A recent common refrain at conferences is that when done best, financial planning is a process, not an event – meaning that financial planning is not about delivering “THE plan” at the end, but about the ongoing process of continually aligning money with goals as life and circumstances continually change. In turn, this implies that the value of financial planning will be rooted in the ongoing experience that the client has while engaging in the planning process. But how good is that experience, recently? Perhaps not so great… as one researcher’s recent focus group described financial planning as feeling “like a mix between a dental visit, math class, and marriage therapy.” Ouch.
The inspiration for today’s blog post comes from a tweet from the 2011 FPA Retreat conference – a comment utterly by Dr. David Lazenby of ScenarioNow, who said “Why do we make financial planning like a dental visit, math class, and marriage therapy combined? We need a better experience” during his session “21st Century Psychology Meets The Financial Planning Process” where he was referring to the results of a recent focus group he had conducted regarding the financial planning experience.
The parallels do seem clear. Financial planning has a lot of unfortunate parallels to a dental visit, as we provide preventative maintenance to clients that is not always very comfortable or pleasant, while chiding them for bad habits they still need to improve upon. At the same time, it IS often like a math class for many clients, who are often not nearly as well trained in basic mathematics as the average planner; how often are we unwittingly talking far over our clients’ heads about mathematics and numbers they don’t follow and understand? And on top of it all, we bring out the money dynamics that often exist between couples, unearthing sometimes uncomfortable issues and challenges for the couple and then trying to help them through it.
I think many planners would be shocked by such an assessment of financial planning from the client’s perspective. Yet at the same time, an astounding number of planners have never actually been through the financial planning process administered by another planner, to experience the reality first-hand. And why haven’t we been through the financial planning process with each other? As Rick Kahler‘s 2008 award-winning paper pointed out – the reasons are virtually all the same ones our prospective clients give! What does it say about us when we claim the financial planning process is such a positive experience, and so valuable, when we won’t engage in it ourselves?
Maybe it’s time to better reflect on what the financial planning experience must feel like for a client (or better yet, go through it ourselves!), from the moment we awkwardly ask our clients to get (financially) naked with us, to the way we try to help our clients change their (financial) habits, to whether we’re talking to our clients or talk math over their heads, to the sometimes difficult conversations we unwittingly inspire between couples who are going through the process and discover differences in their goals with and views about their money?
And this isn’t purely theoretical? I know prospects who have declined to go through the planning process because they were asked to share their most personal financial goals before they were comfortable in a trusting relationship with the planner. I’ve seen clients fire a financial planner because they felt pressured and judged for the way their planner “beat them up” about their bad financial habits. I’ve certainly seen a client’s eyes glaze over as the conversation passes the point of their mathematical comfort zone (which is often a much smaller zone than we realize!). And I know of more than one couple who decided to bail out of the financial planning process because they were very uncomfortable with the marital stress that the money conversations were creating, in part because they were not handled very well by the planner (although that’s not the excuse they gave the planner when they fired him, but that’s a conversation for another time!). Think about prospects that haven’t become clients, or clients that aren’t clicking well with you, or perhaps former clients who left; is it possible some of these dynamics were in play?
So what do you think? Are there things we could be doing to make some of these difficult conversations and personal changes more comfortable and effective for clients, and less like dental visits, math class, and marriage therapy? Is this a fair characterization of financial planning from a client’s perspective? If you said “no” – are you sure? What can be done to actually make the process of financial planning itself a more enjoyable experience?