A client says she wants to retrain.
The conventional planning question is: Can she afford the course? That matters. But it is only one part of the decision.
Can she afford the time away from paid work? Is her health holding up? Who depends on her income? Is the training accessible from where she lives? And if she completes it, will she have a realistic opportunity to use what she has learned?
These are questions about human capital: the knowledge, skills, health and capabilities that help people earn, adapt and participate in life. They are also questions about agency. A choice written into a plan is of little use if the person cannot act on it.
Six papers on human capital offer some useful lessons for Total Wealth Planners. They come from different countries and use different methods, so they cannot give us a single formula for an individual client. Together, though, they challenge a familiar habit: treating financial assets as the whole of someone’s wealth.
Aspiration needs a route through
Lucia Rizzica’s research on UK education policy found that an intervention raised pupils’ aspirations and increased the likelihood that they stayed in education after 16. It did not raise university entry overall. The improvement in university entry appeared among pupils from better-off families.
That is a distinction planners should sit with. Helping someone see a possibility matters. So does asking what stands between the person and that possibility.
A client may be motivated to change career but unable to absorb a period of lower earnings. Another may understand the value of training but have caring responsibilities that make attendance difficult. If we call either person “unmotivated”, we may be mistaking a constraint for an attitude.
The planning question becomes: What would make this option genuinely available?
The same opportunity can have a different cost for different people
In another part of her thesis, Rizzica studied an expansion of local university provision in Italy. Women’s enrolment increased; men were more likely to switch from studying away to studying locally. Her interpretation is that moving away carried greater costs beyond money for women in that setting.
For a planner, the lesson is to look beyond the advertised price of an opportunity. Travel, safety, family expectations, disability, time and emotional strain can all affect whether an option is usable.
This does not mean predicting a client’s constraints from their demographic group. It means asking them what the option would require in their life.
Health and learning belong in the same conversation
Amparo Castelló-Climent and Rafael Doménech examine a link between unequal education, life expectancy and the incentive to invest in education. Their model and cross-country evidence suggest that these disadvantages can reinforce one another across generations.
A national pattern cannot tell us how long any client will live or what decision they should make. It does, however, expose a weakness in plans that treat health as a footnote to earnings.
If someone’s ability to work depends on managing a health condition, protecting their income may involve time, flexibility and access to care alongside any financial provision. If a course offers higher potential earnings but would exhaust someone already under strain, the projected salary is an incomplete measure of its value.
Human capital is more than earning power. It includes the conditions that allow a person to use that power.
Capability can grow, be maintained and become vulnerable
Brikena Leka and Elona Pojani describe three related decisions: acquiring human capital, protecting it and maintaining it. Their survey of 300 people in Albanian cities also found an association between education and investment in further learning.
The survey does not prove that education caused the differences they observed. Still, the three-part distinction offers a practical prompt for a planning conversation:
- Develop: What does the person want or need to learn?
- Maintain: What will help their skills stay useful as work and life change?
- Protect: What could interrupt their ability to earn, care, learn or make decisions?
A planner might discuss training costs, income resilience or the effect of a career break. They might also recognise when a health, employment or education specialist is needed. Knowing where our expertise ends is itself part of good planning.
Private effort operates inside public systems
The paper by Omoju Idowu Susan examines education, health spending, income inequality and economic growth in Nigeria. Akinyemi and Abiddin review human capital development across individuals, families, organisations and societies. Choriyevich and Qizi place knowledge and skills within a wider discussion of sustainable economic development.
These papers differ in strength and scope. They should not be used to promise that a particular course will increase a client’s income, or that a planner can solve structural inequality. Their shared reminder is simpler: people develop their capabilities within systems. Access to education, healthcare, work and support is uneven.
That matters in a profession accustomed to presenting every outcome as the result of personal choices. Responsibility is real. So are the conditions under which a choice must be made.
What changes for a Total Wealth Planner?
A Total Wealth Planner should be interested in a client’s savings and investments. But the conversation should also make room for questions such as:
- What can you do now that you could not do five years ago?
- Which abilities are most important to the life you want?
- What is becoming harder to sustain?
- What opportunity are you considering, and what would it take to make it workable?
- Where would information, a practical tool or specialist help increase your ability to decide?
The point is not to assign a monetary value to a human being. Nor is it to push everyone towards greater productivity. Someone may decide that the right use of their capabilities is to work less, care for someone, recover their health or pursue something that pays nothing.
A portfolio tells us what resources a person holds. Human capital helps us understand what possibilities they can exercise. Total wealth planning has to attend to both—and leave the decision about what constitutes “enough” with the person whose life it is.
Research discussed
- Leka, B. and Pojani, E., Human Capital: Theoretical and Statistical Study Focused Mainly on Education — a survey of 300 respondents in Albanian cities.
- Akinyemi, G. M. and Abiddin, N. Z., Human Capital Developments: An Interdisciplinary Approach for Individual, Organization Advancement and Economic Improvement (2013) — a review of theory.
- Choriyevich, Y. S. and Qizi, C. M. S., The Importance of Human Capital Development in Ensuring Sustainable Economic Growth (2022) — a broad discussion of human capital and sustainability.
- Castelló-Climent, A. and Doménech, R., Human Capital Inequality, Life Expectancy and Economic Growth (2008) — a model supported by cross-country analysis.
- Susan, O. I., Human Capital Development, Income Inequality and Economic Growth (2020) — an analysis of Nigerian data from 1980–2016.
- Rizzica, L., Essays on the Economics of Human Capital Accumulation (PhD thesis, 2013) — studies of education policy and household investment in children.
