If you don't know where you are going, any road will get you there. -Lewis Carroll
Proposition
Be it resolved: The mission and purpose of the financial planning profession is to help individuals and families meet the demands of money and the awesome forces that it generates.
This is not going to be a polite article. It is not a polite subject. In fact, it is one of those that pit friends against friends. Worse, it does not subdivide easily. Worst of all, it messes with our rice bowls.
My own beliefs are condensed in the "Proposition" above. I will get there. Meanwhile, feel free to disagree.
You wonder why this is important? I will get there, too.
From most perspectives, financial planning has been remarkably successful in its short, 40-plus years. We have good numbers. Our ranks include successful businesses and practices. We are gaining some respect in the media. In general, good people populate our profession. We have an excellent eye for the future. We are valued. All in all, this is not bad, not bad at all.
Yet something seems missing. It has to do with our identity. It feels like we can't quite make up our minds about what it is that we do, why it is that we do it and for whom we work. Indeed, who is "we"? Do we actually have a brand? Do folks know what to expect when they work with a financial planner?
In my early years with a financial services company, I was taught that financial planning's beauty was its excellence as the best financial product sales tool ever devised. If we gathered our data, honed in on an individual's values, soft spots and assorted vulnerabilities, and did an effective close, "financial planning" would enable us to sell a ton of the financial product manufactured by our employing entity or an associated company. And it did. The concept of "fiduciary" was not discussed; our primary loyalties went to the company. This is not to suggest we were encouraged to act contrary to a client's best interests. My company was a good company that kept its promises. That being said, nobody ever got praised for selling a term life policy rather than a cash value instrument. We rarely ventured outside the territory circumscribed by cash value life insurance, limited partnerships and mutual funds.
In the intervening time, financial planning has matured. For many of its practitioners, its extraordinary ramifications and importance to the lives of folks have become evident. We see it. We can feel it in our bellies. Yet for many others, financial planning remains a most excellent sales tool while primary loyalties remain with a primary financial product manufacturer, not the client. This is oil and water. The two factions cannot and will not mix.
Truth is, we are now more than 40 years in. This aspirational profession is no longer in its adolescence or its young adulthood. It is time for it to get a grip on its identity. We are old enough for this dialogue. If we crave the stature of "authentic profession," we can no longer skirt around commitment to a defining element: Are we needs-based salesmen or fiduciary advisors? The existing ambiguities are both palpable and malignant.
In the meantime, life has changed dramatically, both domestically and globally. Our ranks have exploded from not quite crowding an elevator to six-digit multiples spread throughout the world. Yet for the most part, financial planners are not really taken seriously-no small irony given that issues of personal finance dominate the news.