Are we financial planners, life planners or investment managers?

I applaud the emergence of "life planning." It is very important for us as a profession to not only focus on the quantifiable data we collect but also on a client's values, for themselves and for their heirs.

However, I believe that "life planning" is the old original (classic) "financial planning" that too many planners got away from when they were seduced by the allure of investment management.

Too many stockbrokers and insurance agents embrace "planning" (by any name) only when people are buying fewer or less costly products. Financial planning is, was and hopefully will continue to be about educating the planner about the client's goals, needs, wants, values and priorities.

As an aside, I feel very strongly that "educating the client" is NOT the right process for most clients. I caution planners to avoid the temptation of telling everyone you meet everything you know. The old adage says, "When someone asks, 'What time is it?' don't teach them how to make a clock." Clients want to know that:

You are educated (and if a CFP practitioner you have four Es-education, experience, ethics, have satisfied the requirements of the CFP exam).

You possess the skills needed to help them.

You are willing to take the time to be an effective listener-to ask probing questions, not only "How much?" but "Why is this important?" and "How would you feel if ..."

Today, most of our estate planning cases have as their primary focus protecting family wealth for multiple future generations, not minimize estate taxes. Creating trusts with incentives is a good way to do that. Also, consider loaning funds instead of making distributions under some circumstances. For example:

1. Would you pay for your child's third freshman year in college? What does your trust say? Is the trustee required to pay for education expenses along with health maintenance and support?

What if, instead, college costs were loaned to your child by your Family Bank© only if their grades stayed above some level? Discre-tionary distributions to your child could then be tied to their paying back the loan.

2. What happens to your daughter's first home if her trust distribution paid for it and then she gets divorced?

What if, instead, the funds for her first home were loaned to her, interest only. Upon divorce, the Family Bank© could foreclose and it would own her house for her benefit.

These ideas were generated by us in response to our client's desire to (as Warren Buffett put it) leave their children enough that they can do anything, but not so much that they can do nothing. In addition, our clients want to protect assets from divorce (when in-laws become outlaws)-theirs and their children's.

Financial planning should not be limited to betas, standard deviations and Monte Carlo probabilities. There is a role for quantitative analysis in our process, but not at the exclusion of qualitative development of relationships with our clients. Financial planning is life planning.

Herbert K. Daroff, J.D., CFP, is a business and estate planning advisor with Baystate Financial Planning in Boston.