"We ought not to look back, unless it is to derive useful lessons from past errors and for the purpose of profiting by dear bought experience."
-George Washington

The editor queried, "Could you do a piece on the significance of last fall's events for financial planners?"

"You bet," I responded. The events of September and October 2008 seemed ripe for review-for both putting them in context and looking at their unfolding implications for ourselves and others.

Frankly, the financial planning community has not looked itself in the eye on the subject, much less a mirror. Though there has been ample weeping, wailing and gnashing of teeth, genuine self-examination has seemed sparse. Where were we? What were our responsibilities? What could we have done differently? Where do we fit in the scheme of things? All things considered, the various market crashes, currency threats, budget implosions, banking debacles, Ponzi schemes, employment downturns, foreclosures, government woes and personal tragedies were very big deals-and big challenges for the personal financial planning community. The issues are complex and they have brought us face to face with ourselves, our work and that revealing mirror.

Errors were made. Experience was "dearly bought." There are, indeed, lessons to be learned. George Washington got it right.
October 2008 was the proverbial wake-up call-especially for those folks having trouble separating financial planning from investment management. I wondered about financial planning's proper domain and methods for serving it. Are we personal advisors? Or should we simply serve product delivery roles?

In particular, how can fiduciary advisors step up to help folks in the bottom 95% of income or net worth in a country increasingly reliant on money for personal and social structure? As we tackle these questions, it seems we have arrays of lessons to learn.

Lesson I: The financial services industry is not our friend.
If we had any genuine doubts, the financial services industry proved it is no friend of either our clients or our profession. When the chips were down, it went for quick bucks, attempting to dazzle people with modern versions of the old shell game. In the process, it created gimmicks for its gimmicks without regard for consequences. By its extraordinary selfishness and greed, it threatened the underpinnings of international trading currencies and the livelihoods of billions. Then, when even more chips were down, the industry needed a taxpayer bailout while continuing to ravage pensions, real estate holdings, stocks and bonds and the lives of regular folks.

The lesson is simple. Fiduciary advisors may operate in the same sector-money-as the financial services industry. But we are not it. We're, in fact, on the opposite side. Because the industry has the power to hurt our clients and their well-being, we ought to be watching it with guard dog vigor on our clients' behalf. When we see the financial services industry engaging in dangerous behaviors, we must call them on it. Truth be told, we are among the few in a position to do this intelligently. Remember, most industries have gatekeepers. Can you imagine the physician community's response to intentional pharmaceutical sabotage?

Gatekeepers in other industries may call for contaminated food and drink to be removed from the shelves. Or disqualify and shame athletes who break the rules by doping. Yet the financial services industry can seemingly go back at it with impunity, bonuses and all. Where have our voices been when they do so?

Financial advisors probably cannot escape being in the same bed with product manufacturers, but perhaps we should acknowledge that the industry too often just uses us for our bodies. It doesn't love us. It never loved us.

Lesson II: Industry is not us. We are not industry.
As a corollary to Lesson I, we must concede that our relationships with the financial services industry are muddy and confusing. Many of us started as industry employees or started our careers with industry ties. Naturally, we still have friends there and feel those strong ties and loyalties. And many of us still get some income from industry checks.

What's more, it's hard to criticize the industry when it supports us. It gives us significant financial support for our membership associations and various gatherings. It sponsors our periodicals. At the end of the day, we need the financial services industry to manufacture quality products. To be fair, it mostly does that.

At that same day's end, we must understand the need to separate ourselves from the financial services industry. Our first loyalties must be to our clients.

Lesson III. You cannot diversify away from systemic risk.
I missed this one on the CFP certification test and have been pondering it curiously ever since. But the lesson has ramifications. It means you must be prepared and resilient. The trick is to identify the systems from which you cannot take refuge, grasp their risks, assess whether they can be managed and meet them head-on.

We are all pretty much stuck with the American economy as a baseline global system. If it goes down, we will mostly all go down with it, regardless of our risk-aversion gimmicks. In the meantime, we have options for where we live, how we invest and what sorts of skills we develop. If we cannot get away from certain risks by hedging our bets, we can try to mitigate and survive them.

Lesson IV: Mechanics and finance don't mix.
Economics is not a science. An economy is not a mechanism. Rather, economies more closely resemble gardens with capricious arrays of fruits, vegetables and grains and they less resemble machines predictably subject to the immutable laws of physics.

Because of this, economies necessarily comprise intriguing combinations of markets, statistics, customs, human evolution, individual peculiarities, business, contexts, luck and manipulation. But levers and drivers don't work as well as economists think they do. Mathematics is useful only for as long as we recognize it creates maps that ought not to be confused with actual territories.

