{"id":240580,"date":"2025-10-25T20:36:28","date_gmt":"2025-10-25T20:36:28","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/240580\/"},"modified":"2025-10-25T20:36:28","modified_gmt":"2025-10-25T20:36:28","slug":"accounting-for-transformative-experiences-in-financial-planning","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/240580\/","title":{"rendered":"Accounting for \u2018transformative experiences\u2019 in financial planning"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Transformative experiences are an interesting problem for financial advisors. How do you prepare a client for needs and wants they can\u2019t entirely anticipate?A-Digit\/iStockPhoto \/ Getty Images<\/p>\n

A major problem in retirement planning is the difficulty of imagining one\u2019s future self. <\/p>\n

To overcome present bias<\/a> \u2013 the tendency to prioritize spending on yourself, today \u2013 experts have recommended techniques such as writing a letter from your future self or looking at a digitally aged photograph to build a connection with an older you whose needs will one day be as important as yours right now.<\/p>\n

But what if the desires of that future person have changed so dramatically as to be unrecognizable?<\/p>\n

L.A. Paul, professor of philosophy and cognitive science at Yale University, has written about \u201ctransformative experiences,\u201d or situations that fundamentally change who we are: our preferences, values, relationships and self-perception. <\/p>\n

These experiences, such as having a child, challenge conventional decision-making because the person choosing to undergo the transformation isn\u2019t the same person as the one who experiences it. <\/p>\n

Ms. Paul\u2019s idea got my attention last year when I was thinking about having a child. But transformative experiences are an interesting problem for financial advisors. How do you prepare a client for needs and wants they can\u2019t entirely anticipate?<\/p>\n

For new parents, a lot of the box-checking is obvious: a will, life insurance, emergency funds, registered education savings plans. For me, now a couple of months into my \u201ctransformation,\u201d the change has been the level of urgency around such administrative matters. <\/p>\n

But other priorities and goals \u2013 around spending, certainly \u2013 will not survive the transformation.<\/p>\n

I also started thinking about retirement in the context of transformative experiences. You spend most of your life working, and then you stop abruptly. How can you anticipate how and where to spend this sudden abundance of free time when you\u2019re accustomed to having so little of it?<\/p>\n

Globe Advisor\u2019s ongoing Tales from the Golden Age<\/a> series is full of people who don\u2019t enjoy the golf course, the cruise lines or even the grandparenting as much as they had anticipated.<\/p>\n

That may be because retirement isn\u2019t as transformative as many believe it will be. After years of dreaming about the end of work, some people find that a large part of their identity is tied up with the job they were eager to leave.<\/p>\n

As author Morgan Housel put it in his interview with Deanne Gage<\/a> this week, retirement can lead to \u201cidentity issues.\u201d And that\u2019s likely because, far from being transformative, retirement can feel more like a continuation of normal existence \u2013 only with a void right in the middle of it.<\/p>\n

To prevent this situation, Mr. Housel recommends trying new things to help retirees understand what they might want. <\/p>\n

\u201cBackfilling your life with new hobbies is very important, and the idea of doing little experiments to figure out what those things might be is part of that,\u201d he says.<\/p>\n

I\u2019m interested in how advisors approach transformative experiences, and whether you think retirement qualifies. Let me know.<\/p>\n

– Mark Burgess, Globe Advisor assistant editor<\/p>\n

mburgess@globeandmail.com<\/a> <\/p>\n

Are you reading us on the web or did someone forward the e-mail version to you? If so, you can sign up for Advisor Weekly here<\/a>.Must reads<\/p>\n

A complex estate: The estate of a woman who outlived her beneficiary, executor and alternate executor is to be divided equally between the estates of her five sisters \u2013 four of whom also predeceased her. Rudy Mezzetta reports on the ruling and the importance of planning.<\/a><\/p>\n

Keeping the faith: While some investors expect markets to stop rising \u2013 and possibly plummet in the near term \u2013 Jay Smith, portfolio manager and investment advisor at CIBC Wood Gundy, who oversees about $6.5-billion in assets, forecasts more growth, driven by interest rate cuts, government deregulation and favourable tariff negotiations. Here\u2019s what he\u2019s buying and selling.<\/a><\/p>\n

Playing it safe: With inflation squeezing budgets, one line on the ledger that shouldn\u2019t be cut \u2013 especially for those raising families \u2013 is life insurance. Joel Schlesinger reports on cost-saving options.<\/a><\/p>\n

More from The Globe<\/p>\n

Big money: Wealthsimple Technologies Inc. has surpassed $100-billion in assets three years ahead of schedule as soaring markets entice more Canadians to pour money into online trading accounts<\/a>. And the fintech is pushing further into retirement planning with the introduction of RRSP loans.<\/a><\/p>\n

New fund: The private equity arm of Brookfield Asset Management Ltd. BAM-T<\/a> is launching its first fund in Canada geared toward wealthy investors who are eyeing private assets as they hunt for higher returns.<\/a><\/p>\n

Please hang up: Only 18 per cent of calls to the Canada Revenue Agency received a timely answer in the last fiscal year, and only 17 per cent of general inquiries about individual tax matters received accurate responses<\/a>, according to an auditor general\u2019s report.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Transformative experiences are an interesting problem for financial advisors. How do you prepare…\n","protected":false},"author":2,"featured_media":240581,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[75010,21366,64,63,99,186,61229,184,185],"class_list":{"0":"post-240580","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-advisorweeklynewsletter","9":"tag-appwebview","10":"tag-au","11":"tag-australia","12":"tag-business","13":"tag-finance","14":"tag-globe-advisor","15":"tag-personal-finance","16":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/240580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=240580"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/240580\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/240581"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=240580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=240580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=240580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}