The power of the right question: Financial goals and choice guidance

“There is a risk that consumers may unconsciously adopt financial goals”

What is the focus of the paper?

This paper describes an exploratory study, using qualitative in-depth interviews and quantitative survey research, addressing the following questions: (1) do people have financial goals? and (2) does the way financial goals are elicited (or discussed) influence the number of goals people mention (and their willingness to work towards them)?

What are the key findings?

The study shows that while consumers do have financial goals, the way these goals are elicited has a significant impact on their responses. This is because consumers use different definitions for financial goals, and not all goals are equally prominent in their minds (‘top of mind’). Consumers tend to mention more goals as a conversation progresses and when they are provided with examples. The fewer examples given, the fewer goals they report, while longer lists of goals can activate goals they were not actively thinking about. In open-ended response categories, it appears that consumers mainly mention the goals they consider most important. Interestingly, ‘planners’ are less influenced by the wording of the questions than ‘non-planners.’

What are the implications?

• The way financial goals are elicited significantly influences the goals consumers report. This can lead to unintended guidance.
• There is a risk that consumers may unknowingly adopt financial goals they do not actually have, which can result in poor financial choices.
• Designers of financial advice and decision support tools should be aware of the influence of question phrasing, such as the length of lists and the order in which information and decisions are presented.