One of the apparently simple questions in financial planning is also one of the hardest to answer properly: what do you actually want?
Most clients will have an answer. They might want to retire at 60, travel more, pay off the mortgage, spend more time doing the things they enjoy or simply know that they will be financially secure. None of those answers is wrong, but I am increasingly convinced that accepting them at face value means we risk starting the planning process too far down the road. They are often conventional answers to conventional questions, given by people who have never really had the opportunity, or perhaps the reason, to think much more deeply about what they want the next part of their life to look like.
Take retirement. A client tells us they want to retire at 60 and it is very easy for the conversation to move almost immediately towards whether they can afford to do it. We gather the numbers, establish their expenditure, look at their pensions and investments, make some assumptions and start modelling age 60. Yet there is a more fundamental question that ought to come first: why 60?
The answer might tell us far more than the retirement date itself. Perhaps they are tired of their current job. Perhaps they enjoy their work but no longer want the pressure or responsibility that comes with it. They might want greater control over their time, or simply believe that 60 is when people like them are supposed to retire. It is entirely possible that what they really want is not retirement at all.
That is why I think we need to understand the life before we start costing it.
If someone says they want to retire, I want to know what they imagine themselves doing with their days. If they want to travel, I want some sense of what travel means to them. Are they a six-star-resort couple or silver Eurorailers? Are we talking about two good holidays each year or disappearing for several months at a time? The answer changes the financial picture, of course, but that is not the only reason for asking. It helps turn an abstract aspiration into something the client can picture, discuss and begin to make real.
The same applies to the language we use around freedom. A client might tell us that they want financial freedom, but that statement only becomes useful when we ask what freedom actually means to them. If the answer is that they no longer want to have to work, there is another distinction worth exploring. Is it their actual job they want to escape from, or work entirely? Those are not the same thing. Someone who enjoys much of what they do may not need a retirement plan so much as a plan that gives them the financial independence to work differently, reduce their hours, take less responsibility or choose work because they want to do it rather than because they need the income.
This is where good questioning becomes more than an exercise in collecting objectives. Sometimes we need to challenge the assumptions contained within the client's original answer, albeit nicely. Not because we know better than they do what they should want, but because the first answer may simply reflect the boundaries within which they have always thought.
One of the most important of those boundaries is later.
We are very good at putting life off. Travel when I retire. Enjoy the money when I have stopped working. Do the things on the bucket list when I have more time. Financial planning can accidentally reinforce that behaviour because so much of what we do is necessarily concerned with preparing for the future.
But why later?
If somebody dreams of travelling for three months once they retire, have they ever asked their employer whether they could take a sabbatical? Perhaps the answer will be no. Perhaps financially it will prove impossible. But perhaps nobody has ever asked the question. The point is not that a sabbatical is inherently better than waiting until retirement. The point is that the client should understand the choices available before deciding which one they prefer.
That requires us to let people dream a little before we start introducing constraints. Some clients naturally underestimate what might be possible. Others will want more than their resources can reasonably support. Some will have arrived at broadly the right balance already. We do not necessarily know which is which at the beginning, which is why I would rather get the ambitions onto the table first and compromise later.
That doesn't mean encouraging fantasy for the sake of it. It means creating enough space for clients to say what they would actually like without immediately editing every thought through the filter of affordability. What's on the bucket list? What have they always wanted to do? What have they quietly given up on? What might they do differently if they discovered they had more freedom than they thought?
There is value in revisiting those abandoned ambitions. Our past experiences often frame our current choices and even the language we use to describe them. Understanding some of that history can help an adviser interpret what a client is really saying now. It can also explain why something that seems relatively unimportant from the outside carries considerably more meaning to the person sitting opposite us.
That is also why I am wary of advisers deciding what constitutes an essential and what constitutes a luxury. The distinction is deeply personal. For one person, visiting the garden centre regularly may be an important part of the life they enjoy. For another, owning a particular car genuinely matters. Neither needs to be justified against the adviser's own preferences. Our job is to understand what is important to the client and, later, help them see the consequences of the choices they make.
There are also wider family ambitions that inevitably emerge in these conversations. Clients may talk about helping their children, gifting during their lifetime rather than waiting until death, or other things they want their wealth to achieve for the people around them. Those questions deserve much deeper consideration in their own right and will become part of Map 3. For now, their appearance is another reminder that people's financial lives cannot always be divided neatly into isolated objectives.
Couples make this particularly apparent. Two people can both say that they want to retire at 60 while carrying completely different pictures of what retirement means. One may imagine travel and constant activity while the other anticipates spending more time at home and enjoying a slower pace of life. Good planning has to make room for both perspectives rather than quietly treating the couple as though they have one set of wants simply because they share a financial plan.
We should also be comfortable with uncertainty. Not everybody knows what they want and I don't think we should expect them to. “I'm not sure” is a perfectly legitimate starting point. It is unreasonable to expect someone to arrive at a financial planning meeting having already designed the next thirty or forty years of their life. Part of the value of planning is helping them explore it.
Indeed, this is where cash-flow modelling can become much more interesting than a tool for demonstrating whether the money lasts. Once clients can see different futures in front of them, their thinking often changes. In my experience, clients approaching retirement are frequently more pessimistic about their position than the eventual modelling justifies. When they discover that they may have more capacity than they thought, a very interesting sentence often follows:
“Well, if that's the case, perhaps we could…”
That is the point at which modelling becomes part of discovery rather than merely the output of it.
We have explored what somebody wants, translated enough of that life into numbers to begin modelling it and shown them what might be possible. They respond by reconsidering what they want. We can then explore again. The process is iterative because people's lives are iterative. Wants change, circumstances change and the relative importance of different things changes over time.
There may also be different phases to consider. The active years of later life may contain considerably more travel, experiences and activity than the quieter years that follow. Someone's idea of a good life at 55 will not necessarily be the same at 75. Trying to reduce all of that to one flat assumption about “retirement expenditure” may make the numbers easier, but it doesn't necessarily make the planning better.
Perhaps this is why I increasingly think we should separate life wants from financial targets. “I want £50,000 a year from age 60” is a perfectly legitimate financial target, but it isn't really an explanation of what somebody wants. Until we understand the life that £50,000 is intended to support, the precision of the number can give us a false sense that we understand the objective.
There is a broader idea behind all of this. Full-fat financial planning, to borrow the term used by The Real Adviser Podcast, asks us to look at considerably more than the isolated financial problem in front of us. It means trying to understand the client in the context of their assets, their family, their dynamics, their past, their present and the future they are trying to create. Not every client will immediately see the value of going that deeply. I don't think the answer is to insist that they participate in some grand planning philosophy. It is to show them how understanding more of the picture can produce a better answer to the question they actually came in with.
A client may walk through the door asking, “Can I retire at 60?”
Perhaps our greatest value isn't immediately telling them yes or no.
It may be helping them discover that they have been asking the wrong question.