Financial planning, as a relatively new profession, has evolved rapidly. Initially, it started as an aggregation of previously separate financial industry services – brokerage, banking and insurance – but took a big leap forward when the first class of Certified Financial Planner™ (CFP®) designation holders graduated in 1973.
Completion of this five-course program marks a “hands-on” approach to financial planning that has done the profession a lot of good. But it also caused unintended damage, because as is often the case in any established profession, methods and mechanisms have a way of taking center stage, rather than those they serve.
I’m sure you’ve experienced this in some aspect of your life, and even with the most reputable professionals – an accountant whose techniques trample a more curious approach to your tax return, a lawyer who seems to have only one only tool in his toolbox, or even a doctor who seems to see you only through his lens, rather than seeking to know and understand yours.
The most expensive book I have ever bought
I will never forget, after years of chronic migraines, saving enough money to go to an internationally renowned specialist in Baltimore who did not accept insurance. To make sure I got the most out of my visit, I read his bestselling migraine prevention book cover to cover, listening to the dogs and highlighting all the other pages .
When I got to his office, I waited the mandatory 30 minutes beyond our scheduled appointment time, I waited another 10 minutes after being seated in an exam room, and finally he is came in, me on the edge of the paper-lined table. The first question he asked was, “So, have you read my book?”
He then went on to describe his main themes and recommended precisely the recommendations mentioned in the book, almost verbatim, all without really delving into when my headaches started or diagnosing why. I walked out a bit shocked, especially after writing a check for half my mortgage at the time for a single visit that clarified nothing more than the book I bought on Amazon
A new approach to financial planning
Likewise, as financial planning has grown from theory to practice, the practice has often outpaced the people it serves, resulting in a large number of financial plans for a diverse and eclectic range of clients. which look surprisingly similar. It’s more convention than conversation, more pattern than bespoke.
Yet there is a ‘new’ approach (which actually has its roots in the origins of the profession) that goes against convention and avoids templates. It has been given several different labels, but it can be summarized as financial life planning. This word stuck between finance and planning is the key differentiator because it also recalls the central theme of the entire strategy and methodology: you, the customer and your life.
Financial planning for life begins with an exploration of yourself, your current situation and circumstances, and your hopes, dreams, fears and concerns. Then it progresses to an articulation of your intentions and priorities in life which will then serve as the guide through which all financial planning is done.
Choose your own adventure
The end result is less of a sculpt like your financial planner or even a hand painted illustration where you choose the colors. It’s a pick-and-choose adventure book with an unlimited number of possible outcomes.
When I started practicing this type of financial planning, about 10 years into my career that now spans 23 years, I got a glimpse of something remarkable: financial planning as unique as those that she served. But more than that, I started to see the plans evolve far beyond customer expectations.
Because our lives typically move at such a breakneck pace, it’s very rare that we have a conversation based on both life and intention oriented. Sure, conversations about life will ensue over cocktails with friends, at family parties, or even during the commercials of the football matches you’re watching this weekend. But more often than not, these conversations are largely superficial, and even when they dive below the surface, these conversations rarely have a trajectory designed to lead to true intention, let alone action.
But through the practice of financial planning for life, I’ve seen clients, many of whom had already checked off most of the big financial planning boxes, change their financial plans quite dramatically once they made the work to explore life more deliberately.
I’ve seen clients who expected to work another 10 years to retire or change careers almost immediately. customers who expected to stay stuck in the same zip code for the rest of their lives chart a path for an adventurous move to a favorite destination (or move from their favorite destination to where their children and grandchildren lived to put the family first); clients who have radically changed their approach to charity or philanthropy; clients who expected to give their inheritance at an unknown future death date schedule a family meeting to discuss their expected inheritance while they are living; clients who wrote the book they had been embarrassed to admit they had always wanted to write; clients whose marriage was on the rocks due to financial disagreements saved by articulating their personal money stories for the first time.
Indeed, when the discussion begins with life before money, financial planning becomes much more interesting and meaningful for both client and advisor. Yes, this process still involves everything in the textbook – investment, insurance, retirement, tax and estate planning – but it takes on an entirely new form as a means, not an end.
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