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Abstract
Although considerable evidence suggests that setting goals increases the odds of behavior changes that lead to goal attainment, less research has been conducted examining what underlying traits allow some to successfully attain their goals when others do not. This study, using the Theory of Planned Behavior, examines the affects of individual control beliefs on financial goal progress. Findings suggest that low control beliefs are significantly associated with less financial-goal progress; however, the receipt of expert financial advice can reduce this negative effect and result in higher levels of goal progress than that of individuals with high control beliefs. © 2014 Academy of Financial Services. All rights reserved.
Keywords: Behavioral control; Self-efficacy; Goal progress; Financial advice
JEL classification: D14
1. Introduction
The establishment and pursuit of financial goals figures prominently in the financial planning process, and financial service professionals routinely emphasize the importance of developing clear specific, measureable, achievable, realistic, and timed (SMART) autono- mous (reflecting personal interest and values) financial goals (Koestner, Otis, Powers, Pelletier, and Gagnon, 2008; Latham and Locke, 1991; Schunk, 1991). Goals serve as motivational units for behavior modification by: directing attention and/or effort toward goal-relevant activities and away from goal irrelevant-activities; serving an energizing function, whereby high priority goals lead to greater effort than low priority goals; increasing persistence; and leading to the arousal, discovery, and/or use of task-related knowledge and strategies (Latham and Locke, 1991; Phillips and Gully, 1997). Goals also increase the ability to concentrate when necessary, delay gratification, and follow instructions (Sheldon and Kasser, 1998). As such, the setting and evaluating of goals for financial success is a grounding pillar of the financial planning process as outlined by the Certified Financial Planner Board of Standards, CFP Board of Standards.1
The setting of goals plays a critical role in aligning people's behaviors with the actions necessary for goal attainment (Bagozzi and Dholakia, 1999; Koestner, Lekes, Powers, and Chicoine, 2002; Neukam and Hershey, 2003). Stawski, Hershey, and Jacobs-Lawson (2007) find that goal clarity motivates individuals to plan for retirement. Cai and Yang (2012) find goal clarity influences risk tolerance and ultimately risk-taking strategies in goal attainment. Although researchers agree that certain types of goals are more likely to be initiated by individuals and that certain goal types...