The clouds have silver linings.  While none of us can be pleased that the financial reform legislation falls short of imposing fiduciary standards on all those claiming to be financial advisors, it does have certain charms.  Namely, it gives us a golden opportunity to underscore the differences between brands.  Certified Financial Planners ™ have cheerfully taken upon ourselves the full responsibility and accountability of fiduciary obligations; other “advisors” are employed by primary industries who spent millions/billions to avoid them.   This is a distinction of great difference.

As a wise man of my acquaintance once noted, “Your shot may be cheap but it is not free.”  It will not be “free” for Wall St. to disclaim the fiduciary standard– especially in view of its relatively warm embrace by the CFP community.  Wirehouse brokers can continue to hide behind  “suitability” even as CFP® practitioners have declared themselves to be trustworthy servants and something more than salespeople.  We have said to folks without equivocation “When you hire one of us, you can be sure we are on your side.”

When it comes to money, this is a vital distinction. We put the client ahead of ourselves.  We don’t “produce” just because a sale is made.  We “produce” because we have served the client’s best interests—especially when the client has trusted us to tell them what those “best interests” are. 

This is not to suggest that financial product salespeople just sell junk or are inherently untrustworthy.  But that is not the point.  When it comes to complex issues like health and money, most people need an advisory fiduciary between them and the purchase of complex, intangible products. 

Another truth, if you can imitate Ponzi, et al, then the risk is palpable.  There are dangerous potential consequences of working with those who would not be fiduciaries. 

And we need to tell the story.  What of those who have cheerfully committed to placing their client’s interests ahead of their own?  That CFP® licensees have stepped into accepting our fiduciary status is one of the great tales of the 21st century. Who else has committed their credentials and their well-publicized ethics to fair dealing and lofty standards?  Ought that not be trumpeted and promoted?  Some denizens of “Wall St.” will no doubt continue their business as usual but what a great opportunity for CFP’s to claim the high road.   

There is a price to be paid for permission to play fast and loose, refusing to step up to the line of responsibility and acting like it is ok for “caveat emptor” to apply to clients clearly relying upon their advisors for advice in relationships of trust and confidence.  The point is that this is a golden opportunity to draw the distinctions between “advisors” and those who have declined the opportunity to declare their trustworthiness and adroitly avoided commitment to the standards implied by their employers’ media. 

The trumpets should blare: “We are not them and they are not us. ”


An old friend is back in the news. Once again, we hear a lot of jabber about our economic system and whether we should have more regulation or more freedom from regulation. I suggest that financial planners are uniquely positioned to provide special perspective on the issues.

We have to change the nature of how we address the issues, however. We are not doing ourselves any favors by arguing macro policies that are merely continuations of old and irresolvable arguments between partial truths. People have been clashing over these issues for a very long time to no productive end that I can see. Rather, I think we should acknowledge that both “regulation” and “free-market” are going to be part of whatever system exists. From there, I suggest we should be looking at what is special about our perspectives. I think it is part of financial planning’s special gifts back to the world that we can look at them through the eyes of folks with the unique experiences of working with individuals and the consequences of words in action– for better and for worse.

Some of this is a matter of chosen metaphors. Obviously, economies must function within containers reflecting human and legal realities. Accordingly, as noted above, there will be some measure of both “free markets” and “regulation” in any functional economic system. From there, the issue is the nature of the container in which we function from a macro perspective.  If we look at them as the metaphoric container in which individuals function for their financial lives, then our conversations can engage the nature of that container and work towards creating the sort of container that lets us build wealth consistently and productively.

The mistake is to treat these issues as swords– which seems to be the prevailing temptation.  With that view, the conflict between the “regulation” and “free-market” will be as unproductive as it will be perpetual. At this point in history, these swords stem from the capitalist/communist dialectic that is as tired as it is old.  The Wealth of Nations was published in 1776 and Capital (Das Kapital)  was published in 1867.  Both were written in mostly preindustrial resource-based economies and class-based social orders. Communications were primitive, at best. Political theory was essentially undeveloped. While market tampering shenanigans certainly existed in Marx’s time, they did not have the reach of today’s financial vehicles. Neither were institutions “too big to fail” nor could computer-based financial instruments exists. Most importantly, people’s lives were considerably less money based than is the case today. The same forces that gave rise to money based lives are the same ones that have generated a robust financial planning profession.

The question is what to do with this? Especially, how can we help with the “free markets” versus “government regulation and administration” conversations in the creation of viable, healthy containers? As personal financial advisors what do we know that we can share? How can we hold our end of the rope to provide appropriate tension within the conversation?

