How to help when clients have competing financial goals

Most people genuinely want to make sound financial decisions and plan for their future. They understand the importance of saving for retirement, investing, protecting their income and creating a secure financial foundation for their families. However, the path from good intentions to actual implementation isn’t always straightforward.

The reality is that immediate needs often overshadow long-term financial planning, creating a complex web of competing priorities for your clients to navigate. Understanding what these competing priorities are and helping clients balance them effectively is crucial to your role as a trusted financial advisor.

Identifying competing priorities during financial planning

What are these competing priorities – and how can you help your clients navigate them? We’ve noted a few that are the most commonly shared:

• Current financial demands versus long-term financial security. It’s human nature to consider short-term financial needs over long-term financial planning. Clients may find it difficult to focus on investing, saving for retirement or planning for the future when facing pressing immediate expenses and once-in-a-lifetime opportunities. When this happens, it’s not unusual to want to address what’s urgent over what’s important.
  
  Situations like these present an opportunity for advisors to demonstrate how even modest contributions to retirement savings can grow significantly over time through compounded interest and investment gains. Advisors can also help their clients explore financial planning strategies that balance growth and protection and create options for predictable income. These financial strategies maintain focus on keeping the client’s family financially secure. 
• Lack of time to plan now versus reduced stress later. Setting aside time to think through and engage in financial planning for long-term goals can feel like a big task, especially for people with demanding careers, raising young children, assisting aging parents or caring for an ailing spouse. Many clients struggle to carve out space in their packed schedules to think about and prepare for their families’ future.
  
  This competing priority can often be addressed simply by reminding clients how investing time toward thoughtful financial planning can actually save them time and reduce stress later. By establishing clear financial strategies early, clients can also improve the chances of reaching their long-term goals.
• Short-term emotional discomfort versus future peace of mind. Some clients may find it uncomfortable to discuss certain aspects of financial planning, particularly when it involves considering their own mortality or what happens after the loss of a loved one. The decision-making process can also feel overwhelming, leading many clients to shut down and avoid financial planning altogether.
  
  Here, again, is an opportunity for advisors to help clients realize that short-term discomfort can decrease long-term anguish. Advisors can encourage clients to proactively address sensitive topics by not only providing additional education and answering questions, but also gently nudging them to make critical decisions for themselves and their families. Doing this effectively will require patience, active listening, and the ability to know when to push the client outside their comfort zone and when to let them be. Advisors can also remind clients that financial planning now can help them get ahead of potentially tough decisions later.

Help clients strike the right balance 

Every client faces competing priorities in some form, and this is an opportunity for advisors to help them navigate these challenges effectively. Active listening is particularly crucial in this process; by truly understanding clients’ goals, advisors can better motivate them to take appropriate action to address both short- and long-term priorities.

Regular, targeted communication and education can also help clients understand the importance of long-term financial planning for themselves and their families. By organizing recommendations into “Now, Next and Later” categories, advisors can help clients gain a clear view of the sequence of steps needed to achieve their financial goals.

Help clients prioritize during financial planning

Here’s what you can do to help clients address competing priorities:

• Identify what’s urgent versus what’s important for the client, as well as what’s potentially holding them back from making long-term decisions. This can give you better insight into what to address in their financial plan.
• Use visual illustrations where appropriate to show the trade-offs and impacts of each decision the client makes.
• Set realistic expectations for clients and develop a laddered approach to reaching their goals. In some cases, you may need to seek out creative solutions to address multiple priorities simultaneously.
• Employ active listening, ongoing education and targeted communication to stay connected with the client and make sure you understand what’s most important to them – even if their priorities change over time.

Effective strategies for navigating competing priorities

Financial advisors can employ several strategies to help clients effectively balance competing priorities. Visual representations of financial decisions can be powerful motivators. Illustrating both the short- and long-term effects of various strategies can clarify the trade-offs and help clients make informed decisions.

Setting realistic expectations is also critical. It may not be possible to address or accomplish all goals at once; for example, a client may not be able to fully fund their retirement account while managing current expenses. Instead, advisors can help identify what they can realistically do now and develop a laddered approach to reaching their goals.

In some cases, however, there may be creative solutions for clients to address both immediate and long-term financial planning needs simultaneously. This might involve leveraging existing policies or accounts in new ways, such as executing a 1035 exchange of an old life insurance policy into one with improved features. Or the client might consider a Roth conversion during a lower-income year to reduce their future tax burden. Advisors might also be able to identify areas where clients can reduce current expenses or make small adjustments to their current spending to free up resources for long-term goals.

Balance competing priorities today for a more secure tomorrow 

Most clients want more than just financial advice; they’re looking to advisors to help them navigate the complex balance between immediate needs and long-term security. By understanding and addressing these competing priorities effectively, advisors can help clients build a more secure future while managing their current needs.