For instance, economists thought they had come up with formulas proving that their derivatives worked in our real world. When they put their gobbledygook recipes on their computers, they forgot that the recipes themselves affected human activity-unfortunately forgetting Heisenberg's truths about the scientist's impact on his own experiments. Oops. In our real world, the money forces unleashed by derivatives, horrid lending practices, Ponzi schemes and "mug and run" hedge funds tempted, cajoled and seduced vulnerable humans, bringing ruin to millions. These forces came perilously close to bringing down our financial systems. The lesson commands: Thou shalt not confuse the precision of mathematics with the robust complexities of modern money systems and human nature.

To put a finer point on it, October '08 teaches that the financial planning arts must include our abilities to draw distinctions between mechanics and common sense. Economies are not machines subject to precise manipulation. People live in real time, where greed and selfishness crashes and recessions happen. People count. Levers don't work.

Lesson V: We must be very careful about our promises.
Financial planning is more art and craft than science. We do not have functional crystal balls, tea leaves, tarot cards or chicken entrails. We can help people understand their risks and opportunities and, in turn, help them make informed and appropriate decisions. We cannot protect them from life's vagaries or volatile markets.

Financial planning's fundamental premise is helping people address the astounding forces money generates. Sometimes money goes whacky for unpredictable or misunderstood reasons. When that happens, genuine risk tolerances must be reviewed coldly and pitilessly, and investors should always understand that the worst could happen. That's why we call it "risk."

Lesson VI: We have not fully grasped the depth and breadth of the financial planner's domain.
Authentic professions claim their domains and serve them. Financial planning has not done this. It has not claimed the entire domain of personal financial advice as its own; that is we have yet to accept the full range of issues that arise in our personal relationships with money. I suggest we have been scared of the implicit responsibilities of an authentic profession.

Last year's events suggest there is huge public call for fiduciary advisors to help individuals intelligently deal with these money forces and the demands money makes of us. Quality fiduciary advice would have helped a lot of folks understand the swamp before they ventured onto quicksand. Instead, we punted. Or we went back to "business as usual."

Honestly, we fell short. It all suggests we should not take ourselves, our work or its implications for granted. Remembering that the exam elements for the CFP test have remained unchanged since 1971, in October 2008's aftermath we must ask ourselves: What is the financial planner's job in "tough economic times"? Do our training and education prepare us to address the full range of these challenges? What are we missing?

What do we owe society? Are we buyers for our clients or sellers? Do we apologize for our vendors or do we hold them accountable? What are the legitimate expectations of a fiduciary advisor? What should we know and what shall we do with it? How should we work with clients? How could we prepare for the next time?

Lesson VII: "Economic man" is a figment of the economist's imagination.
People are not rational. This is no longer truly open for discussion. Folks who look other folks in the eye and talk about money-namely, financial planners-need to spend some time with economists to help them with their understanding of the human beast. See Lesson IV.

Lesson VIII: It is imperative that we develop a more accurate and wholesome understanding of money and its nature.
Our nation's social and physical infrastructure is framed by money. We learned last fall that if the money does not work as hoped, we may experience dangerous social and physical fallout. Indeed, this has hit both the public and the private sectors with a vengeance. As post-World War II thinking gives way to mathematically impossible entitlement programs, as almost everyone confuses "wealth" with "income" and as fewer folks can recall other times, this money stuff gets scary. Some among us must forthrightly address issues of reciprocity and exchange while hosting conversations about possibilities and implications.

Unfortunately, it is unlikely that money will ever work as hoped. Stuff happens. Economies are not machines and our money contains the elements of our souls. We must learn to talk about money with new language outside the tired shibboleths of capitalist/communist/socialist dialectics.

Sadly, our cultural taboos came to haunt last fall. The consequences of uninformed manipulation in the worlds of credit, housing and real estate created seismic jolts to our economy. Thus, we should all be very scared about pensions, health care, elder care, education, physical infrastructure, resource allocation, the social aspects of work and so forth.

No society in humanity's history has ever been so dependent on intangibles. No human beings in history have been asked to anticipate such long lives while being so dependent on money and unearned income. These circumstances are new and they are unprecedented. October '08 gave us a whiff of coming attractions.

Lesson IX: Money is not inherently stable or reliable.
Money can go away easily. Illness or injury, unemployment, the forceful appropriation of our assets, personal tragedy, recession, manipulation, theft and economic collapse can all threaten money. October '08 gives us new insights. For example, it taught us that it is not in the nature of money to provide reliable security. It also showed us how "more" is never enough in a world where "less" can happen overnight through no fault of our own.

Lesson X: Financial advisors have profound responsibilities.
If fiduciary advisors proclaim this domain of personal financial advice as our own, even though we don't have all the answers, we can be a source of practical wisdom for all our fellow citizens.

This is why we are here.

Look in the mirror. There is no one else.

Richard B. Wagner, JD, CFP, is the principal of WorthLiving LLC, based in Denver. He is the 2003 recipient of the Financial Planning Association's P. Kemp Fain Jr. Award, which recognizes a member who has made outstanding contributions to the profession.