What a client is seeking when they engage a financial planner has been the subject of many studies.

    Many advisers (and the Financial Conduct Authority) think the main thing most clients want is advice on their money. Personally, I think the thing clients appreciate most is having outcomes that help them achieve life objectives.

    But there is one outcome many clients receive from their relationship with their professional advisers that doesn’t get recognised enough: permission.

    Who gives permission?

    Permission comes in many forms. For example, there is the financial planning process itself. The client gives you their objectives, you create a cashflow along with some product-specific financial advice. This process demonstrates that their objectives are both achievable and reasonable.

    Often the permission comes from another person. A look from one person to their partner to confirm that a bucket list item is an acceptable target for the cashflow, for example.

    Then there is the very fact that they’re seeking advice from a professional, rather like a financial placebo effect. “My financial planner said it would be ok.”

    You don’t even need to be present to provide this type of permission. If you have agreed a clear set of objectives with a client in compiling their financial plan, then they may well think of you before taking action in breach of that plan.

    This permission role of financial planners is something I think should be acknowledged more often. If I accept that I’m giving permission to someone, I’m more likely to ensure that what I’m giving permission for is actually the best thing for them.

    Which might lead to you offering a challenge to those life objectives.

    Setting objectives

    Many of our life objectives are set by reference to others. As someone once said: “Happiness is when you earn more than your sister-in-law’s husband”.

    Another word that expresses the concept of permission is acceptance. We often set our objectives based on what we see other people see as desirable or enjoyable. Whether through social media, advertising, or the celebrities we choose to emulate, it’s inevitable that our behaviours and objectives will be inspired by what we see around us.

    But we’re only seeing what others want us to see, not the reality of their lives, and whether their achievements are making them happy. Consequently, our behaviours and objectives do not always align to our own best interests.

    When a client tells you their objectives, how can you know if achieving those objectives will make them happy? Was that even a consideration when those objectives were set, or were they based on other criteria?

    This is where your role as a professional adviser really comes in to play. Your role is one that gives the client permission, and therefore you are also in a position to offer that challenge. To do so will help the client understand themselves better – but for it to be successful you need to base your challenge on two things:

    • The clients’ values, not your values
    • The factors that contribute to our wellbeing that are true of all of us

    There is a huge body of research into the sources of joy. Understanding these factors, and then applying them to a client’s values (which is one way of expressing financial wellbeing) is likely to make a huge difference to the outcome of your advice.

    In this way you will be giving your client permission to be happy, which is surely the ultimate outcome any client is going to want.

    Chris Budd’s new book, The Four Cornerstones of Financial Wellbeing is available now. For more information about the Financial Wellbeing Certificate, visit the IFW site.

    Start the discussion

    Add a comment