This business of working with money is generating huge issues. I don’t believe we can afford to sit on the sidelines as others hash these out without the benefit of our experience and perspective. It is a huge challenge.

I want to encourage you to sign up for the Art of Hosting gathering at the end of August in Estes Park sponsored by FPA (http://www.berkana.org/index.php?option=com_content&task=category&sectionid=14&id=345&Itemid=447. I believe this gathering will be important to these issues and that these issues are important to the world.

When they asked if I would blog about the future of financial planning, all I really heard was “THE FUTURE.”   I can only imagine how my eyes just lit up as a confused thought assortment tumbled through my brain.  At first, little epiphanies combined in a sort of nonsensical circularity.  “The future of financial planning… is… the future.”  Whoa.  Profound.

Then, that thought settled into making sense.  It occurred to me that, in fact, financial planning is mostly about the future.   The phrase was an appropriate connection between current work and visioning and the anticipated fruits of a job well done.  It was not mere circularity.

The “Future.”  Yes, that future.  The one where we are all going to live, together with our babies and theirs; the future that stretches endlessly through time and competes directly with the second law of thermodynamics for systemic relevance.

In that future, money is a big doggone deal and takes the financial planning profession along with it.  That future does not function without money.  Indeed, it doesn’t even function very well if people don’t have sufficient understanding of money that they can make intelligent, healthy decisions for themselves and others.  It is a future to which we, as financial planners, are particularly accountable.

Now, if you are going to get anything out of this posting, you must realize one thing.   When it comes to the financial planning profession, I am hopelessly aspirational.   I believe financial planning is an authentic profession.  It is very special.  For one thing, authentic professions don’t come along every day.  IMHO, financial planning is the first genuinely new one to emerge in literally hundreds of years.  It may not be fully matured but it has all the elements of the professions generally accepted as authentic plus the compelling immediacy of desperately needed skills and perspectives.  As humanity experiences rapid, volatile change, it needs the services of noble fiduciary advisors who understand money and the money forces and grasp optimal manners for functioning within them. 

What is more, I believe financial planning or its offspring will be the single most important authentic profession of the 21st century.  This profession ought to be a vital and active participant in humanity’s continued transition from resources based societies and economies to social orders based more on brains than brawn together with increased interdependencies among peoples of diverse histories and ethnicity. 

I see the future demanding that financial planners step up to claim their rightful place as trustworthy advisors in the domain of personal finance.  I see financial planning as serving all families and individuals who deal with money.  This means developing the profession’s capacities for helping individuals understand money and come to terms with its demands for themselves, their families and their communities.  Perhaps most importantly, I see the financial planning profession helping people prepare for the interfaces between life’s possibilities, good and bad, money and current decision making. 

Remember, you were warned that I was hopelessly aspirational.  I realize that many do not see this profession in either transcendent or populist terms.   That may just be me. 

Then there is the part where we need to make a living.  There are those who ask how profitable businesses could serve the less than wealthy?  But I see some practice models coming along that are making runs at it.  Personally, I trust technology, competition, creativity and the world wide web to work the magic required to make it so.  As a firm believer that solid businesses are based on finding needs and filling them, I suspect the future requires that we ought to be both creative and aggressive in looking for ways to fill them.

The future demands that we understand money.  Human evolution requires that we understand money.  As the species has moved from hunters and gatherers through agrarian and resources based cultures to more complex urbanized economies to the communications age to whatever is emerging currently, our species has become increasingly money centric.  Indeed, human evolution is a money based phenomena as much as anything.   This involves skills that do not come naturally to human beings.  To engage our futures, human beings need the help that financial planners ought to provide.

Money is humanity’s most profound creation.  It is our very best attempt as a species to engage with each other productively and, mostly, peacefully. Our relationships with money are our most sublime relationships of reciprocity and exchange.  Though we have discovered its downsides, money is humanity’s most elegantly created tool for addressing our relationships with each other. 

The future requires that we understand money, both its good parts and its not so good parts.   People need help grasping money’s demands and responding healthfully and appropriately.  This means financial planners and financially literate personal advisors. 

And it is our privilege to work with individuals as they develop their own relationships with money.  As for where this all takes us in terms of our gardens of knowledge, our roles in society, the natures of our practices, and so forth  who knows?   But these will be the future of financial planning.  As goes the song, “The future is so bright, I gotta wear shades.”

Richard B. Wagner, JD, CFP®
WorthLiving LLC
Denver, Colorado

Three months of 2010 have passed: a great time to do an assessment of how this year has treated you thus far, and vice versa. So pull up a chair, roll up your sleeves, and have a conversation…with yourself. Be prepared to talk about your business goals, the Vision Thing, and next steps after you’ve completed your self-conversation.

