What is Goals Based Financial Planning?

In recent years, I've been exploring a concept called 'goals based financial planning,' and it's reshaped how I think about financial strategies.

The Essence of Goals Based Financial Planning

For those who are new to the concept, goals based financial planning is a framework that focuses on creating and implementing a plan centred around an individual's specific life goals and objectives.

Indeed, I’m now thinking this title uses four words when two would’ve done.

Maybe I’m too far down the rabbit hole, but the way I see it, there shouldn’t really be any difference between ‘financial planning’ and ‘goals based financial planning’ because, now I’m here, from this angle it simply doesn’t make sense to consider how you could do financial planning without having some form of goal or objective to base the plan on. What else are you planning for?

Client Perspectives on Goals

However, a good number of clients I speak to about financial planning and ask them what their goals and objectives are, they say they don’t have any. And I can relate to that. I’ve noticed in myself a reluctance to use this vocabulary as it can seem like an Americanism and can feel quite uncomfortable (but that’s a whole big subject in and of itself for another day).

But some people simply tell me they don’t have any distinct objectives. And I say that’s great, because what that means to me is that at least they’re not chasing someone else’s vision, or some version of keeping up with the Joneses. It means we can have a conversation and discuss “what is important about money to you” and hopefully maybe we’ll get to have a genuine consideration and a real personal strategy.

Because on the flip side, I think it is all too easy to chase other people’s goals.

Personalising Your Financial Goals

Getting back to Financial Planning, some people have concrete goals and objectives they’re working towards, like a new career, a new house, retirement, or a holiday.

Others are happy where they are, they’ve achieved what they wanted to achieve and have what they need; they have a certain level of comfort and satisfaction and long may that continue.

For those in the second group I’d say they still have goals, their goal is looking after what they have. And that’s an important goal to have.

Let me know if you’re actively pursuing a certain target or if your objective is to look after what you already have. Send me an email or contact me here. I’d love to hear from you.

Daniel S. Hanbury Ba(Hons) DipPFS

Financial Adviser & Director