Because I’m a huge fan of Daniel Pink’s A Whole New Mind, I was very excited to learn that he has written a new book (released December 29th) on the topic of motivation. And, as luck would have it, Seattle happened to be one of his first stops on his book tour. Therefore, on the evening of January 11th, I hopped a ferry for a 35 minute ride to the big city to hear Pink speak and to secure a signed copy of Drive: The Surprising Truth about What Motivates Us. My expectations were high, and I was not disappointed. I started reading Drive that very night on my ferry ride back home, and immediately saw implications for the practice and future of financial planning.
In Drive, Pink presents (in a very engaging and understandable way) the latest research in human motivation—all of which demonstrates that what science knows and business does are at polar opposites. I found one section, “The Good Life,” to be particularly relevant to financial planners and the way they conduct goal setting processes with their clients. Pink makes the point, and research confirms, that “satisfaction depends not merely on having goals, but on having the right goals.”
One of the studies he cited asked a sample of soon-to-graduate college students about their life goals and followed them early in their careers to assess their progress and well-being. The students’ goals were categorized as either “extrinsic aspirations” or “intrinsic aspirations.” Becoming wealthy or achieving fame are examples of extrinsic motivators and were labeled “profit goals.” In contrast, learning, growing, and helping others are examples of intrinsic motivators and were labeled “purpose goals.”
Within two years of graduating, the researchers found that the individuals with purpose goals felt they were achieving them, and also experiencing higher levels of satisfaction and well-being than when they were in college. In addition, they reported low levels of anxiety and depression. In contrast, those who had profit goals (wealth and acclaim), and were achieving those goals, reported the same levels of satisfaction, self-esteem, and positive effect as when they were students. In other words, they were achieving their goals, but that didn’t make them happier. And, even more striking, those achieving their profit goals demonstrated higher levels of anxiety and depression.
Pink summarized the conclusions of the researchers this way: “Even when we do get what we want, it’s not always what we need.” What this study and many others revealed is that what we really need is a sense of purpose. The lesson for financial planners is that, to be truly effective, they must discover and nurture their clients’ intrinsic aspirations and then demonstrate how the financial plan and advice they deliver will align with and support their client’s most cherished life goals. I believe this is the highest value—and greatest gift—that financial planners can provide to those they serve.