Journal of Financial Planning: March 2018
Lewis J. Walker, CFP®, CRC®, graduated with the third class from the College for Financial Planning in 1975. He is a past national president of the ICFP and a longtime contributor to the Journal. He is the recipient of the 2002 FPA of Georgia HONORS award and the 2011 P. Kemp Fain Jr. award. He recently transitioned his practice into a growing ensemble practice and continues to be active in the profession.
Steve jobs observed, “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.” We might thank William Shakespeare for that idea. In Act II, Scene I of The Tempest, the evil Sebastian uttered, “What’s past is prologue.” What Jobs and the Bard of Avon are saying is that what has happened up until now only sets the stage for the future. We have to see the patterns, understand the lessons of the past, and build the future—individually and as a professional community—as we connect the dots.
On December 12, 1969, a group of 13 financial services industry leaders gathered in Chicago under the leadership of Loren Dunton. At that time, financial services was largely in silos; securities and stock brokerage in one, insurance in another, banking in another. Dunton was a successful salesman of tangibles like silverware and books. Looking back at his own finances, he wished he had had objective advice about his money. He had never sold a financial product, but he was an experienced sales motivator. He had trained others to sell based on benefits tailored to the specific customer’s needs. Why couldn’t “needs-based advice” be applied to financial services in a professional manner?
While traveling on sabbatical around the world with his family, having cashed in life insurance to pay for the trip, Dunton was asked about the prosperity of America and why our people were so dependent on governmental bureaucracy and Social Security for their retirement security. Good question, he thought. In the 1983 book, Your Book of Financial Planning, which Dunton compiled and edited, he looked back at his personal money mistakes. Rather than buying life insurance from one salesman, mutual funds from another, and a “hot stock” from a broker, none of which worked out very well, he said, “How I wish now ... that someone had been there to give me more objective advice.”
Loren Dunton never was a financial planner, but he had an early vision of what we could be. The Chicago meeting gave birth to the International College for Financial Counseling, which was to have a membership arm and an educational arm. In 1970 a five-course curriculum was created, and that fall new names were assigned to two distinct entities—the College for Financial Planning and the International Association for Financial Planning (IAFP).
In 1973, 35 graduates from the College for Financial Planning became the first Certified Financial Planners in the world. That group formed an alumni association, the Institute for Certified Financial Planners (ICFP), open only to CFP® practitioners. The IAFP was open to anyone in financial services. Many CFP® practitioners were members of both organizations.
A Eureka Moment
In 1973, this writer was selling private placement real estate investments purely on commission in Atlanta, Georgia. I had been an Air Force officer, a Vietnam veteran, and had obtained a MBA in marketing from Northwestern University on the GI Bill. Prior to moving into financial services in the early 1970s, I had worked for two airlines in sales and marketing. Somehow I learned about the first graduates from the College for Financial Planning and a new study group that had been formed in Atlanta to prepare for the CFP® certification exam. Intrigued, I joined the group.
My first thought was, “Wow, financial planning has to be the sales tool of the century!” (Well, that was the last century, after all.) But as I studied, I realized that wasn’t it at all. Instead of working for a big company (a stock brokerage firm, insurance company, or bank) and setting out to sell their products, this was about talking to people about their needs, concerns, fears, and aspirations. It was about them, their family, their business or profession; their future. It was about a plan, not a one-off sale. It was about ongoing consulting and advice framed in their best interest, not that of an employer. That was a revolutionary idea in 1975 when I graduated in the third class from the College for Financial Planning.
Loren Dunton passed away March 21, 1997. We owe him a debt for his prescience. I had the pleasure of meeting him personally several times over the years. Between 1973 and 1975 as I studied for the CFP® exam, what I learned changed my life. I founded my financial planning practice in 1976. Many of the early pioneers are gone now, but their legacy lives on.
Growing Pains
When I teamed up with my insurance agent to form the first of what would be three different firms over more than 40 years of practice, I was just one of those dots that Steve Jobs talked about. An entrepreneur has been defined as “someone who doesn’t know when they’re taking a risk.” Those that formed independent financial planning firms in the 1970s were taking a risk. To consumers, financial planning was a new idea. The CFP® designation was a new idea.
