Going beyond the money with financial planning

 

Date written: 19th August 2021

Original author: Martin Bamford

 

Financial planning is about so much more than just money!

New research from insurer Aegon has highlighted how much further most financial advisers go when working with their clients.

According to the research, 78% of financial advisers ask their retirement clients about what gives them meaning, purpose and happiness.

Because, after all, what’s the point in having money if you’re not using it to deliver happiness!

The research spoke to 212 financial advisers and found that around 4 in five include questions about what gives life meaning and purpose as part of their getting to know the client process.

Advisers also ask clients who are planning to retire about what will bring them happiness in retirement.

According to those who took part in the research, these discussions about meaning, purpose and happiness are a valuable way to understand hopes and fears in retirement, and advisers can use the answers to support broader financial wellbeing.

During an interview for the research, one adviser said:

“What can we do at a human level to have an impact on people’s lives? Connect more with what they really want to do rather than do the same as everyone else; that means we can be far more effective and open and hopefully help them be even happier.”

Thinking about the future, advisers increasingly expect their roles to move more into ‘retirement coaching’, with less of a focus on products and investment choices.

The top client aspiration in retirement is the ability to maintain living standards, with 39% of advisers saying this was the hope for the majority of their clients.

Other important retirement goals include maintaining health and longevity, not running out of money during their lifetime, and having a solution to cover long-term care costs.

Steven Cameron, Pensions Director at Aegon, said:

“While advisers remain focused on helping clients achieve their financial objectives, the research points to an increasing focus on broader financial wellbeing. Advisers are going beyond their valuable role in recommending products and investments to optimise portfolios, towards a more holistic approach that offers coaching on life after work.

“Through open discussions during the fact find, advisers can gather a fuller picture of a client’s wider life goals and priorities to help finance aspirations and mitigate fears in retirement. Clients not only benefit from advice to support their financial future but also have someone to help them identify what gives them joy and purpose and picture their ‘future self’.

“The research highlights that the aspiration to maintain living standards in retirement is the primary objective for the majority of advised clients. To truly deliver on this, people often need help from their adviser to picture their future lives. To make this goal attainable, individuals should look for ways to plan well ahead to ensure they are on track and have the best investment approach to meet this objective.”