Values drive Goals

Values drive goals

The Personal Advice Equation (memory hack) can be summed up as follows:

SMA + CRC = A (S + P)

Where …

• SMA = Subject matter of the advice sought by the client (implicit and explicit)
• CRC = Client’s relevant circumstances (including objectives, needs, and financial situation)
• A (S + P) = Advice provided by the adviser, including both strategy and product (if relevant)

Remember …

“A goal is an achievable outcome that is typically broad and long-term.  An objective, on the other hand, defines the specific, measurable, and prioritised actions to achieve the overall goal.  To sum it up, the main difference between a goal and an objective is that goals provide direction whereas objectives detail how you should follow that direction.” 

If a client’s goals are at core of the personal advice process, then what is at the core of the client’s goals?

The answer is simple:  an individual’s unique perspective based on their own set of core values.

‘Values’ can be defined as “principles or standards of behaviour; one’s judgement of what is important in life.”

Values are like a compass that keep us headed in a desired direction and are distinct from goals. Goals are the specific ways you intend to execute your values, and objectives help these identified goals to be achieved.

The “discovery process”

The discovery process between client and adviser is critical to a successful outcome for all.  All too often, at Fourth Line, we see scant information and a lack of investigation when it comes to understanding the client.

It’s not just about the client’s tangible financial situation; it’s also about the intangible aspects that impact on the client’s decision-making process.

Understanding a client from the inside out is key to providing advice that is in their best interest and appropriate.

Paul Moran stated in is recent article:

“Financial planning is effectively applied behavioural finance.  The personal nature of quality advice requires advisers to treat clients as individuals rather than the market. Advisers must actively observe and listen to their clients. They must watch and read what their clients do to anticipate the questions they may ask …”

Michael Topper added some further insight in his recent article when he stated:

“Product, service, strategy, and goals are all still essential ingredients in the financial planning process. However, values add an extra layer. Understanding clients’ values better equips you to help them realise their dreams, achieve their goals, and fulfil their purpose.”

Values are a key driver in all our decision-making processes.  Helping clients to better understand their own core values can lead to more targeted goal setting, better defined objectives, and, ultimately, advice that will help them design and determine a life that aligns with their core beliefs.

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Fourth Line is a rigorous RegTech risk management and compliance system for advice practices, dealer groups and other wealth management participants. Fourth Line uses algorithmic approaches to simplify the complexity in advice reviews whilst maintaining human oversight, empowering compliance teams to coach and develop strong advice behaviors through data driven insights from advanced analytics for adviser, practice/dealer group and industry benchmark comparison with centralised document storage and access to meet regulatory needs. 

For information email: info@fourth-line.com.au