Self-regulation took huge steps forward. The profession developed a meaningful code of ethics and some disciplinary rules with teeth. Despite the resistance of the financial services industry, common talk centered around fiduciary standards and putting the client’s interests first.
Collectively, we took many steps to make this a reality, including an aggressive, consumer-friendly lawsuit against the SEC.
Yet for all that, we did not really step into the world even as the world increased its dependencies on money. On the whole, we did not grasp the importance of our work, much less its power. We did not comprehend the realities and implications of personal finance within an economic system that marginalized the individual even as it demanded that individuals play the money game. And they had to play it skillfully. There were huge costs for bad luck or incompetence.
Money skills have since become survival skills, even though they do not come naturally to human beings.
Unfortunately, Financial Planning 2.0 cannot take us where we must go. It simply lacks a public element. And it continues to keep unsustainable ties with industry. If clients come first, we cannot, as fiduciaries, have legal obligations to serve non-clients.
In no small part, Financial Planning 3.0 now means we should be part of an early warning system for bad product, not silent accomplices to virtual fraud. Manufacturing, sales and advice are all honorable undertakings, but they ought not be mixed. Farmers grow food for the grocers to sell to chefs, who serve their patrons. The patrons get the best of each but the roles in the chain are clear.
We also need a vocabulary and we need separation from macroeconomics in general. Any group that looks at individuals through the lens as just one of a group—as a species called “homo economicus”—must be viewed skeptically.
This worldview asks about our profession’s priorities. Is it the financial planner’s primary duty to maximize the client’s money? Or is it to insulate the client from harm or be a coach? Or is it to “help individuals and families address their personal relationships with money and the fearsome forces it generates”?
An authentic profession needs strong academics. Accordingly, what areas of knowledge and inquiry ought to inform Financial Planning 3.0? I personally see financial planning as the ultimate liberal arts profession. Shouldn’t our gardens of knowledge be resplendent with cross-disciplinary relationships?
What public roles ought we play? Do we just serve as informed advocates for individuals in matters affecting their individual relationships with money? Or can we provide counterweights in issues of public policy? How can we help leaders and decision-makers grasp the implications of their work without getting caught in impossible politics?
Can we help grow new, perhaps healthier forms of money? Can we develop better methods for making our skills and knowledge accessible to those who want and need them?
Financial Planning 3.0 will contribute to the most important profession of the 21st century because we work with the most powerful and pervasive secular force on the planet. Because money competency is a 21st century survival skill. It has become our primary source of mutual interaction and is an integral part of every issue of consequence facing individuals, governments and enterprises alike. It touches everything and everybody. So the world needs us to step up.