Opening an office, paying rent, buying furniture, hiring staff, and going forth with a new idea to build a client base was a classic case of entrepreneurial risk-taking with a strong dose of chutzpah. You had to be a damned good salesperson. You had to sell yourself, sell an idea, and sell products to survive. The risk-takers—yes, the pioneers of the 1970s and early 80s—are now those aging practitioners with years of wisdom between their ears, retired or on the cusp of doing so. In the beginning it was survival. Now it’s succession. Our profession is coming of age.
Just as early practitioners struggled for success and survival, so did the IAFP and the ICFP. In 2000, the organizations joined together to form the Financial Planning Association, which now has a membership of roughly 22,500, of which about 16,500 are CFP® professionals. According to CFP Board, there are now 80,035 Certified Financial Planner professionals in the U.S. And, there are now 26 CFP® certification programs worldwide. Professional, client-centric, needs-based, dream-based, and fiduciary-based advice is of universal importance.
Just as there is not just one law school, accounting school, or medical school in the U.S., it was recognized that there must be more than one educational institution teaching the precepts of financial planning. In 1985 a new non-profit certifying body was formed, the International Board of Standards and Practices for Certified Financial Planners (IBCFP). In 1994, the IBCFP was renamed Certified Financial Planner Board of Standards Inc., currently referred to as CFP Board. Practitioners now had a set of ethical standards to live by, guidelines for “financial planning done right.”
A number of colleges and universities such as Texas Tech taught budgeting and other financial matters as part of the home economics curriculum, the seed corn for the financial planning studies of today. With CFP Board as the certifying body for the CFP® designation and its educational component, CFP Board registered financial planning courses are now taught at more than 200 institutions nationwide. Certificate, bachelor, master, and Ph.D. programs are offered.
Riding the Tiger
The Chinese have a proverb: “He who rides a tiger is afraid to dismount.” The early entrepreneurs, volunteers, board members, and members of nascent organizations like the IAFP and ICFP had a tiger to ride. While difficult and challenging at times, financial planning was an idea that should not be abandoned. While many did dismount, others stuck with it, building what was to become a profession.
In 1987, P. Kemp Fain Jr., a member of the first graduating class of 1973 from the College for Financial Planning, published a white paper commonly referred to as, “One Profession, One Designation.” Kemp envisioned the CFP® designation as the hallmark, the one mark that would represent professionalism in financial planning, similar to the way CPA is respected in accounting. In 1993, the ICFP established the P. Kemp Fain Jr. award. Presented annually, this award is the pinnacle of recognition, honoring one exceptional individual who has made outstanding contributions to the financial planning profession. Kemp Fain was the first honoree shortly before his 1994 death from cancer, and the award continues to be granted each year by FPA.
In some ways, you can track the development of our profession based on economic cycles and advancements in technology. In the 1970s, the country experienced significant increases in interest rates and inflation, with a top marginal tax rate of 70 percent. There was a big focus on tax planning and tax shelters. The U.S. prime lending rate peaked in December 1980 at 21.50 percent.
Every decade has a series of crises that increase the anxieties of clients and investors. One of our strengths is the ability to talk people off the ledge. We had the oil crisis of 1973 and the 1979 energy crisis (remember peak oil fears?), plus “stagflation,” a new word coined by confounded economists who could not understand how we could have rising inflation and a stagnating economy at the same time. Newly designated financial planners had to learn how to plan our way through crises, maintaining our practices while delivering calming and practical advice to worried clients. These were personal relationship skills that could not be learned in a classroom.
Ronald Reagan took office in 1981 as the 40th president of the U.S. He and Federal Reserve Chairman Paul Volcker instituted a tight money policy so as to break the back of inflation. A nasty recession lasted from July 1981 to the end of 1982, with unemployment jumping to 11 percent. Peak-to-trough, the Dow Jones Industrial Average lost 24.2 percent of its value—at that time, the worst bear market bite since the Great Depression. The turbulent 1970s provided valuable tough-love lessons for planners.
