Time, relationships and control – the unexpected investment triage | By Rob Macdonald, Head of Strategic Advisory Services, Fundhouse

What if I said to you that there are three things more important than financial assets for you to help your clients invest in to achieve financial health?

Financial planning control

I am sure you’re already thinking that would be crazy. Now we might debate what defines financial health but suffice to say that money is not the only indicator thereof. After all, I’m sure you have wealthy clients who are miserable, and less well-off clients who are happy. In an article in the previous edition of Blue Chip, I referred to Morningstar research which highlighted that financial health has at least two dimensions, psychological wellbeing and economic stability, neither of which is guaranteed by money¹. This explains why helping your clients invest in time, relationships and control may impact their financial health more than how much money they invest.

The further into the future a person can envision their lives, the greater their economic stability.


We often think of time as something we spend. “I spent my time doing…” is commonly how we describe our relationship with time. But according to research by Prof Hal Hershfield and Prof Cassie Holmes of UCLA’s Anderson School of Management, if we say rather, “I invested my time doing…”, we have the potential to shift our thinking about time from an expenditure to an investment and will give ourselves more chance of allocating time towards the things that are more closely linked to our longer-term wellbeing².

The research suggests that those who think about time over longer time horizons tend to be happier and more satisfied with life. This assertion has strong parallels with the Morningstar research which found that the further into the future a person can envision their lives, the greater their economic stability.

To test this, people were asked the question: “When it comes to your money, how far ahead do you tend to think and plan?” The range of options that respondents to this question could choose included days, weeks, months, years, decades and generations. The research found that the relationship between mental time horizon and savings behaviour was significant, irrespective of factors such as age, income and education level. The longer one can think into the future, the better one’s savings behaviour and ultimately the greater one’s net wealth. It seems then that thinking longer into the future is not just good for your personal happiness, but for your economic stability too.


A long-running Harvard University study³ which began in 1938 explores the question: What makes us happy in life? In the ongoing study people from all over the world are asked detailed questions about their lives at two-year intervals. As participants enter mid- and late life they are often asked about their biggest challenges in retirement. We may anticipate that their biggest concerns have to do with having enough money, being able to afford healthcare or having access to care in their later years. Yet based on their responses, the number one challenge people faced in retirement was not being able to replace the social connections that had sustained them for so long when they worked. As the leaders of this research suggest, “to retire happy, invest in your relationships now”.


According to the Morningstar research, a key indicator of psychological wellbeing is the extent to which someone feels in control of their finances. Do they feel confident about their money? To test this people were asked to what extent they agree or disagree with the statement: “I can handle whatever comes my way, financially.” This statement says nothing about how much money a person has, but rather tries to assess how resilient a person feels about their finances, and how well they think they can handle catastrophe or unexpected success, like winning the lottery. It says more about their relationship with money, than the money itself. We can interpret this as saying a healthy relationship with your money is one where your money is serving you, rather than the other way around.

The interesting aspect of control is that it is about perception of control. It is not saying that a person shouldn’t be working with a financial planner to help them manage their financial life. Rather, the research suggests that if a financial planner can encourage their client to feel as if they are in control, they will achieve greater financial health. This means helping clients take ownership for their financial decisions (rather than blaming you!) and it explains why a coaching approach to financial planning is so important.

Coaching at its essence is about helping someone find their own answers to their own questions. This will determine the extent to which a client takes ownership of their financial plan rather than just “renting” the plan from you because you put it together.

Rob Macdonald, Head of Strategic Advisory Services, Fundhouse

So what?

If clients can achieve financial health by making these three investments, what does it mean for financial planners? Firstly, helping clients to be clearer about their future and getting them to think in decades rather than years is likely to impact their economic stability more than a great investment strategy. Secondly, encouraging clients to reflect on their social connections and relationships will raise their awareness of the importance of being proactive in this aspect of their life. Thirdly, helping clients recognise where and how they have control over their finances will give them a sense of empowerment and confidence in their financial life.

How then can you practically help clients to begin making these three investments? A starting point for clients may be a self-audit of each aspect of their life:

  • Time. You could get clients to reflect on questions like: Where do you currently spend your time? How would you like to spend it? What would you like to be doing in 10, 20, 30 years?
  • Relationships. You could encourage clients to consider questions like: What relationships or connections are you missing that you want more of? How can you make those happen?
  • Control. You could ask clients: When have you felt in control of your money? How did that feel? What support could you get, emotional or financial, if things went wrong with your money?

Clients are unlikely to have immediate clarity about how to invest in their time, their relationships, or their control of money. But if you could help them achieve that clarity through engaging and meaningful conversations, what greater value could you bring to a client than enhanced personal happiness and improved financial health? 

¹Sarah Newcomb, “When More is Less: Rethinking Financial Health”, Morningstar Behavioural Science Research, 2016

²Hal E. Hershfield, Cassie Mogilner (Holmes) and Uri Barnea, “People Who Choose Time Over Money Are Happier,” Social Psychological and Personality Science 7, no. 7 (2016): 697-706.

³The Harvard Study of Adult Development, Director: Dr Robert Waldinger