If clients could simply accomplish everything they wanted, at once, with the resources they had, financial planning would be unnecessary. It would simply be a world of instant gratification, as needs were satisfied on demand. Of course, in the real world, we can’t simply have anything/everything we want whenever we want. Resources are limited, and as a result financial planning is essentially about trade-offs. We must prioritize which goals are most important to achieve, and allocate resources to them, recognizing that this means money may not be left to satisfy other goals (or wants or desires). Thus, in practice we might say that the essence of financial planning is to help clients prioritize trade-offs, and decide what goals will be satisfied first (and which will be second, and which won’t be done until third, etc.).
However, in financial planning we have a problematic tendency to just “dump” a long list of recommendations on clients, with either an implicit expectation that they will implement everything, or with a series of priorities that the advisor (not the client) establishes as “the expert” as being most important. Yet behavioral research suggests that this can be daunting, overwhelming, or sheerly unmotivating for clients. In an effort to be comprehensive, protect ourselves from liability, and demonstrate the thoroughness of our expertise, we may be getting clients stuck into an analysis-paralysis paradox of choices, or worse simply overwhelming them into inaction.
Ultimately, the key may not merely be to give clients a comprehensive list of recommendations, or to tell them what steps they should take next, but instead to help them make the choice of what’s most important to them and then hold them accountable to follow through on it. Accordingly, the ideal “Action Items” list for clients shouldn’t just delineate everything the planner recommends in order, but be offered to clients with a series of blanks where they can fill in what’s most important to them, what they will commit to do, and when. The goal is not to get everything done immediately, but instead to begin a process of incrementally getting a little done between (or at) each meeting, until the entire financial plan is finally implemented (and of course, by then it will be time update, change, and adapt accordingly in a continuous planning process!)!