Explore the WHY before the HOW and the WHAT


Amyr Rocha Lima, CFP®

10/9/20194 min read

People seeking financial planning advice may already have a loose reason as to why they want to invest – some pre-set idea or financial goal in mind. For example, they may want to save up for a house deposit, start an investment ISA, or consolidate old personal pension plans.

In other cases, people desire a specific investment idea. They might want to know which fund is best to invest in given the current climate, or how much of their portfolio they should be allocating to emerging markets versus the UK. They want to know HOW they can invest and WHAT products they should invest in.

As a financial planner, it is best to put more emphasis on the WHY as the first step in the financial planning process. Knowing WHY a person wants to invest is essential before exploring the HOW (account type) and the WHAT (the right investments).

The importance of WHY

Understanding the why has helped some of the most pioneering names in the business world – think Richard Branson and Steve Jobs – succeed. Simon Sinek explains more in his popular TED Talk, Start with Why. According to Sinek, in business it does not matter WHAT you do – it matters WHY you do it.

In financial planning, the why is the underlying reason or need of the person that wants to invest. Here are a few case examples:


A young couple wants to save enough money in two to three years to build a deposit for their first home. It does not make sense to invest in stocks, as the volatility of the stock market could result in a drop by the time they want to make an offer on a house.

A better course of action would be to put the money into a savings account for a more reliable, albeit lower, return. Let us imagine the same young couple now want to invest for their long-term retirement. The plan would change – a portfolio with stocks makes more sense here, even with the added volatility, as the longer time period increases the chances of a significant return over and above inflation.

In this example, understanding the WHY (the timeframe), allows the couple to guide their WHAT and their HOW.


A couple wants to save for their children’s future, but university is not certain, so they want to invest with flexibility in mind. This would give their child options in using the money – for example, for a house deposit, a wedding, or a business venture.

Understanding the WHY (the desire for flexibility) allows the couple to guide their HOW and WHAT.


A 19-year-old is entering the workforce, debt-free, after completing an apprenticeship. She does not have an early retirement goal, but saving 10% of her income in a pension plan would put her on a successful pathway towards retirement planning.

This young person has many years to achieve her retirement goals, so only small steps are required today, freeing up short-term cash for her to save or invest towards other financial goals.

On the other hand, a couple in their 50s with little retirement savings, but who want to retire in the next decade, would need to make up for lost time, because they cannot count on as much of the benefits of compounding growth. A much higher percentage of their surplus income needs to be invested.

In both these cases, knowing the WHY (the age implications) helps to guide the how and the what. The WHY can – and often will – change. Planners must ensure that the resulting HOW and WHAT are dynamic enough to evolve as the WHY changes.

However, let the buyer beware: there is also the risk of getting stuck on the WHY for so long that the how and what never actually happen. That is even worse than not planning out the WHY in the first place. It is much better to use a WHY plan to guide and adapt the ‘how’ and the WHAT – even if it is not perfect.

Financial Advice vs Financial Planning

Traditional financial advice focuses on the WHAT, before the HOW, with the WHY finishing last. This approach can lead to an undesirable outcome for clients.

For example, let us consider a client who wants advice on the best Stocks & Shares ISA. If a financial adviser bases his or her recommendations on purely the best platform and funds currently available, without nailing down the WHY, the ISA value at the end of the investment period may not meet the client’s expectations. The client may not have invested for long enough or may not have had enough exposure to high- or low-risk assets.

Real financial planning explores the WHY, before the HOW and then the WHAT. This process is much more effective for addressing the client’s underlying needs and expectations.

Amyr Rocha Lima, CFP® is a financial planner who specialises in working with successful professionals age 50+ to help them reduce taxes, invest smarter and retire on their terms.

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(Senior Risk and Compliance Officer - Metlife)


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Amyr Rocha-Lima MSc FPFS CFP Chartered Financial Planner Kingston upon Thames
Amyr Rocha-Lima MSc FPFS CFP Chartered Financial Planner Kingston upon Thames