Uncovering your client’s long-term thinking

How your clients view the long term could affect the way they plan for their future. That’s why we’ve conducted in-depth research into this topic and are exploring what these insights can tell us with a psychological lens on. We’ll be sharing behavioural insights over the coming months to help you understand what your clients are thinking and why thinking long-term isn’t as easy as we think it is. Here’s what we’ve discovered so far.

Looking beyond the numbers

There are many established ways that advisers look at different life stages when it comes to helping their clients plan for retirement. But the traditional path of work, save and retire is changing. With people’s lives becoming too different to compare, it’s difficult to rely on just the statistics. Could understanding their motivations and emotional drivers be the key to helping clients think long term?

The research into long-term thinking

We’ve partnered with We are IB and Behavioural Psychologist Dr Simon Moore to take a closer look at how behavioural traits influence the way clients think of their financial futures.

By looking through a psychological lens, we can build a better picture of how clients view long term and identify what their barriers are. Are they worried about risk? Do they only think of the here and now? How do their circumstances affect the way they think long term?

Keily Vanstone, Head of Marketing at Canada Life says: "We've always sought to understand our clients’ needs and how to help them plan for the unexpected and give up gratification today to benefit tomorrow. With the FCA consumer duty, the raise of consumerism and the pandemic accelerating the pace of change, there's never been a better time to understand our clients’ whys, what triggers them, what motivates them, and really get under the skin of how they think and plan for the long term."

How is this research different?

Dr Simon Moore, Behavioural Psychologist, explains that "If you just look at social aspect, you'll get one facet of what's going on, but if you start to look at someone through a range of different lenses you can work out attitudes, cognition, personality and put that in context. You can split people into different types: when you're young it's often about 'gaining' - whether that is status or money. At some point it morphs into 'maintain'. These aspects are interesting to look at in terms of this long-term lens."

"There is also complexity around motivation: lots of people are trying not to be like someone, while other people are more positive, moving towards their ideal self. All these things influence how we plan. People don't just sit down and say, "what does my future look like?". We're thinking about these dynamics and looking at how it could it be useful for financial advisers to understand it."

How does this help advisers?

One of the main problems that advisers face is that what people say and what they do are two different things. Often people are too afraid to admit that they don’t know more about their finances and as a result, there is a disconnect between what they say and their reality. This means that they may not be asking for the right support. If your clients are unable to say what’s really on their mind, it can make it harder to understand their needs.

The Financial Conduct Authority (FCA) also recognises that your client’s suitability is not just a tick box exercise but how can you increase your understanding your client’s approach to long-term thinking.

That’s why our research goes one step further, looking at what is behind these responses and the personality traits that lead people in certain directions. By gaining an insight into how your clients think, you can break down these barriers and guide them to make the right decisions for their future. You’ll also be able to show them how they can plan for the long term and ease some of their concerns.

The important of financial advice

What we’ve also uncovered, is how significant the connection between an adviser and their client is. Lara Bealing and Dr Simon Moore both agree that although digital advice platforms may be the future, they won’t work for everyone.

There are clients that need more support, who don’t feel comfortable making quick decisions. Dr Moore says "If you lack confidence in making financial decisions, as many people do, the ability to ask follow-up questions is important.

People need to be reassured and comfortable. There is a danger in trying to do anything too quickly. People worry that things are going to come back and bite them."

Is there more to come?                                      

There is and we can’t wait to share it with you. This is a huge piece of work and over the coming months we’ll be unveiling more insights to help you set goals for your clients. Look out for more information through emails and on our website to make sure you don’t miss out.