conversation about increasing savings
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This article appears in the November 2022 issue of Advisor’s Edge magazine — our second last print issue. If you’re a print-only subscriber, learn more about our digital transition and how to continue to receive all the best news and features on

Failure to save enough for retirement can be blamed on several factors. Maybe markets tanked just as a client stopped working. Maybe the client was too risk averse.

Behavioural finance offers a simpler reason: a failure of imagination.

Toronto-based consulting firm BEworks addressed this challenge when it developed a retirement savings app for a multinational financial services company (BEworks presented its work as a case study without naming the client.)

Studies have attributed the retirement savings gap to clients’ inability to imagine their future selves. Clients tend to prioritize present needs over future ones, and they struggle to identify with the person they’ll be decades from now.

As Hal Hershfield, a marketing professor at UCLA, wrote in a 2011 paper, “saving is like a choice between spending money today or giving it to a stranger years from now.”

With this in mind, BEworks sought to enable a kind of “mental time travel” that would encourage clients to empathize with their retired selves.

“Our future self really is a stranger to us,” said David Lewis, president of the BEworks Research Institute. “If you can make that future self more real by filling in the details on who that person is, what they do and what they like, it makes that person psychologically closer, so we’re more willing to defer current gratification in favour of future gratification.”

One way to do that, as Hershfield found, is to digitally alter a client’s photo so they look older. Another is through storytelling. As part of onboarding, clients are asked in the app to write down 10 things they want to do when they retire. The more detail, the more effective the exercise becomes, Lewis said. And writing those details down is important to really get the client thinking.

BEworks ran an experiment with a control group asked to set up automatic savings. Those who answered the “mental time travel” questions during onboarding were willing to save an average of $60 more per week, or roughly $3,000 more per year.

Advisors have regulatory boxes to check as part of onboarding regarding a client’s risk profile. But that profile, focused on risk tolerance and capacity, isn’t framed for the way people think, Lewis said. We think in terms of positive and negative outcomes, and getting clients to imagine specific goals — and what it would feel like to not achieve those goals — can be motivating.

“If you get clients thinking about failure to achieve their desired outcome, that will motivate them more powerfully than if you talk about risk and return,” Lewis said.

“I know this sounds negative, but you kind of have to do it.”