Bridging Academia and Practice: A New Theory of Goal Setting in Financial Planning

Client goals play a central role in the financial planning process; however research and experience show that there are a number of challenges to eliciting and establishing client goals. We present a new theory of goal setting that seeks to explain the relationship between the types of goals pursued from the goal setting process and long-term client well-being. Finally, the role of financial planning researchers in identifying the most relevant threats and opportunities for clients, such as the impacts of climate change, is discussed and how this should be incorporated into the financial planning body of knowledge so that financial planners can improve clients’ adaptability and long-term well-being in the face of uncertain futures.

Learning Objectives:

1. Identify current challenges with goal setting in the Goal Setting Process and why Goal Setting Theory is needed.
2. Explain the relationship between the types of goals set and expected long-term client well-being outcomes.
3. Apply insights from the theory to the professional practice of financial planning.