What’s It All About?

By Richard Wagner | Finology

Aug 17

This business of “financial planning,” where are we heading?

Unfortunately, we have been fussing at each other for as long as I can remember.  Unfortunately squared, too few have talked about the point of it all.  Why are we engaged in this work and why is it needed?

We have argued over who is the real financial planner?  And why?  There was an old joke that went something like “Nobody in financial planning can be trusted except you and me…and I am not so sure about you.”  Proving once again that there is really no such thing as a “joke,” this little sketch seems so often reflected in our narratives about financial planning, financial services and our opinions of each other.

What’s going on?  I suggest that the advisory aspects of this business are still so young, it seems like we ought to figure out some notion of right action before we scorch our colleagues with allegations of impropriety.

Again, we must ask: What is this all about?  Will the real financial planner please stand?

First of all, about the term “financial planning,” what is it supposed to mean exactly?  It is certainly not the best term to describe this amazing, emergent money grounding profession.  First, its origins.  It was picked because the SEC rejected the term “financial counseling.”  This was not an auspicious start.  Then there are its structural weaknesses. Reading “planning’s” twelve synonyms (count’em: twelve) from my thesaurus, I am taken from “forecasting” to “scheduling” to “preparation.”  The synonyms are hefty but they not alike.  Neither do they address mission and purpose.

Next with its development: It has been deemed synonymous with financial product sales, joined with precise documents and services and applied to those who would simply deceive.  Then we are taken to the confusions of current usages with respect to “financial planning.”  Is it a noun?  Is it a verb? Is it a product or a service?  Is it an authentic professional advisory profession or a product delivery system?  None of these are bad; they just lead to different conclusions supported by legions of self-interested advocates.   In other words, I am just not sure how useful they are when talking about working for a reputable product manufacturer or helping individuals with their preparations for ninety-year life spans broken into days and weeks of temptations, life’s demands and miscellaneous cash flow imperatives.  For “planning,” we need more finely nuanced distinctions and we need to remember that disagreements over the true meaning of twelve hefty words can only be expected,  (And we need to stop calling each other names.)

Imagine a great restaurant.  Its chef accepts the responsibilities of creating exquisite dining experiences.  She is not in the farming business but she knows how to buy the very best produce from her friends the grocers.  She is not a designer  of atmospheres or menus, the researcher of legal requirements, the counter of monies or the preparer of taxes. She is not in any of those businesses though all are required for her success.  She is in the chef business.   Her friend the grocer is not in the chef business.  He is in the produce business.  He makes it his responsibility to provide his friend the chef with great produce.  When he does his job, the chef can do hers.  Then there are those others.  All are vital—but the mission and purpose of the restaurant is to provide an exquisite dining experience.

And so it is with what we now call financial planning.  There are great advisors who accept the responsibility of providing exquisite relationships and locating excellent product when appropriate.  There are great product manufactures providing outstanding ingredients.  And there are salespeople who help put the right folks together.

Truly, we need them all.  Rather, than fuss and fume, can’t we mutually appreciate and talk about what brings us together in mission and purpose?  In truth, probably none of us are “real financial planners” in the sense of exclusivity but we all have something to offer that does not require poaching each other’s business.

Isn’t it about money and our relationships with it?  Isn’t that worth mutual understanding and appreciation?  Isn’t that hard enough?


Dick Wagner

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