The Importance of Understanding Client Values Before Creating a Financial Plan

Financial planning is often framed as a technical discipline, and many of the certifications and designations (rightfully) focus on this because it is a foundational element of what we do. It is important to understand Monte Carlo analyses, projections, optimization, tax efficiency, and investment selection. However, accuracy alone does not drive successful outcomes.

Research across behavioral finance, psychology, and client experience consistently points to a different reason why a client does or does not make financial decisions or take specific financial actions. Research also tells us that clients want to feel understood, connected to the recommendations, and aligned with their plan. (We’ll dive into the research later in this blog!)

Whether you’re just getting started or growing your book of business, you might find yourself wondering what to do if a client just won’t take your advice. Clients rarely abandon a plan or ignore advice because they “don’t think it’s right,” at least not technically. They disengage when they don’t understand the recommendations, when the advice conflicts with what they care about, or when the plan feels generic rather than personal.

This is why values discovery is no longer a “nice-to-have” or a feel-good exercise. It is foundational to building trust, encouraging follow-through, and creating plans that positively impact your clients’ lives. Understanding client values before building recommendations leads to better decisions, stronger relationships, and more sustainable outcomes for both clients and advisors.

Research Agrees: Money Decisions Are Value-Driven, Not Rational

People who are “financially inclined,” like financial planners, accountants, etc. might assume that other people view money as they do. Everyone makes rational decisions that maximize their income and investments, right? Well, behavioral research disagrees with you a bit.

Prospect theory, developed by Daniel Kahneman and Amos Tversky, demonstrates that people are more sensitive to losses than gains. This means that most people prefer certainty over optimization and make decisions heavily influenced by emotion, identity, and framing.

This directly undermines the idea that better math (or tools or presentations or…) alone leads to better decisions. Even the most technically optimal plan can fail if it doesn’t align with how a client actually thinks and feels about money.

CFP Board reinforces this reality in its Psychology of Financial Planning framework, stating:
“Creating and achieving financial plans involves identifying a client’s personal goals, and those goals are influenced by a client’s mindset and emotional behaviors.” Clients’ financial behaviors are shaped by beliefs, past experiences, emotions, and values. Ignoring these factors increases the likelihood that even a technically sound plan will be resisted or abandoned.

Morningstar’s research on goals-based and values-based planning further supports this. Their findings show that when plans reflect personal meaning, rather than purely optimal outcomes, clients are more likely to stay engaged, follow recommendations, and feel satisfied with the planning relationship.

Values Clarify the Real Work of Financial Planning

Decision science shows that people struggle most when forced to choose between competing priorities. Clients come to financial planners often because they are overwhelmed at the thought of putting money behind everything at once: retirement, college funding, debt repayment, lifestyle spending, and long-term security.

Other clients come to planners because they know they “need to/should” save for retirement, focus on debt repayment, or build an emergency fund. But for some reason, those things never get done. Situations have come up, curveballs have been thrown, and they need help getting back to what they “should” be doing.

A planner’s role is not to optimize every element of a person’s finances simultaneously. It is to help clients prioritize their next steps in a way that reflects what matters most and builds momentum. Planners can also help clients understand why certain goals or financial projects feel so overwhelming — or why they don’t feel fulfilled when they hit certain milestones.

Values also provide the decision-making framework when tradeoffs are unavoidable. Clients might wonder if they should pay down their house or save for retirement; if they should put more to their kids’ college or if they want to finally save for that big vacation. Understanding their values will guide your recommendations.

Two clients with identical balance sheets should not receive identical plans, and understanding what’s important to your client will make sure you can really tailor their plan to them.

Why Values Discovery Must Happen Early

A common industry mistake is treating values exercises as a validation step after recommendations are drafted, or as a “nice to have but not necessary” step in client discovery. We’d argue that values discovery during onboarding — before cash flow decisions and before investment risk discussions — is the cornerstone of great financial planning.

Introducing values early reduces friction later, prevents rework, and shapes how risk, tradeoffs, and priorities are framed. It also sets the tone for the relationship: collaborative, not transactional.

Here’s a great example of why we recommend starting every new client relationship with a deep-dive “get to know you” session that includes a values discussion:

In our recent onboarding meeting with clients Keith and Beth, we handled all the “technical bits,” including document gathering and discussing the financial planning agreement. But beyond that, we also explored their backgrounds and upbringings, career paths, family dynamics, early financial experiences, and upcoming transitions.

In their second meeting, values were discussed before diving into cash flow.

What emerged was clarity. Keith valued growth, flexibility, experiences, and enjoyment alongside stability. Beth valued home, family, predictability, and security. These complementary values explained where spending felt energizing, where guardrails were needed, and how each partner evaluated risk. We also found out, during this process, that neither Keith nor Beth really felt they needed to retire at the “normal” age.

Without this step, recommendations could have unintentionally favored a “traditional financial plan” that had them retiring at 65, and that had them putting a lot more toward their retirement accounts. One thing that kept coming up for them was helping their last child through college and starting to travel together more as they became empty nesters.

Want to see Keith & Beth’s meetings, along with other client onboarding and values discussions? Join CORE today at amplifiedplanning.com/subscribe.

How to Ask About Client Values (Without It Feeling Awkward)

Understanding that values matter is one thing. Helping clients articulate them is another. Many planners worry that values conversations will feel too abstract or personal, especially early in a relationship. In reality, most clients are relieved when someone finally asks questions that go beyond balances and rates of return.

The key is structure.

Values often emerge through grounded questions about background and experience. Asking about upbringing, early money memories, career paths, and past financial stressors creates a natural bridge into values without labeling it as such.

Questions like:

“What did money feel like growing up in your household?”
“What financial decisions have been the most stressful for you in the past?”
“What are you most proud of financially?”
“What do you hope money allows your life to look like five or ten years from now?”

Values also surface when clients discuss priorities:

“What feels like the most immediate concern or goal for your money right now?”
“When you think about the next few years, what would you most like to see happen?”
“What would make you feel more at ease about your financial situation?”
“What does financial success look like in your day-to-day life?”

As clients talk, listen for themes rather than perfect answers. Words like secure, free, prepared, comfortable, flexible, enjoyment, or protected point directly to underlying values.

Values exercises don’t need to be complex. Many planners use card sorts, ranking exercises, or short reflection worksheets. Inside CORE, we share a values exercise used before cash flow and investment decisions, but what matters most isn’t the tool. It’s that you use one intentionally and early.

Clients may contradict themselves or evolve as they talk. Your role isn’t to force clarity in one meeting, but to reflect patterns back to them. Saying, “What I’m hearing is that you want to enjoy life now without sacrificing long-term security. Does that sound right?” helps clients feel understood, builds trust, and gives you permission to build recommendations around that tension.

Additional resources: Finding the Balance Between People Skills & Planning Skills

Plans Work When They Reflect What Matters

Financial planning isn’t just about planning precisely for the future. It’s about helping clients live well within it. Research is clear: when values guide the planning process, outcomes improve for both clients and firms.

Plus, client experience research also consistently shows that empathy and listening drive loyalty. When clients feel understood, they are more likely to follow through on recommendations, raise concerns earlier, and stay engaged during periods of market volatility. It also might lead them to become loyal clients, transferring more assets under your management, and/or increasing recommendations.

All of this to say… Values-first planning isn’t slower or softer. It’s strategic, efficient, and essential.

For planners looking to build confidence in these conversations, seeing how values discussions unfold in real client meetings is often the fastest way to develop skill and clarity. Join CORE to learn these skills and see how experienced planners navigate values-based conversations in practice.