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jacqui henderson

Goals-based technology to shift industry

By Jacqui Henderson
5 minute read

Goals-based advice is not a new phenomenon. The Hayne royal commission has suggested that advisers inadequately demonstrate how their advice links to their client’s goals. However, financial planners have long been talking to clients about their goals.

So, where is the disconnect? Could the disconnect lie with the industry’s complex advice process, lengthy paper Statements of Advice (SoAs) and ‘old world’ technology?

Can we honestly say that the current “customer advice experience” is one that delights consumers? I don’t believe it does, nor do the consumers we’ve profiled.

The manual advice process, lengthy paper SoAs and ‘old world’ technology make up this disconnect. These are barriers that stand between an advice industry and a quality ‘customer advice experience’ for today’s tech-savvy consumer. Don’t be fooled into thinking that older generations don’t want a tech experience – the over 55s and 65s are now the second biggest demographic of Facebook users and online banking.


There are smarter ways that technology can help support advisers within a client-centric, goals-based approach. The industry must begin by shifting focus, align itself to what the consumer wants.

We are embarking on a period of significant change. We need new technology that supports an advice model that helps advisers to see more clients, lower their cost to provide quality advice, automate compliance and ultimately deliver an amazing customer experience.

So what does the consumer want? We asked that very question and can surmise with the following quotes:

Consumer 1:
“A goals based discussion around finance, that’s the key. Goals for me is the big thing.”

Consumer 2:
“I want the advice that I get to make sense to me personally, to be relevant to my goals.”

Consumer 3:
“I want to see it on my mobile, so that I can have live updates of my current position, how am I tracking to my goals, and see that visually. I think that would be very attractive.”

Consumer 4:
“Having something tailored to a goal you want to achieve I think is a better way to go.”

With this in mind, we believe that goals-based advice should be considered in the following three stages:

1. Goals conversations - This process is important as it draws out the client’s dreams, goals, values and behaviours. It sets a solid foundation for the adviser-client relationship, with the focus on what is most important to the client.

2. Goals-based advice - This involves the tech that supports the adviser-client conversation by exploring all the different what-if scenarios, trade offs and the client’s goal achievability. Together they can co-create the advice journey. This step visually demonstrates what advice scenarios provide the client the best outcome, helping them to understand the value of advice.

3. Goals-based investing - The “goal/risk tolerance” methodology allows individual goals to have their own risk tolerance and asset allocation, rather than the traditional one-size-fits-all risk profile approach. Investments are tied to client goal achievability.

Let’s take a deeper dive.

Goals conversation
This is a crucial step in the advice process. When goal conversations are well conducted, client engagement and participation increases. The client feels propelled towards pursuing the next step of the advice process. As a result of these discussions, advisers get to know their clients on a deeper emotional level.

It is important that advisers identify short-term goals, as well as long-term goals. An advice process that focuses on both long and short-term goals will have greater emotional engagement for the client, with more satisfaction around financial outcomes.

Goals-based advice
The goals-based advice process ensures a clients’ assets and income meets their goals through different life-stages.

By using interactive financial planning modelling tools, advisers can test different scenarios with their clients in real-time. Through stress tests, trade-offs and strategies, advisers can immediately illustrate the impact of different decisions on the client’s goal achievability.

Advisers can more easily identify the most optimal scenario to recommend as their advice. An instant online SoA can then be generated, alongside an interactive financial plan that the client receives on their own app. That plan can then be tracked with live data.

Tracking and optimising the client’s goals is where goals-based advice truly comes to life. It is the difference between transactional financial advice and relationship-based advice. This process empowers clients to focus on what they can control and achieve milestones along their financial life journey.

Goals-based investing
A goals-based asset allocation is a different way of approaching asset allocation. This method is more pertinent to the client’s individual goals and gives them greater ownership of the outcome.

Rather than putting the clients whole wealth into one bucket, advisers have the flexibility to tailor their investments to individual client goals and establish multiple, segmented wealth buckets.

As a basic example, consider a client with two goals. Goal one is to buy a nice boat, and goal two is to retire with dignity. Goal one may need a high-growth risk tolerance and goal two may demand a conservative risk tolerance.

With goals-based investing, advisers can allocate a different level of risk tolerance and asset allocation to each goal and track their achievability. The client review conversation, therefore, becomes focused on their goal achievability rather than market performance, which is more meaningful to clients.

Jacqui Henderson, CEO of Advice Intelligence