I am drawn towards the world of numbers by nature, having pursued a degree in mathematics and ventured into the realm of actuarial science while working for an insurance firm, now part of Royal London. Though my journey stopped short of qualifying as an actuary, my inclination towards numbers remained unswayed.
Mark Twain cleverly remarked, “There are lies, damned lies, and statistics.” This saying rings particularly true in the realm of financial planning, where certain widely accepted conclusions may merely be misinterpretations of data.
A notable study commissioned by Royal London and carried out by the International Longevity Centre showcases a clear financial advantage for individuals who received financial advice between 2001 and 2007. By 2012 to 2014, these advised individuals had significantly higher liquid assets and pension wealth, averaging a total benefit of £40,000 to £43,245.
The research demarcated two demographic segments: the ‘affluent’ and the ‘just getting by’. Financial advice proved beneficial across the spectrum but was markedly impactful for the latter group, aiding in narrowing the wealth gap to an extent.
The findings also highlighted a positive behavioural impact; individuals who received financial advice were more inclined to save and invest, particularly in the equity market. Moreover, the advised groups enjoyed higher pension income, underscoring the long-term value of financial advice.
Ben Franklin and Sir Steve Webb’s reflections in the study spotlight a systemic challenge: the underutilisation of financial advice, especially among those who could benefit the most. They urge the industry and regulatory bodies to enhance accessibility and engagement to amplify the positive impact of financial advice.
The aim of fostering inclusive financial advisory services, accessible to individuals across the financial spectrum, resonates strongly with the mission of the Academy of Life Planning. It highlights the potential of non-intermediating financial planning in democratising financial wellness and contributing to reducing wealth inequality.
The research indeed underscores the tangible value of financial advice, mirroring broader themes of financial inclusivity and empowerment. It lays a robust foundation for advocating the broader adoption of financial advisory services, aligning with the ethos of transparency, integrity, and universal access.
However, a subtle yet significant bias underpins this study. The perceived financial benefit was essentially wealth preservation for those receiving advice, wealth generated by the individuals, not their advisers. The advisers merely selected individuals who had accumulated more wealth, and the provider perceived what they wished to perceive.
This subtle selection bias mirrors a similar bias in life planning. If a significant portion of the population lives from one pay cheque to the next, it’s easy to conclude that more money brings more happiness.
Transitioning to a Deeper Understanding
The narrative of financial prosperity correlating with happiness is a simplistic one, often failing to account for the complex human experience. As we transition into a discussion on Spiritual Intelligence (SQ), we delve into a deeper understanding of how evolving consciousness can significantly impact our financial priorities, perceptions of wealth, and holistic wellbeing. The intertwining of SQ with financial planning unveils a more nuanced approach to fostering financial wellness, transcending mere material accumulation.
The narrative of ‘more money equals more happiness’ is deeply ingrained in our societal psyche, often fuelled by the underlying egoic stages of psychological development. The desire for more, propelled by the ego’s insatiable appetite for security, status, and satisfaction, often guides our financial decisions and perceptions of happiness. However, as we age and potentially evolve in our Spiritual Intelligence (SQ), the pursuit of material wealth may give way to deeper, soulful desires for meaning, connection, and holistic wellbeing.
Exploring the Realm of SQ and Financial Planning
Spiritual Intelligence signifies a profound level of awareness, where one transcends the egoic preoccupations with material and societal validations, entering a realm of deeper understanding and connection with the broader tapestry of life. This evolution in consciousness is not merely a philosophical or spiritual endeavour; it holds substantial implications for financial planning and personal financial wellbeing.
A financial planner’s role is not merely to chart a course through the numbers but to navigate the nuanced human experience that those numbers represent. The dynamics of SQ introduce a layer of complexity to this journey. As individuals advance in age and possibly in SQ, their financial priorities and definitions of ‘wealth’ and ‘wellbeing’ may shift. The conventional metrics of success and happiness, often centred around material accumulation, may no longer resonate. Instead, a desire for meaningful experiences, relationships, and contributions to the larger community might take precedence.
Anticipating and Addressing the Evolution of SQ
How then can a financial planner reconcile the evolving landscape of SQ in their practice? A proactive, adaptable approach is crucial. Anticipatory planning that envisions potential rises in SQ, alongside regular reviews of the financial plan, can help ensure alignment with the client’s evolving values and life circumstances.
Educational engagement around the concept of SQ and its potential impact on financial priorities could foster a deeper understanding and preparation for possible shifts in values over time. Scenario planning exploring different levels of SQ and their implications can also be a valuable exercise.
Moreover, adopting a holistic approach to financial planning from the outset, considering not just financial goals but also personal, emotional, and spiritual aspirations, can provide a more rounded, resilient financial plan. This holistic approach aligns well with the ethos of transparency, integrity, and universal access advocated by initiatives like the Academy of Life Planning.
Lastly, maintaining open, client-centred communication is key. Encouraging clients to share any shifts in their values or life outlook as they occur can help in adapting the financial plan in a timely manner, ensuring it continues to serve the client’s holistic wellbeing.
Revisiting the Happiness Conundrum
The correlation between income, consumption, and happiness, as perceived from different levels of SQ, unveils a complex narrative. The ‘more is better’ narrative may hold sway in the ego-driven stages, but as one transitions towards higher SQ levels, the narrative may shift towards ‘enough is plenty’. This shift underscores the need for a more nuanced, holistic approach in financial planning that transcends the simplistic equation of more money equalling more happiness.
In conclusion, as financial planners and individuals aspiring for financial wellbeing, acknowledging and integrating the dynamics of Spiritual Intelligence into the financial planning process can pave the way for more aligned, meaningful, and fulfilling financial journeys.
Academy of Life Planning 