The Time Traveller's Financial Planner: Helping Clients Understand Their Past and Future

Before I joined Dimensional nearly two decades ago, I ran a coaching business alongside my financial planning practice. One of the biggest challenges nearly all my clients experienced was how to manage their time, their energy and their attention. One day, during a time-management seminar I was leading, I wrote this sentence on a flip chart:

“The incompletes from your past and the obligations and commitments you have in your future compete for space in your present.”

It wasn’t planned. It happened in response to a question from a participant and prompted an interesting conversation which continued even after we wrapped up the session.

The sentence has stuck in my mind ever since, and I realised that it is just as applicable to the world of financial planning as it is to time management—perhaps more so.

Financial planning is, by definition, forward-looking—planners help their clients define and refine their desired futures and build plans to realise them. But when a client sits down with you for that first meeting, you’re not just dealing with a list of future goals. You are dealing with the past: a legacy of accumulated financial products, the client’s values and beliefs and their decades of lived experience that shape how they think and feel about money today.

We meet them in the present, of course. But to do our job properly, we must be able to travel with them through time to understand how their past has shaped them, how they feel about their future and how both influence what they are prepared to do about it in the present.

Our focus in financial planning is often on the numbers: the capital values of portfolios, the tax treatment of investments, the recommended asset allocations and the safe withdrawal rates. But underneath the technical details, there is something more fundamental. Time, not money, is the real raw material of financial planning.

Yet time is rarely treated with the respect it deserves.

Take compounding—often described as the eighth wonder of the world. Einstein may or may not have said it, but either way, it is the most powerful force in investing. It works its magic if you remain constant and consistent over time. But human beings, whether driven by fear or greed, are notoriously intermittent when it comes to their investments. This is why so many financial plans fail—because investors don’t stay in their seats.

There’s ample evidence to demonstrate that missing just a few of the best days in the stock market can cause serious damage to long-term investment returns. But most investors are not the homo economicus we might wish them to be. Instead, they are a hostage to their emotions and behavioural biases. It’s a battleground between the maths of compound interest and the weakness of human nature.

Economic eras leave their mark on people. The “Depression Babies” study by Malmendier and Nagel (2009) showed that people who come of age during periods of low market returns—like the Great Depression—carry a lifelong aversion to risk. Even decades later, their early experiences continue to shape their investment behaviour, despite their income or education. Similarly, those who experienced an economic boom in their formative years tend to carry an abundance mindset into their futures and are willing to absorb more investment risk.

Each client is a product of their financial origin story. To understand some of the factors that shape the choices they are making, you need to be aware of their personal temporal framework. Do they dwell on the past, or are they obsessed with what’s next? Do they look ahead with hope, or fear? Do they live in regret, or with purpose?

Here’s a simple framework to locate a client’s time orientation:

Understanding where a client is on this map will help you meet them where they are and, perhaps, allow you to gently nudge them towards a more productive perspective. For example, a client with a scarcity mindset rooted in past regret may hoard cash or resist all risk, but they can be educated to understand the relationship between risk and return in a more positive way.

If you’ve ever come across old photographs of yourself, you know it’s common to feel somewhat disconnected from the person in those pictures. So much of the connection to who you were seems to have been lost. Surprisingly, our relationship to our future selves can be equally distant.

Psychologist Hal Hershfield argues that most of us think of our future selves like strangers. We know intellectually that we will grow old, retire and need money. But emotionally, we feel disconnected. That’s one of the reasons, he says, why people fail to save. It’s not ignorance of the consequences, it’s our dissociation from the person who will have to deal with those consequences—future you!

The good news, however, is that when people are helped to imagine their future selves—vividly and emotionally—they become far more likely to act today. They save and invest more. They protect more. And when financial planning is done well, it can help to strengthen that connection.

One of the most elegant frameworks I have encountered for understanding the perspective of time in financial planning comes from George Kinder, whose three life planning questions help people focus on what really matters to them. The three questions, which ask the client to imagine three different lifetime horizons (unlimited, restricted and imminent death), are not financial per se. They are emotional and existential questions, but the answers to them form the foundations of profoundly transformative financial plans. For me, Kinder’s five-day “Life Planning” workshop remains one of the most valuable and impactful experiences of my career.

We are all time travellers whether we realise it or not. Some of us will be fortunate enough to work with a financial planner who understands that their real work is not just about optimising financial plans and arranging investments—it is helping their clients create the bridge between who they were, who they are and who they want to be.

These planners help clients deal with the legacy of past decisions, confront their regrets and take responsibility for the decisions they have to make in the present. Most importantly, they help their clients visualise, and emotionally connect with, the person they are time travelling into the future to become.