Advice Intelligence

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People generally don't talk about money, not even with their kids

Whether we like it or not, money is our 'Currency for Life'. People don't learn about money at school, so where do people learn about what to do with their money when there is no formal education around money? And how do they relate money to their life aspirations and goals?

Financial planning

by definition, is a goals based conversation.

Goals based advice may be a new phrase for some, but it addresses an issue that’s been around for a long time – namely, connecting a client’s individual goals directly to strategies and their portfolio. 
As well as improving a client's chances of achieving their dreams, goals based advice also makes the entire advice process more engaging and relevant. By placing their goals front and centre, clients are constantly reminded of the 'why' that’s driving them, and gives them a greater sense of control over the future.

The behavioural science of Goals Based Advice

Emotional response drives human behaviour.

Significant Emotional Events (SEE) don't just affect us emotionally, they can dictate our financial decisions, patterns and behaviour. Not only that, money is a subject that elicits strong emotional responses in all of us; feelings that shape our actions for better or worse.

People who feel empowered in their financial lives experienced more joy, peace, satisfaction, and pride. Not surprising, really – but what is interesting is that goals based advice actually provides a bridge to take clients from one state to another. 

Goals based customer experience & multi-dimensional modelling

Goals based modelling is multi-dimensional.

Modelling a household's financial circumstances and future scenarios has always been an important tool for financial planners. It is a critical element within the customer experience, to develop a robust and fact-based foundation around the advice financial planners provide to ultimately help clients meet their lifestyle goals.

Rather than looking backwards, goals based advice seeks to identify a client's future goals. By clarifying their priorities, time horizon and behavioural preference towards risk, goals based investing helps maximise a client's chances of success, using a more flexible portfolio design methodology.

Evolution of the Financial Adviser

FinTech, consumer and regulatory change is rapidly evolving the Adviser.

Accountant, investment quant, life mentor, actuary, and sales negotiator. These are some of the roles that financial planners have traditionally had to assume in their work with clients. It's no surprise that increasing regulatory pressure has resulted in many seeking to leverage technology, to redefine their business models, so they can reassert their focus on client relationships and the softer skills necessary to manage them.

If you would like to learn more about the future of Financial Planning Software, click below.