The August 13, 1979, BusinessWeek magazine’s cover story declared, “The Death of Equities: How inflation is destroying the stock market.” Many clients bailed out of stocks and mutual funds from 1979 to 1982, impacting the revenues of planners and asset managers. They were slow to get back in as a multi-generational bull market ensued in 1983 as interest rates and inflation rates declined. Planners and clients were learning to take the long view and have strategies to ride though economic cycles.
The 1980s brought more changes. Congress passed the Tax Reform Act of 1986, which simplified the income tax code, lowered rates, broadened the tax base, and eliminated many tax shelters that were the rage in the 1970s and early 1980s. Many limited partnerships collapsed or underperformed. Failed exotic shelters designed to produce tax write-offs of up to 4 to 1 produced lingering pain, and many salespeople who were not really practicing financial planning left the industry. Inflation hedges such as artwork, rare coins, and gemstones faded into the embarrassments of history. Some financial advisers and early leaders went to jail charged with fraud. We had our black sheep. Lessons learned.
Experience taught us that markets go through bull and bear cycles, energy problems, war, and global turmoil. We had to develop strategies to define risk tolerance, liquidity needs, debt management, and clients dealing with their specific challenges and opportunities. Those who stuck with it in the first 25 years of growing pains from 1973 to 1998 were wiser and more empathetic advisers as we approached a new millennium.
Financial Life Planning and AUM
Over time, commissions on mutual fund sales were declining as no-load mutual funds rose to the fore and trading platforms were created. At one time, it was very hard to move from one mutual fund provider to another. Commissions on stock trades were under pressure. Was there an alternative to commissions?
In the early 1980s, E.F. Hutton introduced the first asset-based fees and wrap fees in lieu of commissions. The initial fees were as high as 3 percent annually based on the value of the portfolio. Fees have come down over time and now are 1 percent or less. The Hutton innovation precipitated a move toward “assets under management” (AUM), and the late 1980s and 1990s saw the birth of providers such as Lockwood (now part of Pershing) designed to service independent financial advisers looking for fee-based separate account money managers. This spurred transitions to an AUM/registered investment adviser (RIA)/independent advisory representative (IAR) business model, as many advisers moved from pure commissions to a largely fee-based hybrid model.
We also saw the introduction of fee-only advisory networks. The National Association of Personal Financial Advisors (NAPFA), now a community of roughly 3,000 fee-only practitioners, was founded in 1983.
We were searching for better ways to oversee asset management on behalf of clients. Roger C. Gibson, CFA, was a popular speaker at IAFP and ICFP meetings on the subject of asset allocation and diversification. His well-attended presentations resulted in the 1989 book, Asset Allocation: Balancing Financial Risk, now in its fifth printing. Asset allocation became a key aspect of money management disciplines as part of our value proposition.
Fees for pure financial planning rose in popularity in the 1980s and 1990s. In the January 1990 issue of the Journal, Richard (Dick) Wagner, J.D., CFP®, published his seminal essay, “To Think ... Like a CFP.” Looking back at some of the wild, wild west aspects of the ’70s and ’80s, Wagner rejected those who saw financial planning as a “tax-shelter” or “product delivery system.” He called for “principles over apparent self-interest,” urging our community to develop basic financial planning theory to become recognized as an essential profession. “The essence of financial planning,” he said, “is not finding a product to best fit the client’s needs. The essence is to provide answers and services within the context of the client’s own special situation.” Sadly, we lost Dick Wagner at age 68 on March 28, 2017 due to injuries suffered in a fall.
At about the same time that Wagner urged us to think like professionals, another pioneering thinker and adviser, George Kinder, was a popular speaker. In fact, Wagner and Kinder did a joint presentation at the 1994 ICFP Retreat that became a catalyst for the financial life planning movement. In his talks, Kinder urged planners to move beyond the numbers and address the goals and values of the client. He noted on his site, kinderinstitute.com, that life planning “focuses on the human side of financial planning. In life planning, we discover a client’s deepest and most profound goals through a process of structured and non-judgmental inquiry. Then, using a mix of professional and advanced relationship skills (emphasis mine), we inspire clients to pursue their aspirations, discuss and resolve obstacles, create a concrete financial plan, and provide ongoing guidance as clients accomplish their objectives.” Call it “life planning” or “financial life planning,” we owe a debt to Wagner and Kinder for deftly defining what is, in its essence, a call to think and act like a fiduciary.
