As financial planning fights for its standing as a full-fledged profession, we try to demonstrate its core value to society - that going through the financial planning process has a positive impact on achieving a client's goals. Yet for all we proclaim about our beliefs in the value of financial planning, why is it that virtually none of us think financial planning is valuable enough to pay for it ourselves?
The inspiration for today's blog post comes from a surprising announcement that came across my Twitter feed yesterday from financial planner Rick Kahler, which said in part: "Cancelled my #NAPFA webinar on Thu[rsday] regarding the need for a financial planner to have a planner. No financial planners signed up!" (Full text here)
Commenting on the importance of financial planners having a financial planner is not new ground for Rick, who won the 2008 Financial Frontiers Award for his article "Becoming Consumers of the Profession We Practice" in the Journal of Financial Planning. Yet there is no small amount of irony that the planning community (of NAPFA, at least) was not willing to sign up to hear him discuss the subject, given the incredibly salient point he delivers so well in the closing paragraph of his article:
"When you have a financial planner, it means you believe in your own profession so strongly that you choose to be a consumer of it as well as a practitioner. If we are to realize our dream of becoming recognized by the mainstream as a profession, one of the next steps will be to totally embrace that profession ourselves by becoming consumers of the service we so passionately practice." - Kahler
Few would question the passion that NAPFA planners have for delivering the value of financial planning, and the point of this post is not to criticize NAPFA planners directly for their unwillingness to sign up for Rick's session. The point is broader than that. The point is that for all we proclaim about the importance of planning and its value - in response the perennial client objections "I can do it myself" and "The fees are too high/not worth the value" - it appears that we ourselves still have the exact same objections when considering a planner (and this is well supported in Rick's own research as he discusses in the aforementioned article).
I will grant that there are many legitimate objections and concerns about working with a financial planner when you are a financial planner, and planner-to-planner relationships have some unique concerns above and beyond the typical client-planner scenario. Rick discusses these issues and concerns extensively in his article (yes, this is the third time I'm telling you that you need to read the article!). But the fundamental point still remains: if we really believe that a financial planner provides value, and especially that the financial planning process serves a purpose that is beyond just the collection of technical information used to deliver advice, then why can't we put our money where our mouths are and be financial planners who hire other financial planners to serve our own needs. It's certainly a common model for other established professions; most have heard the quip "A man who is his own lawyer has a fool for a client." Will there be a day when we say the same thing about financial planners, too? Or worse: has that day already come, and we just haven't realized it yet?
I must confess that notwithstanding this discussion, I too am guilty of this same sin of hypocrisy - I do not have a financial planner myself. But I have to admit, I am increasingly persuaded of its importance as I reflect on my own life, and especially now that I am married and must navigate not only my own financial life but the development and pursuit of joint goals with my wife as well. I think our own time as a couple in need of a[n outside] financial planner has come.
And who knows... perhaps over time the planner-to-planner professional will become a niche of its own in our planning world; I know that Rick is already going down that road. Maybe I need to give him a call...