong trust with their families. Some may have an authoritative figure within the family who may be the ‘go to’ on matters of complex financial planning.

Whereas, families can also influence decision-making in financially unhealthy ways. For example, expectations of funding children and grandchildren beyond what is viable, especially if someone has drawdown a large sum of money and feels generous.

And people also can pick up ‘rules of thumb' from their parents, and from how others around them talk about financial planning, which may not be optimal.

The opportunity for advisers

As we saw, people have been influenced by their families in several different ways. Some have used the trust they have with their family to use their past experiences to make decisions for themselves. Others have seen changes to the ways parents have made financial decisions, that they’re now repeating, and some take the memories of parents making sacrifices to help them have a better future.

These all have a tangible impact from a financial point of view but what impact is happening psychologically and why is this important for advisers to understand?

Understanding the way family influence your client’s way of thinking, when it comes to long-term financial planning and decision-making, could provide you with in-depth knowledge of what your clients are thinking and feeling during conversations.  

Adapting these conversations through behavioural insights could provide you with a tailored approach that is better suited to the way your client receives, processes, and responds to information and people, allowing the potential for even better engagement. 

Read our latest interview with experts discussing the psychology that sits behind the family influence and practical tips on how to adapt conversations for better engagement, including:

• The 4 behavioural groups – learn how you can use this in your day-to-day work with clients.
• 3 questions to ask your clients – read how you could use these to tailor conversations that will work better for your clients.

We’ve been researching how people approach long-term thinking and applied a psychological lens to understand this further. We want to share these findings with you, so you can use these to help your clients stretch their thinking around long-term planning and decision making.