When working with clients to build a portfolio and set a final savings goal before retiring, more financial advisers are concentrating on clients’ goals and asking them not to focus on performance, BusinessWeek reports.

Goal-based investing, otherwise known as liability-driven investing, is something institutional investors do. In the case of individuals’ retirement, the biggest liability is outliving assets, so this approach asks them to keep a greater portion of their assets in higher-return, i.e. risky, asset classes.

The adviser might tell his client to invest the portion of money that they need for essentials in low-risk instruments, perhaps even money market funds or short-term bonds, and invest the rest in more aggressive instruments. The investing “buckets” beyond the essentials might be a desired lifestyle and leaving an inheritance to others.

This comes at an interesting time, since it was this very approach being touted by target-date funds that led even those in the closest retirement date range to lose considerable assets. Regulators criticized the funds for taking such risks with near-retirees’ money, many of whom are now unable to retire. But, evidently, some advisers are still asking their clients to take that leap of faith.

Advisers who prefer this approach says it gives them an opportunity to talk to their clients about actionable approaches. As Thomas P. Holland, a partner at Global Vision Advisors, put it, “When you communicate with clients [with specific goals in mind], they’re more concerned about being on pace. The conversation is more around what needs to be done to create additional savings and rethinking asset [allocation].”

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