5 ways goal-based financial planning could benefit your client

Many of your clients who are otherwise organised and proactive may be putting off reviewing their finances and setting appropriate goals.

According to data published by the Financial Conduct Authority, 1 in 10 UK adults have put off dealing with financial matters.

And key statistics published by Financial Capability have revealed that 39% of people don’t feel confident managing their money. This could be due to uncertainty about how to approach financial planning.

Goal-based financial planning could help your clients align their finances with their goals. Read on to find out how.

Goal-based financial planning: A personalised approach for achieving specific financial outcomes

Goal-based financial planning is an approach that helps individuals identify specific financial objectives and make plans to achieve them.

The aim is not simply to accumulate wealth, but rather to develop a strategy for achieving a set of specific financial outcomes.

Goal-based financial planning takes into account the individual’s unique circumstances and preferences when developing a goal-based plan, such as their income, risk tolerance and age.

Some common goals that this approach can be used to achieve include buying a house, funding a child’s university education and retiring at a specific age.

5 benefits of goal-based financial planning

1. Stay motivated and keep on track with clear, personalised financial goals

Some individuals may approach financial planning with the sole objective of accumulating wealth, without setting clear objectives.

Yet, having clear goals to work towards could help to motivate your client, enable them to monitor progress and keep them on track.

Further, personalising goals could provide added motivation. Asking questions such as, “What could this goal help me achieve in life?”, could make financial objectives feel more meaningful and provide motivation for achieving them.

It might also be helpful to break larger goals into short-, medium- and long-term SMART objectives. SMART goals are specific, measurable, achievable, relevant and time bound.

Sticking to these criteria when goal planning could help your client focus their efforts and be more efficient in working toward their objectives.

2. Maintain focus by prioritising financial goals

Prioritising goals based on their importance and urgency can help to focus attention where it’s needed the most.

Sometimes this can be difficult to do objectively, so working with a financial planner could help your client prioritise their goals more effectively.

For example, a professional financial planner could help calculate how much money is “enough” for them to achieve their long-term objectives and prioritise goals accordingly, rather than saving for savings’ sake.

Without this step, making financial plans may feel overwhelming and it could become a task that is pushed far down the to-do list. In contrast, prioritising goals and focusing on one objective at a time might make them feel more achievable.

3. Achieve goals by creating realistic and achievable action plans

Making clear action plans could help the client identify the steps they need to take to achieve their goals and they may be less likely to put off tackling their finances.

Effective planning that is realistic, achievable and aligns with the individual’s risk tolerance could also support more confident financial decision-making.

If the client understands how their decisions could potentially affect their future wealth, they may be more motivated to take action. For example, if they knew they could afford to pay the deposit on a child’s first home without compromising their own standard of living, they may be more likely to do so.

4. Stay on track by continually monitoring progress towards goals

Goal-based financial plans are generally most useful if they are regularly monitored, reviewed and where necessary, adjusted.

If there are changes in the market or a person’s circumstances these could potentially affect goal priorities, timelines or the nature of the goal itself.

Setting time aside to review their finances at regular intervals could help the client to keep on track, stay motivated and ensure that finances align with goals.

5. Make better financial decisions and benefit from improved financial wellbeing

By working with a financial planner to identify personal goals and develop a plan for achieving them, your client may be better placed to make informed decisions about managing their money.

This in turn could improve the individual’s financial position, boost their confidence in financial decision-making and lead to better financial wellbeing.

Get in touch

If your clients would like to learn more about how goal-based financial planning could help them, they should email mail@delaunaywealth.com or call us on 0345 505 3500.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.