There are several ways to look at the financial planning profession since it was conceived 50 years ago.

From the vantage point of financial literacy, a major segment of the American population is a lot more knowledgeable than it was in 1969. Far more people have a rudimentary understanding of the principles of savings and investing than they did half a century ago.

As Dan Moisand writes in this month’s cover story on page 46, financial advisors may question how realistic the FIRE (Financial Independence, Retire Early) movement is. But many millennials have bought into the concept of financial freedom at a much earlier age than previous generations. If the movement continues to grow, it will have positive implications for society.

In contrast, earlier generations concentrated on providing for their families, and guiding their children into adulthood before securing their retirement. The baby boom generation in particular benefited from very favorable financial markets for many of the years between 1980 and 2019.

Yet if the small subset of Americans—maybe 10% of the population—who seek out financial advice are better off than they were in 1969, is American society as a whole really better off? There is a strong argument to be made it isn’t.

Part of the reason is timing. In 1969, America was sitting at the zenith of post-World War II prosperity. For the previous 25 years, a productivity boom spurred steadily rising living standards. That all came to a startling halt in the 1970s.

It’s tempting to look back at the pre-1973 oil embargo years through rose-colored glasses. More people had defined benefit plans, but pensions were all we imagine they were today—many provided only a marginal income. But if Americans didn’t have lifetime employment like the Japanese, job security was a lot better. In retrospect, the nation was very lucky financial planning came along when it did.

Moisand asks whether the financial planning profession is in peril. Personally, I don’t think so. But it’s obvious the demand and need for financial advice totally outstrips the ability of the current universe of practitioners to meet it. That’s America’s problem and your opportunity.

Email me at [email protected] with your opinion.

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