Training Your Clients to Be Flexible (but Not Fickle) With Their Goals

Preparing clients for a change in plans is part of good planning.

But I posit that goal flexibility not only is part of good financial planning but also something advisors should be introducing to clients.

Why Flexibility Is Key to Good Financial Planning

Financial planning requires advisors and clients to plan for a future that not only doesn’t yet exist but also may never exist.

The future is in flux, and a client’s ability to achieve all their financial goals depends on more than having a good advisor to help them get there. Other things that may hold them back include unexpectedly bad markets (think, the “lost decade”) or changes in clients’ personal lives.

That’s why clients need to be flexible with their goals or redefine what it means to hit their goals.

If they can do this in a productive way, they will be happier with their outcomes, even if it looks different from what they initially imagined. If they can’t do this, they may not only be unhappy with their outcomes but also may lose motivation to continue with other parts of their financial plans. So, although you don’t want clients to be fickle with their goals, you do want them to have some flexibility.

Clients Need to Learn to Be Flexible With Goals

Unfortunately, it’s not always easy to get people to think flexibly about goals—especially when they’re already set.

One reason for this is because people may stay committed to goals that no longer suit them simply to save face. We all want to look good to ourselves and others, so clients may shy away from changing goals because they don’t like what it may say about them: They may feel like it makes them flighty, a quitter, or a failure.

Second, there is the endowment effect. This is our tendency to value things that belong to us at higher than their actual value. Clients may be reluctant to relinquish goals that no longer hold true value to them because they are their goals.

Finally, there’s the fact we can get attached to the future we envisioned, making us rigid about what that looks like. It makes sense for clients to imagine the future they’re working toward, but sometimes that future is no longer an option or what they want, and it may be emotionally difficult to move on from it.

How to Teach Clients to Be Flexible With Goals

Goal flexibility can benefit your clients, but it may not be something they are comfortable with. Advisors who teach their clients how to be reasonably flexible with their goals can help clients change course when needed to still have positive outcomes.

1. Teach clients early on that revision is part of the process. A great way to introduce this to clients is by using a goal-setting exercise. This one, for example, has clients list their goals, then look at a list of common goals, and finally relist their goals. This process teaches clients (in a nonjudgmental way) that there’s nothing wrong with changing their goals. In fact, it shows how revising goals can be good because it helps them get closer to a reality they actually want. By teaching clients early on that changing goals is not only normal but sometimes good, advisors can help combat problems with clients being inflexible about goals to save face.
2. Help clients identify the values that undergird their goals. We call these values “deeper goals.” Unlike tangible, achievable goals, “deeper goals” help clients identify why they care about those tangible goals in the first place. For example, perhaps a client’s tangible goal is to retire at a younger age. But maybe this goal stems from them valuing exploration and wanting to have more time to travel while their health is still good—that’s the deeper goal. Knowing this motivation can help you and your clients find more flexibility. Say early retirement isn’t in the cards financially for your client or they realize they don’t really want to stop working altogether—there may still be a way for them to prioritize exploration and travel that’s more feasible. When you and your clients understand their values, you can work together to help create a new future for them to work toward when needed.
3. Help clients understand the trade-offs to sticking to or changing goals. There may be a point where clients find that they have a new goal but are reluctant to abandon a goal that they already “own.” Advisors can help these clients by providing them concise breakdowns of what they are leaving behind or giving up by sticking to this goal. This kind of exercise can help clients realize the true value of their older goal that may no longer serve them and make them more confident in changing course.

Advisors already know the importance of getting clients to define meaningful goals. In teaching them to be flexible with them, advisors ensure clients are working toward a positive outcome regardless of what has changed for them.

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