Enter the 21st Century
The new century dawned on January 1, 2001, as planners and clients were working their way through the dot-com bubble and the dot-com market crash. Between 2000 and 2002, even established companies like Cisco, which saw its stock price erode by 86 percent, lost value and many companies and red-hot technology mutual funds melted down and failed. Technology was growing in its impact and methods of practice for financial planners.
The first class of CFP® practitioners graduated from the College in 1973 B.C.—before computers. The millennials, who are the advisers and heirs of our future, cannot imagine life without a tablet and a smart phone. The ARPANET was created in 1969 when researchers began to assemble a network of networks, the forerunner to the modern internet. Technology took a leap in the late 80s when computer scientist Tim Berners-Lee’s inventions gave rise to the World Wide Web as we know it today. I do remember that the first computer system installed in my office was an expensive, hard-to-use, frustrating boat anchor. How many remember the annoying screeching tone from the dial-up modem as we attempted to connect to AOL? These were the early tools that would alter our world.
In the early 1970s, salespeople controlled information, by and large. If you wanted to know about stocks or bonds or buy securities you called a stockbroker. If you needed life, disability, health, or liability insurance you called a licensed insurance broker. If you wanted a car you went to a showroom and talked to a commissioned salesperson.
In 1984 the now-billionaire entrepreneur Joe Mansueto founded Morningstar out of his home in Chicago with $80,000 in start-up money. Morningstar’s subscription-based investment and mutual fund research gave financial planners a leg up in providing guidance to clients. Now, much of that information is available for free on the internet. You no longer need to talk to anyone to buy a financial or consumer product. Research and consumer ratings are a free click away. Buying is a click away.
We no longer provide as much value as providers of information, per se. The good news is that we do provide value in knowing what to do with information, in knowing how to apply it to the client’s unique needs, of how to blend what’s new or what should or could be, with “what is.” When you query Alexa or Siri or type a keyword into a search engine, you may or may not find exactly what you are looking for. The point is, you have to know what you are looking for. What’s missing is the thrill of discovery that we once experienced wandering around the stacks of a library.
There’s an old question: “If you had a 1,000 piece picture puzzle with the pieces dumped on a large table in a disorganized pile, what is the most important part of that puzzle?” Most people say the corner pieces or the edge pieces. The real answer is, “The picture of the puzzle on the top of the box!”
Planners facilitate the process of discovery by asking questions. While many clients are lost in a forest of too much information and inertia-killing “too many possibilities,” we help construct the picture on the box. The information overload and human emotions are our best friends as we look forward to the next 45 years.
Search for Blue Butterflies
Carol Albert is a country girl from Hiram, Georgia, who has become an international jazz sensation. Her latest CD is Fly Away Butterfly. After her young husband died suddenly from a heart attack while running a marathon in 2014, she said she kept seeing butterflies and they became a symbol of hope. On a subsequent hiking trip in the mountains of Costa Rica, a blue morpho butterfly landed on her. Searching for meaning, she found that butterflies, and blue butterflies in particular, are “symbolic of new beginnings, change and awakening, as well as being good luck and a spiritual messenger,” according to an article on TheCurrentHub.com.
Susan Bradley, CFP®, CeFT®, is a recognized thought leader in financial transitions planning. Founder of the Sudden Money Institute, she has created a community of practice based on her premise that when life changes, money changes. She also notes the opposite: when money changes, life changes.
Susan teaches Certified Financial Transitionists (CeFT®) that life transitions have four stages: (1) anticipation of change; (2) the ending of something (planned or unplanned); and a (3) passage to a (4) new normal. She is known for giving out butterfly pins to signify the process and tools to help advisers aid clients navigate major life transitions. Like Carol Albert, who as a young widow had to deal with the unanticipated death of her husband, the “passage” stage is fraught with a confusing array of possibilities, chaos, and fear.
