The Value of Goals-Based Planning

For investors, the benefits of goals-based planning are obvious. This approach puts their financial aspirations at the center of their investment strategies and consistently ensures the two are in alignment, making it far more likely they’ll actually achieve their goals. Clients understand and even demand this – in fact, investors rank managing toward personal financial goals as the top three most important features of managed accounts.¹

And for advisors, the value of aligning a goals-based plan with its implementation can’t be overstated. In particular, leveraging this approach enables four critical ways to improve client relationships while driving business growth:

1. Enhanced Client Conversations
   Goals-based planning transforms discussions traditionally focused on performance into meaningful conversations about clients' life goals. By using real-world needs—such as buying a home, funding education, or retiring comfortably—as a conversational cornerstone, advisors can tailor their advice to each client's unique situation. This personalized approach fosters deeper relationships and builds trust by helping clients see how each investment decision impacts their financial health and future.
2. Increased Perceived Value
   Reporting on goals-based planning allows advisors to illustrate their value far beyond traditional performance benchmarks. By reviewing clients' goals, timelines, and allocations, advisors can demonstrate how they are helping clients stay on track to achieve their financial objectives. This detailed approach provides clear evidence of the advisor's contributions to the client's success, enhancing their perceived value.
3. Positioning for Generational Wealth Transfer
   With a significant generational wealth transfer on the horizon – a reported $84.4 trillion by 2045, with 86% set to transfer between generations – advisors need to make sure they’re managing these transitions effectively. Goals-based planning helps advisors understand the financial goals of different family generations, improving retention of assets under management. By engaging with both older clients and their heirs, advisors can build trust and ensure a smooth transition of wealth while securing future business for their firm.
4. Uncovering Held-Away Assets
   A comprehensive goals-based planning approach often reveals assets that clients have not integrated into their primary financial plans. By identifying and incorporating these held-away assets, advisors create a more comprehensive experience, offer a truly complete picture of their clients’ financial landscape, and increase the likelihood of achieving the client's goals. Adopting a 360-degree approach to wealth management results in ‘significantly higher growth rates,’ according to a study conducted by WealthTech, along with greater success closing cross-selling opportunities.²

How Can Advisors Take Advantage of These Benefits?

Realizing the benefits of goals-based planning is nearly impossible for advisors without the right technology. The burden of manual processes, unscalable operations, and significant decreases in productivity will rapidly overtake any value generated by the approach. 

Luckily, advances in technology enable advisors to take advantage of a goals-based approach to financial planning at scale, without hits to productivity and while continuing to empower the ability to operate efficiently.

In our whitepaper, The Power of Goals-Based Financial Planning: How Technology Helps Advisors Improve Client Relationships and Drive Growth, we explore the ways technology helps advisors enhance client relationships, increase their perceived value, and position themselves for future success.

1. Cerulli US Managed Accounts, 1Q 2024 Issue.

2. Certain information contained herein has been obtained from third party sources and such information has not been independently verified. While such sources are believed to be reliable, Vestmark Advisory Solutions does not assume any responsibility for the accuracy or completeness of such information.