New opinions are always suspected, and usually opposed, without any other reason but because they are not already common.”
—John Locke

Evolution (noun)
1. Any process of formation or growth; development;

2. A product of such development; something evolved;

3. A process of gradual, peaceful, progressive change or development, as in social or economic structure or institutions.

Evolve (verb)
1 To develop gradually;

2 To come forth gradually into being; develop; undergo evolution.
(Dictionary.com)

“Financial planning” has evolved considerably since Loren Dunton and his 12 cohorts gathered in that Chicago hotel way back in 1969 and founded the movement we are now calling “financial planning.” These men had strong visions of the future, including the establishment of an academic institution and the evolution of a new, credentialed profession based on combining established categories of personal financial products. Initially, they called it “financial counseling,” a term rejected by the SEC. Then they turned to “financial planning.” It stuck.

These men were brilliant and courageous visionaries, but I doubt even they could have possibly foreseen what would emerge from that meeting in terms of impact and implication. From that humble beginning, they founded the College for Financial Planning, establishing what seemed to be a solid curriculum. Indeed, it was a major achievement for the times, but in retrospect we can see that it was grounded exclusively in the dominant categories of personal financial products circa 1969.

The college offered courses in insurance, investments, taxes, retirement planning, employee benefits and estate planning, and its ostensible purpose was in qualifying an individual as a “certified financial planner” or “CFP.” Not coincidentally, these categories each represented financial products. Initially, there wasn’t much to define “financial planning” as such, including its mission and purpose. Was it a product delivery system or a fiduciary profession? Reasonable people thought differently, and we have been fighting about it ever since.

Here is the thing: Time does not stand still. Evolution is about survival through time. As we live life through time, these questions of survival and possibilities are in front of us. Evolution happens. The next logical questions then become, “What might be?” and “What should be?”

These questions are not intended to make any of us feel comfortable. Yet it is in the nature of a learned profession that we must ask them now and then ask them again. Otherwise we just stay fixed in place like insects in amber. The things that seem to be missing from our thoughtful considerations are expansive views of “financial planning’s” potentialities. Continuing essentially exclusive attachments to product-based 1969 categories is likely to stick us with partial approaches toward “financial planning’s” ongoing evolution and its mission and purpose. It seems a shame that these embryonic issues should continue to dominate relevant conversations about the collective futures of fiduciary advisors.

For now, I suggest that “financial planning” is at one of those inflection points where we risk losing critical elements of our profession’s potential forever. Specifically, “financial planning” is being stifled within the constraints necessarily imposed by the limitations of those financial products categories. We need to give careful collective thought to all that could be if we are to put “financial planning” in a position to best serve expansive, future-think views of its mission and purpose.

Let’s address some basic assumptions. First, I am putting “financial planning” in quotation marks because of the term’s imprecision. It means so many different things to so many different people that it just communicates badly. Google it and you will be on a wild trip through financial product providers and decades-old assumptions. Even Wikipedia punts on specific definitions.

Next, we have to deal with reality. Industry has been moving aggressively to claim the term. Worse, via multi-million-dollar ad campaigns, Industry continually suggests that its individual companies are “go to” destinations for “financial planning.” This means “financial planning” is increasingly promoted in manners that confuse, even mislead. Specifically, going full circle, “financial planning” is increasingly conflated with product sales, especially insurance and investments. Unfortunately, this means “financial planning” increasingly ignores the infinite combinations of issues that do not necessarily engage financial products or move directly toward a financial product sale.

Clearly, financial products are vital to any successful “financial plan.” No quarrel. Unfortunately, financial product conversations suck all the oxygen out of the room. This means those sales-side conversations run roughshod over all the other aspects of our profession. It’s the “golden rule”: Financial products are perceived to have generated the gold, therefore they control the rules.

The term “financial planning” is fatally imprecise for purposes of describing the profession that works with people, their money and their choices. It implies a predictability that does not and cannot exist within the variables and uncertainties characterizing our respective relationships with money. The term can accurately describe decision-making processes for the short term, such as the purchase of financial products. However, it is woefully inadequate when it comes to longer terms—like lifetimes.

