CHAPTER 1
Today's Financial Planning Profession

OVERVIEW

Today's financial planning profession is very different from the profession of the past. To put it into perspective from a TV commercial, "This is not your father's Oldsmobile!" The main reason for this is the world is changing rapidly. Probably too rapidly for most. Just look at the past year and notice the added stress, concern, and uncertainty many of our clients, friends, and family members have had with their financial portfolios, as well as other critical aspects that need to be addressed and thought out well, and ultimately put into motion so our clients have a legitimate chance of making their financial lives better going forward. In fact, probably one of the best things that is happening in these uncertain times is that many people who have not put in the time to manage their financial affairs are finally realizing the significance of being well prepared going forward.

So, the question becomes, how can you effectively plan to maintain your edge in this unique profession while managing your clients' expectations from the get-go? It's not a straight shot for your clients. Planners have to be forthright in their discussions with clients, which is no easy task. We will cover all aspects of making these objectives happen.

You will need to make changes to your practices to cover the new norm. The 2020s will certainly take our practices to the next level. The uncertainty that will exist going forward as well as the technological advances will tend to affect how we go about planning. Guidance will be provided for those planners looking to advance their practices to the next level, and for those individuals looking to becoming involved for the first time, through the development of a practical work program for entering a rich and rewarding profession in a no-nonsense manner.

This profession is all about "give-backs" and truly making a difference. If your practice is properly positioned to take advantage of helping others in a wonderful and rewarding manner, and you have the mantra necessary to better enlighten your clients' financial lives, then this book is for you.

As with any business, it is essential to build your infrastructure properly. Defining who you are, what business you are in, working in a large or niche firm, becoming a generalist or a specialist are all important pieces of the infrastructure. Establishing a solid approach to gaining the overall critical knowledge and how to relate that information to clients in a win-win manner are the keys. At any age or at any stage in your practice, arming yourself with the proper background and training is essential. The designation of choice for most advisors is attaining the CERTIFIED FINANCIAL PLANNERT (CFP®) certification. Whether or not you are currently employed in this field, you need to carefully think through what's essential for you to pursue going forward.

For those of you already in the field, it is important to look at your existing practice to decide which way to take it during this decade. For those advisors who want to specialize in their field(s) of choice, or for those individuals looking to enter the profession, it is important to be specific as to what you are looking to accomplish. With the changes surrounding our profession, this re-evaluation is key to helping our clients become better financially prepared and in continuing to expand our practices going forward.

For those of you looking to enter the profession or those who have recently done so, working at some of the larger firms in various functions - such as in generalist, specialist, back office assistant, or sales capacities, in niche practices, with advisory or ancillary responsibilities, or other realms of the profession - is a good starting point to gain an understanding of what is necessary. I am an advocate of learning on someone else's nickel. Acquiring a strong foundation and proper infrastructure to set up your practice is necessary to shorten the learning curve and to be productive from the get-go. Internships and mentorships are excellent ways of learning some valuable habits and insights from true professionals, especially when starting out. It's now time to take your valuable experience to an even higher level.

FINANCIAL PLANNER VS. FINANCIAL ADVISOR

Let's start by making a key distinction between individuals working as a financial planner and as a financial advisor. Many times, these terms are used interchangeably. While there may be similarities between these jobs, there are some key differences. A financial planner is a professional who helps companies and individuals create a program to meet long-term financial goals and objectives, whereas financial advisor is generally a broader term for those individuals who help manage client money, including investments and other financial accounts.

A financial planner generally looks at the entire client picture as it relates to the various stages in life to help in the development and monitoring of a personalized financial plan. The plan incorporates many important general aspects for the client's well-being, including understanding client issues, dissecting the critical exposures, and recommending solutions and guidelines when dealing with many core subject areas, such as risk management and insurance planning, investment planning, income tax planning, education planning, retirement and employee benefits planning, estate planning, and many niche topics specific to certain client issues. While many financial planners do manage money for clients, as well as sell appropriate products and services for clients, they tend to integrate the above issues from both a monetary and behavioral platform to incorporate the necessities in each.

There are many services to which financial planners can subscribe to help them acquire the appropriate information for servicing their clients. They are all categorized by specialty. Many of the leading industrywide publications do annual comparisons to see what the differences are in the marketplace. But more on this later.

I have taught the education courses for eligibility to take the CFP® Certification Examination nationally for over 30 years, mainly through my Financial Planning Fast Track®, Inc. program. Constant feedback I receive is that the students are taught to gather information from the client and either transfer that data to another area of the company or enter it themselves into a software program, essentially acting as data gatherers. The thrust of this action is being pinpointed mainly for investment results and decisions when in fact the entire gamut of planning issues needs to come under focus first. Investment results are important, but they represent part of the overall picture and landscape.

This book will take you through the proper way to approach this profession. In addition to guidance from the author, many industry movers and shakers were interviewed for this book and their interpretations of what is needed to prepare and be successful during this next decade are incorporated throughout. Supplemental materials have also been included.

WHAT ARE THE "EXPECTATIONS FOR CHANGE" IN OUR PROFESSION?

Change is inevitable. Throughout life, things change. Progress represents change. We need to embrace it and learn from the past. Know where you are coming from and where you are going. The model for how we dispense advice has been rapidly changing.

"In today's world, you need to show clients value beyond a doubt. With complexity of needs, people want a singular experience that is powerful," says Ron Carson, Founder and CEO, Co-Chief Investment Strategist, Carson Wealth, Omaha, NE.

"Planners who will succeed in our profession have the genuine desire to give back to it. Part of the reason is that we need to expand the cadre of high-quality financial planners. Demand is enormous while supply is constrained. We need to greatly expand the size of supply," says Tim Kochis, Chief Executive Officer of Kochis Global, San Francisco. We are sitting on a goldmine, both in terms of what we can help our clients accomplish and in the overall good we can bring to society.

Rattiner's Baker's Dozen: "Expectations for Change" in Our Profession

1. Financial Planning as a "Profession"
2. Landscape
3. Developing Human Capital: Training and Recruiting Techniques for Entering the Profession
4. Specific Ideas for Growing Your Skill Set in Our Profession
5. Compensation
6. Technology
7. Growth and Entry into Our Profession: Buy vs. build
8. Change in Regulation
9. Holistic Financial Planning
10. Changing of the Guards: The Expanded Family Base and Addressing Additional Needs
11. Planner Approach: "Cause vs. Effect"
12. Behavior Patterns: Making Sure the Client "Gets" It
13. Communication and People Skills

FINANCIAL PLANNING AS A "PROFESSION"

In our landscape, financial markets struggle with how we pay for the advice we are getting and are looking to continue revamping, as stated earlier. Based on that scenario, we can make the argument that perhaps we are not a profession, says Nathan Harness, Ph.D., CFP® TD Ameritrade Director of Financial Planning, Texas A&M University, College Station, TX. There should be a sense of unity in our profession that forms the future, perhaps, rather...