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A Look Into the Future: The Evolution of Financial Planning

This presentation looks into the possible evolution of financial planning.  Today, most financial planning curriculums are primarily numbers-based, with very little emphasis or training in client communication skills.  Few acknowledge the research of Daniel Kahneman that finds 90% of all financial decisions are made emotionally that is by the Limbic System.

Further, the most popular career path today assumes the new financial planning graduate or employee becomes a “junior planner” first, performing numbers facing duties and serving as a note taker in client meetings while they learn the craft from the “senior planner”. 

Learning the craft implies they will add and develop their client facing skills, eventually becoming a senior planner.  Inherent in being a senior planner is less involvement with the development of the financial plan and more emphasis on business development.

The presentation proposes the profession may have it backwards.  While it builds a case for the importance of client facing skills, it suggests those skills are best taught to planners who do not have a love, or even much of an interest, in the numbers.  Perhaps empowering financial planners to excel at what they love is the future of the financial planning career track, which may find planners practicing in teams of two:  a number facing planner and a client-facing planner. 

Rick offers a new model, Integrated Financial Planning that includes traditional financial planning, and adds financial coaching and financial therapy. The personality profiles of each position are examined with an emphasis on matching financial professionals to the appropriate position, rather than forcing them to acquire skills in areas that are not, and never will be, their unique genius.

In this model, the client is fully served by a “full brain” that is, a planner who is an expert in client communications that can assist the client in behavioral change, and a planner that is an expert on all the financial and numerical parts of the financial plan, who lays out the case for behavioral change.