Yet we build plans around them.

Goal-based financial planning has become the gold standard in modern advice, shifting the focus toward life goals, with the investment portfolio positioned in service of those goals. The flaw, however, is that it assumes clients can clearly articulate goals that genuinely reflect their deepest values.

We have built an advice model around client goals without fully questioning whether clients truly understand them in the first place.

Financial advisors are not life coaches and pretending otherwise creates a gap between promise and reality.

Money is one of the least openly discussed topics in most households. Many people grow up without ever having thoughtful, structured conversations about finances. Even between spouses, money can remain a source of discomfort. Yet the industry often assumes that clients will arrive ready and able to articulate their deepest priorities with clarity. In practice, conversations about money are difficult before they are ever insightful.

This tension becomes most visible in goal-based planning.

It is rightly considered a major advancement in financial advice. It shifts the focus from products and performance to purpose and outcomes. But it rests on a fragile assumption: that clients understand their own goals clearly and can rank them meaningfully.

Evidence suggests otherwise.

People are often only partially aware of what they truly want. Their goals are shaped by context, influenced by others, and prone to change as life unfolds. Even when given more time to reflect, clarity does not necessarily improve. Goals evolve, priorities shift, and new information reshapes what once felt certain. This creates a structural challenge: financial plans are built on inputs that are inherently not stable.

Layer onto this the problem of future discounting.

When individuals feel disconnected from their future selves, long-term planning weakens. The future becomes abstract, almost like a different person who will deal with the consequences later. Immediate rewards take precedence, not because people are irrational, but because their psychological connection to the future is thin. This concept, known as future self-continuity, reflects how closely individuals link who they are today with who they will become.

Then there is the nature of the goals themselves.

Intrinsic goals such as relationships, growth, and meaning are consistently linked to well-being. Extrinsic goals like money, status, appearance are not. Yet financial planning conversations often gravitate toward the latter because they are easier to measure and discuss.

This raises a question: should advisors be responsible for helping clients uncover more meaningful, intrinsic goals? And if so, are they equipped to do it?

This is the dilemma at the heart of modern advice.

Either we assume clients have clarity (they don’t), or we assume advisors can coach that clarity into existence (many cannot and should not be expected to).

That does not invalidate goal-based planning but to my mind it does redefine its limits.

Financial planning is not a precise science of optimization. It is an ongoing process of discovery, adjustment, and imperfect decision-making under uncertainty. Human bias, limited self-awareness, and changing preferences are not exceptions to the process. They are the process.

So where does that leave the advisor?

Not as a therapist. Not as a life coach. But as something both more realistic and truly valuable.

I believe that the advisor’s role is to design and uphold decision-making frameworks that protect clients from their most predictable mistakes.

This means creating structure where human behaviour is unreliable. It means introducing friction when emotions run high. It means slowing clients down when fear or greed pushes them toward short-term decisions that undermine long-term outcomes. It means repeatedly reconnecting clients to their stated intentions, even when those intentions evolve.

Advisors do not need to do the “inner work” for clients. But they can create the conditions that make that work more likely. Through better questions. Through deeper active listening. Through a genuine effort to understand the client’s story. Not listening to sell, but to guide the process of thinking itself.

This is a more honest and sober positioning. Also, a more powerful one.

The value of advice does not lie in having perfect answers about a client’s life. It lies in building guardrails that keep clients safe when their own decision-making becomes fragile.

Goal-based planning remains an important evolution. But like all evolutions, it introduces new demands.

It should not demand of advisors to become something they are not. It does create the opportunity to become something very valuable: Architects of better decisions.

 

Written by Marius Kilian

 

Source

* “Difficulties with Goal-Based Financial Planning: Humans Are Not Good at Goals”, Brendan Pheasant and Megan Lurtz, financialplanningassociation.org, Mar 2026