Popular speaker and author Mitch Anthony has identified 62 life transitions or events that open the door for value-added guidance beyond, but not excluding, money. These transitions fall into the four major categories of (1) personal and family; (2) work and career; (3) financial and investment; and (4) community and charitable. Consider life transitions planning relative to the Age Wave, and creative thoughts are legion as we ponder the next 45 years.
The Age Wave and Major Life Transitions
Many of the founders of our profession, the thinkers and entrepreneurs who came out of the 1960s and 1970s, are gone now. They were members of the Silent Generation, born 1945 or before. Fortunately for us, they were not “silent” when advocating for a new profession based on client-centric sincerity, advocacy, and honesty—what is now defined as a fiduciary obligation. Those still with us and active are a treasure trove of “been there, done that” experience.
The baby boomers were born between 1946 and 1964. In 2018, the oldest boomer will be 72 years old; the youngest 54. Consider the transitions facing this massive population cohort. Clients in their 50s may still have children in the nest, with significant education and “Bank of Mom and Dad” expenses ahead of them. They face the deaths of parents, spouses, even children at times, sadly. Some are challenged with special needs minor or adult children or children who have lost their way and gone off the rails. Grandparents are raising grandchildren. They are dealing with illness and serious injury or disabilities, and long-term care needs for themselves or loved ones. They have career development or change-of-career challenges. They are planning for retirement or already trying to adjust to retirement, forced or voluntary. There’s the sale of major assets; downsizing. Succession planning and sale of business. Divorce. Remarriage. The list is long.
Forty-five years from 2018, the year 2063, the youngest boomer born in 1964 will be age 99, and some are likely to still be with us, perhaps living in Del Boca Vista of Seinfeld fame. The U.S. Census Bureau in 2016 indicated that 74.1 million boomers were still alive in the U.S, almost 23 percent of the population. That’s a lot of life transitions as grist for our value-added advisory services over the next 45 years!
Generation X, born between 1965 and 1976, is estimated at 65.72 million strong, a smaller cohort than the boomers. That means less people to buy the boomer’s toys, including second homes, boats, and motorcycles. Fewer entrepreneurs to buy existing businesses or start new ones. Fewer people to become advisers and heirs to maturing practices. Fewer people to provide care for aging loved ones. In 2063 the oldest Gen-Xer will be 98, the youngest, 87. Again, that’s a lot of major transitions for millennial planners to deal with.
The millennials, born between 1977 and 1995, are entering our practices in increasing numbers. Many are graduates of the colleges and universities teaching financial disciplines. A population of 79.41 million, they are often called “echo boomers,” as Gen X finds themselves sandwiched between the two larger population cohorts. With the youngest millennial age 23 in 2018, and the oldest 41, they have not yet experienced many of the life transitions older advisers have lived through, either personally or with clients. Wisdom and conversational adroitness will have to be learned over time and taught by more experienced advisers.
Gen X and the millennials are busy raising Generation Z, born 1999 to 2015, a cohort estimated at over 60 million. In a September 2015 New York Times story, Lucie Greene, the worldwide director of the Innovation Group at J. Walter Thompson, called them “millennials on steroids.” The article quoted Hannah Payne, age 18, a UCLA student and lifestyle blogger, who boasted, “I can almost simultaneously create a document, edit it, post a photo on Instagram and talk on the phone, all from the user-friendly interface of my iPhone.”
While having tech-savvy employees and associates in our practices going forward will be de rigueur, there will be people management challenges for the older generations dealing with millennials and Gen Z. Hannah Payne says in the New York Times article, “Generation Z takes in information instantaneously, and loses interest just as fast.”
Of the 80,035 CFP® professionals registered with CFP Board, almost half, about 48 percent, are age 50 or older, and about 23 percent are age 60 or older. That means a lot of potential retirements, succession plans made and executed, and practices transitioning in the next 20 years. We preach “life transitions planning.” Have we done it for ourselves?
Of the noted CFP® certificant population, 77 percent are male, 23 percent female. Going forward we will see the ratios shift as more female advisers enter our profession.