With money and money-based issues continuing to dominate First World cultures, “financial planning” needs considerable expansion to include things currently outside of the limitations of testable 1969 subject matters and predictable, product-based personal financial issues.

Finally, it misses the intrinsic importance of emotions and psychology in our personal relationships with money. As Rick Kahler recently observed in his August 17, 2015, blog, “Quality financial advice requires understanding of an individual’s relationship with money. Helping people work their way out of poverty isn’t just about money. It requires addressing the beliefs and culture around money that may be keeping people stuck both financially and emotionally.”

“Ironically,” he added, “the need to look beyond the money in order to build financial health is one important thing the poor and the wealthy have in common.”
Yet CFP training does nothing to help us address individual relationships with money.

Personally, I believe that the mission and purpose of the “financial planning” profession is to work with individuals and families and their relationships with money and the fearsome forces that it generates. I am also convinced that modern “First World” societies are so completely built upon financial foundations of money that money interlaces intimately with virtually every aspect of modern life. Accordingly, simply functioning in this world requires an understanding of money that is profound, far-reaching and lifelong. This means that we need to be developing a profession that addresses money and our relationships with it at all levels and densities.

In other words, the work of “financial planners” is fundamentally thoughtful, reflective and intense. In other words, it is absurd to reduce the mission and purpose of “financial planning” merely to sales and the distribution of financial products.

The ideal would be to segregate the financial services industries altogether from the provision of personal financial advice, effectively separating the manufacturing, sales and advisory functions, something the late CFP Harold Gourges suggested so many years ago. Unfortunately, that train seems to have left the station.

In any event, I suspect Industry’s stranglehold on the term “financial planning” is nearly complete. Accordingly, it is infeasible to consider any strategy that requires wresting the term from Industry. Yet we cannot limit fiduciary advice simply to the business of selecting manufactured products from rather limited menus. Instead, it is time to recognize the implicit promises we make, to grasp the full range of society’s needs for the work that we do and to seek paths that would allow independent fiduciary professionals to stand on their own and push beyond Industry’s domination. It is time for us to understand money and its various roles with respect to individuals and families within the fabric of modern society.

We know what some of this looks like. It probably means the emergence of a new vocabulary, including new words to describe us. We must also look at money in more than its simplest dimensions—as a simple medium of exchange, as a tool of accounting or as a storehouse of value. We must also see that money serves as the lifeblood of the body social, for living life at various levels, serving power, family, ambition, creativity, mutuality and generosity. It is the essence of “class” distinctions and articulates the relationships among cohorts.

We know that money can address some of the major social issues facing the world and contribute immensely to peace, love and harmony. Who knows what might be unearthed if we actually explored these relationships with the same energy we’ve brought to bear on investment techniques?

Our skill sets would also need to change to reflect these expanded notions. And there are allied professions who could greatly help. Take, for example, the Purposeful Planning Institute, which addresses estate planning and welcomes practitioners from some 17 different primary occupations, including lawyers, mental health professionals, social workers and historians. PPI recognizes that some issues pull folks in from wide-ranging fields, and some of that viewpoint should translate easily into “financial planning.” Our existing categories are arbitrary and limited, but they don’t have to be.

I suggest that even calling this work “financial planning” has actually limited its evolution. In an incredibly wide range of subject matter issues, we have ignored important things about personal financial relationships. Some time ago, I suggested that “financial planning” was the ultimate liberal arts profession. I have also suggested that advisors could engage with clients everywhere and anywhere financial issues emerge. Accordingly, an evolving profession should have access to knowledge and wisdom grounded in the liberal arts. This would take what we are now calling “financial planning” way past the limitations of financial products to the stature of a legitimate and learned profession.

Since we have built modern society on the back of money, it behooves fiduciary advisors to see beyond the limitations of money’s traditional functions. Similarly, it behooves academia to explore money’s implications (say, the possible use of complementary currencies for addressing social issues).

“Financial planning” is amazing. It has the appropriate elements for becoming an authentic, learned profession. As remarkable as its first 45 years have been, the next 45 should be yielding even more exciting progress as it escapes the gravity of its original base and continues to serve individuals and families.

Can it evolve? Of course it can. It is up to us to make it do so.