We’ve seen some serious evolution in the profession of Financial Planning. As a profession that has sprung up out of a hard-core sales world, I think we can be proud to see the ever-increasing inclination toward ethical practice and good outcomes for clients. I still think we’re trying to shake off the “policy-smous” reputation reminiscent of our beginnings, but things are improving. I recall the start of my career, nearly 20 years ago now, training financial advisors at the time, we would joke that second to traffic cops, “financial planning” was the most despised profession.
Given the bad rep, even the policy-smous age had some good elements though (although admittedly, also many poor ones). What it did do, was get the client to the point of implementation. Although there wasn’t much in the way of ensuring it was an appropriate one, it was an effective mechanism to get clients to take action. Fortunately the tactics to overcome inertia have moved on, but the fact stands that without action, no amount of even the sincerest of pontifications can have any positive affect for the client at all. Getting them to take action, usually involving some sort of financial product, is undeniably a critical element in improving their financial circumstances. Let’s think of this part of a good financial outcome as appealing to the HAND, the metaphorical symbol for action and implementation. And it still feels like there’s plenty of opportunity for more evolution, making it easier for clients to access financial advice and to execute the outcomes.
Then things started evolving a bit and we started making an appeal to the client’s HEAD. We started doing a better job of analysing their portfolio, tax situation, cashflows over time, estates over generations, personal risks, and so on. This was an important advancement as we cultivated the tools and artefacts to validate the need for a trained specialist in the profession of advancing our client’s financial welfare. Unfortunately though, so too did the profession start becoming more fancy. To show clients how clever we had become, we’d speak to them in a language that they couldn’t understand. Big documents, reams of analyses, economic commentary, graphs, regulatory jargon and terms & conditions. We were living and breathing this new HEAD-space. I recall sitting in FPI sessions listening to Marius Botha (not to pick on Marius, I think he’s awesome) speculating on the “… promulgation of sub-paragraph B of the white paper separating the discourse of neo-libertarianism behind the state of Section 11W …” etc , etc. And thinking “What the hell?!?!” Which planners were talking to which clients about this crap? As a CFP Professional, I didn’t have the inclination to stay tuned in for longer than a minute. What must clients think? And I’ve seen planners that speak to clients in the same way…
Not to take away from its importance, good client outcomes need to have an element that appeals to the HEAD as well. But if your clients are saying to you, “You choose, you know best”, metaphorically, you haven’t flipped on any lights for them. You may have been telling them a whole bunch of stuff but unless you actually help them to hear, you haven’t made any connection at all.
Finally, I think we’re in the process of moving into the age of the HEART. This is the age where we make genuine, generous connections with our clients. We stop dealing with clients as “experts” and rather make connections where clients can feel truly enlightened, empowered and in control. We speak to them on their terms, deal with their money so they can understand. We’ll know when we’ve connected with the HEART. Clients feel inspired, committed, impassioned. Getting to this point isn’t obvious or easy. You have to help clients make the connections between their money and their day-to-day lives. And help make the day-to-day stuff feel like it counts. If your advice process looks the same as it did ten years ago, I bet your clients are missing the third important ingredient.
The real magic happens where we connect to clients with the HEART, HEAD and HAND. This is the space where clients are committed to their plans and conscious of their behaviour. This is also the space, not-so-coincidentally where clients are committed to the financial planning relationship and experience real value.