I. Business Goals:

What 2010 business goals did you set for yourself, or did you co-create with your partner, employer, supervisor, or team? Write down the list of goals; for each one, ask yourself the following questions.

How far along am I on this goal? (If possible, state this in terms of “percent complete”, e.g., “I brought in two new clients, against the 2010 goal of five.” If that’s not possible, describe the steps you’ve taken or success milestones achieved.)

What’s been a high point event, a small success, or an encouraging sign in this area? (For example, “I did a great presentation to the Chamber of Commerce.”) What factors – including my own thinking or actions – contributed to this occurrence? And, most importantly, how can I bring about more of these positive events and outcomes? And who can be a resource to me? (Be prepared to write down an action commitment in this area, in a moment.)

What’s been a positive surprise for me in this goal area? What’s been a “rude surprise”? What do these surprises tell me?

What have I learned, that I can apply in this goal area, or to any other? (This can include what you have learned from a lack of progress, or even a “reversal of fortune,” in this goal area.)

When you have answered these questions for each goal, summarize it in a table with the following categories:

Goal                           Progress/                              Positive                     Action

Area                         Outcomes                            Indicators               Commitment

II. The Vision Thing

Stepping back and looking at the array of goals, what’s the bigger picture here? What is your long-range purpose or vision, which these goals are designed to serve? Which of these goals, if attained, will move you further towards that vision? (For example, will signing those two new clients bring you closer to a partnership? Will that great C of C presentation attract the interest of potential referral sources, strategic partners, or competing firms?)

If a given goal isn’t consistent with your long-range direction, what can you do to bring them into closer alignment? For example, can you re-negotiate or change the goal, or delegate it to someone for whom it’s a better fit? Each of these options can also open the way to establish a goal with greater long-term payoff for you, and presumably for your firm.

A final question: Is your ladder pointed against the right wall? (Let me explain: Joseph Campbell, the great mythologist, said that the trouble “with climbing the ladder of success” is that when you get to the top, you may find that your ladder is pointed against the wrong wall. Don’t let that happen to you! A quarterly self-review is a good time to inquire about your ladder, and your wall.) If it’s leaning against the wrong wall, it’s time for a larger conversation with yourself.

III. Now What?

Where do you go and what do you do, once you have completed this self-review? There are several options, and they aren’t mutually exclusive.

If you’re a business owner, you can (a) share your review with your business partner(s), and listen to theirs, (b) encourage your employees to conduct such a review and set up a time to have each of them share it with you, and/or (c) incorporate such an activity as part of a firm- or team-wide retreat day.

If you’re an employee, you can (a) ask to meet with your employer, team leader, or supervisor to share the self-review, (b) suggest that each member of your team conduct and share their self-reviews with the group, and/or (c) meet with a trusted colleague to share yours, and offer to hear theirs.

Whatever your position in the organization, you can also share your self-review with trusted outside parties, such as a spouse, life partner, friend, mentor, and/or study group.

My prescription: take one self-review quarterly. Unlimited refills are available and, when taken as directed, there are no unpleasant side effects.

I invite you to use Reply to let us know how your self-review went, and what you’re excited about for the second quarter.

edJacobsonEd Jacobson, Ph.D.
Edward A. Jacobson Associates
Madison, WI

For many of us, there is so much time spent planning for clients that we forget it’s also important to plan for ourselves. And as financial planners, this means not only planning for our own individual financial futures, but also our personal development as professionals.

The importance of professional development is embodied in the requirement of many professional designations to earn Continuing Education credits to maintain and advance their knowledge base. But CE requirements are a minimum requirement. If you want to advance your career and success as a professional more quickly and to higher levels, you need to challenge yourself beyond minimums!

Accordingly, do you have a plan for 2010 about how you will improve yourself as a professional? What steps will you take to advance your knowledge and skills? Have you set goals for yourself about what you will accomplish? It may already be April, but it’s not too late to set goals between now and the end of the goal, and a path for 2011 and beyond!

Here are some areas you might examine regarding your own development goals:

Conferences: What conferences will you attend? Will you attend local events to take advantage of the resources in your area? Will you attend at least one national event to gain some perspective on the planning issues and opportunities beyond what you are exposed to in your local area?

Content: What kind of content are you looking for? Will you try to learn about new technical topics? Or your communication skills? Will you focus on practice management? What about leadership?

Coursework: Will you enroll in any (new) programs for professional development? Will you begin down the path of a new program to be completed incrementally over the span of several years? Is there a program you started in the past but never finished that you can pick up again?

