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'Be Careful What You Wish For'

Last post 12-17-2007 8:01 AM by Kenneth Dresel. 1 replies.
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  • 10-16-2007 12:00 PM

    'Be Careful What You Wish For'

    The message of major firms involved in financial planning might best be summed up as, “We’re doing it, we’re doing it well, we’re getting better all the time—and we aren’t going away.” (See “Be Careful What You Wish For” http://www.fpanet.org/journal/articles/2007_Issues/jfp1007-art1.cfm in the October Journal of Financial Planning.)

                   

    Major firms believe they have a valuable role to play in advancing the profession and serving clients. Of course, one of their arguments is that they can serve many more people than the profession as embodied by the solo practitioner or small firm can. And based on refinements to their structure and client offerings post-Rule 202, they may be changing the competitive landscape significantly. They’re not the bad guys, says one executive, and they don’t believe it serves anybody’s interest for there to be an “us versus them” mentality in the profession or within FPA membership.

     

    What do you think? Are they the key to advancing the profession and the acceptance of financial planning by consumers in a major way? Will they soon be viewed as consistently offering Real Financial Planning, as opposed to just “small ‘f’ financial” and “small ‘p’ planning”?

     

    Share your thoughts!

    Carly Schulaka
    Managing Editor
    Practice Management Solutions magazine
    Financial Planning Association
    4100 East Mississippi Ave., Ste 400
    Denver, CO 80246
    (303) 759-4900 x 7322
    (800) 322-4237
    Carly.Schulaka@FPAnet.org
  • 12-17-2007 8:01 AM In reply to

    Re: 'Be Careful What You Wish For'

    I find the discussion of "who does it best" a very interesting one. Albeit I work in a smaller market (approx 250,000 MSA) but a very wealthy one. What I've discovered by talking to planners and non-planners alike in the area is that nobody has "IT" figured out. In fact, we have an terrible time defining what "IT" is so that we can have a discussion about it.

    It doesn't seem to matter whether you're a fee-only, commission-only, fee and commission, RIA, work for a broker dealer or some hybrid in between. This discussion is no different than the discussion over leading a relationship with products rather than planning. We've come to a consensus that if we're going to be true Planners (capital "P") then it's about the relationship we form. How can we then turn around and have the exact same type of discussion and spend so much time and energy defending our positions that the way "WE" charge a client is the ONLY way it should be done.

    In a previous life, I helped run a retail organization. When we were tackling an issue we would sit in the board room and list all the potential topics we would need to discuss to resolve the issue. We would then narrow our focus to the Top 5 and most of the time we could come to the resolution by intense focus on the top 5 areas. The saying was often "it's an interesting area, but it will never make the top 5".  This simply relates to the fact that we can spend our time on lots of areas but unless they're pertinent to the outcome, why bother. I believe the "how you charge" area wouldn't make the top 5.

    I've yet to find those who really seem to care and genuinely desire to do what's best for the client clustered at particular types of firms or getting paid a certain way. I believe if we'll focus on how a Planner establishes a relationship, implements the relationship, reveiws the relationship and inhances the image of our industry we won't worry so much about convincing everyone to do it one way. After all, our clients aren't all the same nor should our advice be all the same.

    Broker-dealers seem to be putting a tremendous amount of money and effort into "growing" planners within their organizations. They're stressing and paying for the CFP Certificant training, enhancing their software packages, enhancing opportunities for those who build their wealth planning practices and offering very high level training in the planning areas. All while increasing product knowledge, flexible platforms, web access and back office support. I have to believe that this is great for our industry and our image. Now there's a Top 5 discussion!

    RIA's seem to looking for higher level producers to implement planning strategies for wealthier clients and families. They continue to be the driver behind cutting edge technology trends, top notch service models, innovative partnering structures with other providers and working with our Universities to spread the CFP message. That's a Top 5 discussion if I've ever seen one!

    We need to realize that this industry is rebuilt daily by passionate people with a heart for planning. And if you've been living anywhere except a cave for the past few years it's become obvious that understanding and being able to implement a comprehensive financial plan if very similar to the DOS or Windows discussion years ago (I hope everyone knows the outcome). We serve the masses who for the most part don't have even a small part of the knowledge they need and we can provide and it's up to us to further THAT discussion for their benefit regardless of where we work or how we charge for what we do.

     

     

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