Incorporating Theory and Practice into Study Groups

Journal of Financial Planning: December 2017


Margaret (Peggy) Doviak, Ph.D., CFP®, is founder of D.M. Wealth Management Inc., a financial planning and portfolio management firm in Norman, Oklahoma. She is an associate graduate professor for the College for Financial Planning, a co-host of the FPA Theory in Practice Knowledge Circle, and author of 52 Things a Broker May Not Tell You.

Few financial planners really look forward to reading scholarly books or articles. The writing and topics can be complex, and our time is extremely limited as we juggle practice management tasks, investment research, client meetings, and marketing events. Additionally, we have the perpetual task of explaining to clients the financial planning process and profession in a landscape of blurred distinctions in designations and business models. Left to ourselves, the latest thoughts in financial planning often lie there, unread.

Sometimes, it’s easier to make time for reading research when we have some external motivation—people to whom we feel accountable. Many of us are members of study groups or “mastermind” groups, and this community can be a perfect home for a discussion on theory in practice. Even though these groups also address financial planning topics and practice management issues, they are a good place to share thoughts about recent scholarly books or journal articles.

Tips for Lively Discussions

If you drop the idea of adding a theoretical component to your study group, you may be greeted with as much enthusiasm as a root canal patient. But the topic doesn’t have to be boring. Approach the reading and discussing of research with the same guidelines as you would use if you were running a book club. Book clubs are fun, effective ways of turning nonreaders into readers, especially if the topic is interesting. Try following these book club tips to keep your research discussions lively:

Be serious about the topic but not the meeting format. People like book clubs because they often involve sitting in comfortable chairs, enjoying good food and perhaps adult beverages, and talking informally about a topic of mutual interest. Treat a study group session on research the same way. If it is a virtual meeting, skip the PowerPoint summary and encourage a relaxed atmosphere.

The amount of research you discuss in a year will be a function of how often your study group meets. If you meet monthly, you might consider having two to four meetings a year that include a research component. Although applying theory to your financial planning practice is an important part of a thriving financial planning profession, don’t let the inclusion of articles and books change the tone of your group. The research piece should remain interesting, not tedious.

Decide in advance who will host the research discussion. Choose a system where everyone in the group is part of the rotation. You can allow people to self-select the order, follow the alphabet, or draw names out of a hat. The important part is being sure that everyone is included.

Once the host is selected, he or she should choose three research topics of interest that are discussed in either recent publications or influential works. For example, you could choose something new from the Journal or The New York Times bestseller list, or you could choose a classic like A Random Walk Down Wall Street. Ideally, you want to offer choices that most of the group has not previously read. Then, send a survey to the study group to poll their interests. Select what you will read well in advance of the meeting, so everyone has time. Book club meetings are least effective when most of the group hasn’t had time to read or isn’t interested in the selection.

Conversation Starters

Books often have book club kits available through the library with questions to encourage discussion. Of course, these don’t exist for most financial planning research books and articles, so after reviewing several of these kits, here are 10 conversation starters:

  1. Who is the author? Does the author’s background give him or her credibility?
  2. Does the title make you want to read the book or article? Was it reflective of the content?
  3. What motivated the author to write the piece? Do you share the author’s concern, and is it a significant component of your practice?
  4. What assumptions has the author made? Do you believe the author understands differing client circumstances and needs?
  5. What behaviors or beliefs do you believe the author wants you to take from the work? Was the author successful in persuading you? Describe one concrete change you will make or describe a current practice that was confirmed.
  6. Did the author support his or her ideas with data? Was that data significant and compelling to you?
  7. Were the conclusions made by the author a logical outcome of the data provided?
  8. Were parts of the book or article confusing? Was the confusion a result of insufficient support from the author, or was it a lack of background in the research on your part?
  9. Would this be a book or article you would recommend to clients?
  10. Did you enjoy the book or article? Was it easy to read? Would you seek out additional research from this author?

You don’t need to answer all these questions to have an interesting discussion, although you certainly could. Someone in the group may have a different question or concern that should be addressed before your group uses these prompts. You are trying to create a conversation and analysis that will greatly increase the probability that the research is remembered and applied.

Rather than seeing the reading of research as a lonely, isolated (dare I say dull) task, turn it into a community event that encourages lively discussions. Add a research component to your study group, or if you don’t have one, form a study group or financial planning book club. For research to become an integrated part of your financial planning practice, it needs to be organic and useful.

General Financial Planning Principles