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A critical aspect of advising clients is to ascertain their financial goals correctly. If you or your clients don’t genuinely understand the goal, your advice could be dangerously off base, and you could lose your client’s confidence.
Clients typically come to financial advisors with various goals, but they might articulate them in nuanced ways, reflecting their concerns, values, and life circumstances. Your role as a financial advisor is to listen carefully, ask probing questions, and translate these expressions into actionable plans created around their biggest concerns, preferences, and priorities.
Here are five common financial goals clients have and how they might express them differently:
#1. Retirement planning
Common goal:
Clients want to ensure they have enough savings to live comfortably during retirement.
How they might express it:
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“I want to retire early and travel the world.”
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“I’m worried about outliving my savings.”
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“I don’t want to burden my children when I get older.”
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“I’ve worked hard all my life and just want to enjoy my golden years without financial stress.”
Advisor’s approach:
Understanding the client’s vision for retirement—whether it’s early retirement, extensive travel, or simply maintaining their current lifestyle—can help tailor the plan to their needs. Understanding the nuances of how they express their goal will give you a window into your client’s genuine fears and motivations.
#2. Building wealth
Common goal:
Clients aim to grow their assets and achieve financial independence.
How they might express it:
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“I want to make sure my money is working for me.”
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“I’m interested in learning how to invest better.”
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“I want to build a legacy for my family.”
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“I’d like to explore ways to maximize my income streams.”
Advisor’s approach:
When discussing a client’s wealth accumulation goals, advisors should always gauge the client’s risk tolerance, investment knowledge, and long-term goals to develop an appropriate strategy. However, the underlying message in how they express the goal will likely reflect their purpose, which you will want to link to your proposed plan.
#3. Education funding
Common goal:
Clients want to ensure they can afford to pay for their children’s or grandchildren’s education.
How they might express it:
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“I want my kids to go to college without taking on debt.”
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“I’m worried about the rising cost of education.”
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“I didn’t have the opportunity to go to college, but I want that for my children.”
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“I want to contribute to my grandkids’ education, so they have a head start.”
Advisor’s approach:
When funding their children’s education is a top goal, you need to consider the client’s timeline, potential financial aid eligibility, and other financial goals to ensure education funding is balanced with other priorities. But how they express the goal will tell you why it’s so important to them—which is your motivating factor.
#4. Debt management
Common goal:
Clients aim to reduce or eliminate debt to improve their financial health and reduce stress.
How they might express it:
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“I’m overwhelmed by my student loans.”
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“I want to pay off my mortgage before I retire.”
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“Credit card debt is keeping me up at night.”
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“I don’t want to be tied down by debt anymore.”
Advisor’s approach:
Paying close attention to how your client expresses a goal can help you address the psychological burden of debt and how it may be affecting their overall financial well-being.
#5. Legacy and estate planning
Common goal:
Clients wish to ensure that their assets are distributed according to their wishes after they pass away.
How they might express it:
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“I want to ensure my family is cared for when I’m gone.”
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“I don’t want my kids to fight over my estate.”
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“I want to leave something behind for my favorite charity.”
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“I need to ensure my business passes on smoothly to my heirs.”
Advisor’s approach:
For an estate planning goal, you should explore the client’s family dynamics, charitable intentions, and business succession plans to create a comprehensive estate strategy. Listen carefully to the underlying message in how they express their goal to ensure the strategy addresses their key issues.
Bottom Line
While these five financial goals are common, how clients express them can vary greatly based on their personal experiences, fears, and aspirations. By understanding the nuances of how clients articulate their goals, advisors can build stronger, more empathetic relationships and offer tailored advice that genuinely resonates with their clients’ needs and desires.