Advisers have been urged to try to understand a client’s unconscious beliefs in order to ensure they stick to their financial plan.
Speaking at the Intelliflo Change the Game conference today (November 4), Catherine Morgan, adviser and financial coach, said a client’s unconscious belief systems would drive whether they were “intrinsically or extrinsically motivated”.
This, in turn, could help advisers understand if their clients were “trying to move away from something like scarcity or fear” or “seeking new pleasure in their life”, which could shine a light on their underlying motivations and therefore, what would make them stick to a financial plan.
She said: “What we want our clients to be doing when we build financial plans is to relate it to what is going to internally motivate them, which is going to be long-term towards something pleasurable.
“This is where looking at their unconscious patterns is really valuable. You can ask clients, what are your values? What guides them to do what they do every single day?
“If you think about what makes you really mad and cross, or perhaps really satisfied, those are a guide to what your values might be.”
Ms Morgan told the adviser listeners that a client’s relationship with money stemmed from several different places, such as generational trauma — inheriting beliefs about money from parents and grandparents —, societal influences such as social media, or the ‘keeping up with the neighbours’ pressure, or cultural and religious beliefs.
She said: “When we take this into the context of motivation and values, we can seek to really understand what is driving our clients to be motivated.
“But we often look at the logic-based side of money, involving cash flows and yields and drawdown amounts, and this doesn’t help clients change how they think and feel about money.”
According to Ms Morgan, some 90 per cent of decisions made stemmed from these unconscious beliefs which were likely underpinning how clients act with their money.
Behavioural science within financial planning is becoming a growing phenomenon, with some commentators claiming that the relationship between the adviser and client is more important to financial returns than asset allocation.
imogen.tew@ft.com
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