In an effort to inspire clients and potential clients to take action in the financial planning arena, we see an endless stream of commercials featuring exotic golf courses, beaches, sailboats, and marine mammals. Words like “hopes,” “dreams,” and “passions” are often invoked. And for the smaller subset of people in this world who regularly use these terms, this reference can be helpful.
But what about the rest of us?
In reality, many of these words fall on deaf ears for lack of resonance, because they seem a little more sensational than the reality we are chasing. Even common phrases like “estate planning” and “wealth management” can seem distant to people with millions in assets because they don’t yet believe that the words “estate” and “wealth” really apply to them.
Heck, even some of the most common words used in financial planning, like “values” and “goals,” aren’t exactly everyday parlance for most. Can you imagine your crazy uncle making a “mission statement” while getting a third helping of stuffing at your next Thanksgiving dinner?
Are “Goals” useful?
Let’s be clear: there is nothing wrong with using any of these terms and phrases. In fact, many of them are well applied in the practice of financial life planning. But we have to recognize two things about the language of financial planning:
1) Different words will motivate different people differently.
2) Words are more a means than an end.
Since different words will motivate people differently, we should feel free to hold on to our own personal favorites. For example, a financial advisor may be a staunch “values” person, finding great personal motivation as a devotee of Stephen Covey, but their client may have a negative association with the word. If that’s the case, their efforts will almost certainly be better spent finding another source of rhetorical motivation, rather than trying to recycle their partnership with an insistence on “values-based financial planning.”
And it doesn’t even have to be a negative association; there may be no association, even with a word that has become a financial planning staple (if not a sacred cow), such as “goals.” Interestingly, this word seems to evoke a lot of passion, both from its supporters and detractors in the financial planning space.
Some consider goals to be the purpose of financial planning. And why not? We begin by determining what is most important to someone (their values, if you will), set goals that support those values, and make plans to achieve those goals. Voila! It totally makes sense. But…
Others, however, argue that setting specific goals, especially those that are long-term, is inherently challenged because life is so non-linear: who really knows where they’ll be or what they’ll want in 5 or 10, much less here in 20 or 30 years? They further argue that the inherently variable vehicles often used to achieve these goals, such as the stock market, make them far less accurate than they might otherwise appear. The net effect, it is well argued, is that overemphasis on goals can actually be ofmotivator
So where does that leave us?
Perhaps the Solomonic wisdom here is somewhere in the middle. Maybe goals work when they work, and not when they don’t. And perhaps they work best when applied as a means, rather than an end.
But how could this be? Well, when we’ve done a good job of discerning someone’s motivation, a tangible goal can help create some traction and set a positive trajectory.
Borrowing from Brendan Frazier Borrowing from Greg McKeown, what we really need to motivate effectively is something that is meaningful. i measurable
I would say we start and end with meaning. For example, many people want to have more quietness. Super meaningful, but totally impossible to measure, right? Through effective exploration, however, we learn that a particular person sleeps better at night when they have $X.00 in their savings account. So the goal of having $X.00 in savings becomes the means to peace of mind.
Another example: some—many, I think, and especially those heading into the retirement phase of life—are motivated by the idea that have enough. It is, of course, a ridiculously relative term. It’s a feeling, not a number. And no financial advisor on the planet can guarantee that anyone else has enough money saved or invested or in the form of pensions or annuity income streams that they have a 100% chance of outliving all of their expenses.
But through diligent analysis, we can certainly provide a very favorable (or unfavorable) opinion that you can pull out $Y.00 per month and probably maintain that income stream with periodic inflationary increases throughout your life. The number of monthly income is the goal, the means, but that glorious feeling happily It’s the end.
Finally, let’s remember that as financial advisors, we shouldn’t get too hung up on ANY of our pet words of financial advice. It’s really the CUSTOMER’s words that matter and will do the best job of motivating them. So whenever possible, we should stick loosely to our proprietary vernacular and use the words that will most motivate our customers: theirs.