Reading: What are you reading to stay abreast of new trends and changes? What newsletters and magazines are you reading? Have you bought any new books to read to challenge your thinking?

As we often point out to our clients, our ability to earn money – our human capital – is our greatest asset. Do you have a plan for how much time and money you will save and invest to maximize its growth?
michaelKitcesMichael Kitces
The Kitces Report
Columbia, Maryland

I work with a volunteer organization and sometimes we make mistakes.  It happened this past week, when we were supposed to prepare for 59 orders and we prepared for only 49.  It was 5 a.m., there were a few too many cooks in the kitchen and we simply made a mistake.  When the extra people showed up expecting an order, we didn’t have it.  Ten people experienced the same circumstances and 8 handled it gracefully.  Two, however, openly expressed their anger, even though they knew the circumstances.  Disappointment was felt by all ten:  two expresses anger.

William Bridges, author of several books on change and managing transitions, suggests that change is what happens in our life and world; transition is the process by which we deal with the change.  Maybe you too have noticed how two people can experience the same circumstances, with very different reactions.

How are you doing?  What has been your reaction to the current set of circumstances you are facing?  Some define “reaction” as what you do naturally and “response” as what you do when you take time to consider how you want to act.  When we take the time to pause and look at how we are responding, then we have the time to make a decision.  Is this how I want to respond or do I want to make another choice?

Take some time today and consider where in your life there is something changing or something unsettled.  Notice your reaction to the change, and consider how you can choose to make it work for you.  I invite you to share your observations and experiences.  We will all be glad you did!!!


Andrea White, MCC
Master Certified Coach
Financial Conversations

In the future we will not tell people what to do, we will clear a path for them.

As financial planners we are armed with rational information on how to make smart financial decisions.  We talk among ourselves about the importance of getting out the message that individuals must take more personal responsibility for their financial circumstances and well-being.  (As if financial planners, by virtue of being in the “know”, have conquered our own money issues and irrational behaviors.)

What I keep wondering about is the resistance to the message of financial responsibility, and the denial, head in the sand attitude that I frequently confront.  I see it in some of our clients, in terms of their acceptance of how much they can spend monthly and annually in order for their money to last their lives.  I see it in the responses I receive to my blogs on VibrantNation, aimed at women over 50.  I get responses like, “it’s too late for me”; “I might as well shoot myself”; “I can’t manage on my own”; “I can’t . . .I won’t . . .”

So for the future of financial planning, I wish for humility and understanding.  I wish for tools more effective than restating “be responsible” messages.  (As an example of the lack of effectiveness those kinds of messages have, the messages about the dangers of smoking have actually resulted in INCREASED smoking in Paris, France!)  There is a rebellious streak in most folks.  So, what might work?

I find hints in the new book, Switch: How to Change Things When Change Is Hard by Chip Heath and Dan Heath (Hardcover – Feb. 16, 2010).

They understand that for change to occur and to last an appeal must be made to the rational mind, the emotional heart, AND the path must be cleared and the way made as easy as possible.  In our planning processes, how are we actually making it hard for our clients to comply?  To succeed?  I’ve often told new planners who berate their clients for not completing their data questionnaires or sending in their documents in a timely fashion, “if it were so easy for your clients, they might not need you!”  We put up roadblocks to success instead of facilitating it, although our intentions are honorable.

Day to day life is crowded with the “should, must and ought to do’s” from which we yearn for escape.  Money trends to live in the “should do” area for most people.  Aren’t we adding to the list?  We are listed as a great profession to be IN, but I wonder if we are listed as a great professional to GO TO!

The Heath brothers in their book, make the case that what often looks like resistance, procrastination and denial is actually exhaustion.  Change is tiring.  To try to change several behaviors at once can create depression, fatigue and set one up for failure.  Think of your own attempts to change diet, exercise, or any routine.  To become more conscious about anything is tiring, requires new energy, effort and time.  I’m not sure financial planners view their plan ‘ACTION ITEMS’ in the way the clients do.  We get excited by the list of “to do’s” that represent, to us, forward motion.  But for our clients, for individuals, that list may create anxiety, tension and exhaustion.

We want to reach the middle class; the underserved and we want to make a difference in our client’s lives.  How can we clear the path to success?  Reduce the exhaustion?  Inspire change rather than denial?  Overcome the denial and lack of understanding? 

Can we stop justifying our fees by complicating money?  Clearing someone’s mental and emotional fog is worth a ton.  Helping someone take one step rather than burden them with ten or twenty action items, might lead to a simple success that builds the “change muscles” to take on more.  The future of financial planning will be about clearing the path, not just mapping it.

Elizabeth Jetton, CFP®
RTD Financial Advisors