Re-engineering Human Capital
In the next 45 years, the management of human capital and the strengthening of individual and team potential will be as important as the management of financial capital and the efficient use of financial resources. Every generation is challenged with understanding the generations that follow. Teenagers in the late 50s were told that Elvis Presley and rock ‘n roll was “the spawn of the devil.” Boomers have difficulty at times understanding Gen X. Gen X is buffaloed by the millennials. The millennials will have to deal with the bright young Generation Z Hannah Payne’s of this world as they enter practices and are groomed for advanced advisory work.
Take for example a fascination for technology. We hear comments that some younger planners would prefer to send a text or email rather than pick up the phone. While FaceTime, Skype, and GoToMeeting serve a purpose, meaningful in-depth conversations and holistic fact finding take place face-to-face, not in cyberspace.
We are seeing a shift in how financial planning practices are organized. The early practices circa the mid-70s and the 1980s often were solo practitioners, a single planner with a staff person, or a silo practice, where two or more planners joined forces to share office space and staff. Each, however, was responsible for his or her own marketing and client development and retention. As these practices and owners age, they are being acquired and merged into larger practices, increasingly organized as an ensemble practice.
An ensemble firm is defined by ensemblepractice.com as “a multi-professional, team-based firm that operates as a sustainable business with a clear vision of shared stewardship of client relationships. Growth creates opportunity and opportunity attracts talented people. By adopting a team-based approach, ensemble firms grow faster, achieve greater profitability, create more opportunity, and have real equity value.”
Compare the ensemble concept to the typical lifestyle business. A lifestyle practice typically is run by founders usually aimed at generating particular levels of income while maximizing benefits and tax-deductions to the owners. It is designed to support a particular lifestyle, for example, country club memberships that the golf-loving owner uses to schmooze potential clients and friends. These firms are heavily dependent on founder or owner skills, personality, and contacts. The problem here is that when it is time to transition or sell a lifestyle business, the enterprise value is not there.
This challenge will multiply as the Age Wave rolls on, not only impacting financial planning firms, but closely held businesses at large. This is a major opportunity for advisers. Many entrepreneurs do not understand accounting. They may have a bookkeeper or an external accountant, but they rarely take a deep dive into the business. They know what comes in and they know what they get to keep, before, and sometimes, after taxes. But when it comes to building true and transferable enterprise value, they need help.
A typical gung-ho energetic entrepreneur often is a force to be reckoned with and is not a team-builder. He or she often will say, “I brought this individual in to be my right-hand person, or my successor, but it did not work out.” Effective team building, the fabric that holds a dynamic ensemble enterprise together, has to be learned. This is the human capital challenge of the next 45 years, and a rewarding consulting and marketing opportunity.
A number of advisers are using diagnostics like Kolbe® or Gallup StrengthsFinder® or other assessments, often working with outside experts, to help advisers and other business owners find and retain the right people, not just for a job, but for the right role. You have to have a clear and defined mission and vision shared by all. More important, you have to have a well-thought-out mission and vision for each team member. How does he or she fit the envisioned role? How does he or she fit in and complement the strengths of the team? Consultant Maria C. Forbes, founder of FIREPOWER Teams, asks, “You may have a job description. Do you have a role description?” Going forward, owners will have to run ensemble teams like a real business, with human capital resources and financial tools and processes that build enterprise value.
The Development Challenge
The 2017 InvestmentNews Adviser Compensation and Staffing Study of 353 advisory firms showed that “ongoing staff development is often lacking or woefully inadequate.” Of the firms surveyed, only half had formal training or an education structure for developing the client services skills of staff. A third had no business development programs in place, and less than 30 percent offered formal leadership training for advisers.
The millennials, in particular, crave mentoring. They don’t want a boss, they want a coach. They keep in touch on social media and in a sense, are always looking for the next gig. Maria Forbes has developed an in-depth on-boarding program and ongoing career development track for new employees and advisers-to-be, tailored to the specific talents and strengths of the associate and the well-defined role that person is suited to play within the team dynamic. She also has a “re-boarding program” for established and valued employees or associates who may be in the wrong role. Going forward, we can expect increased use by growing entrepreneurial firms of outside consultants and coaches on the human capital and employee engagement side of the equation.
The early pioneers were largely “jacks-of-all-trades.” As time went on and firms grew, different members of the firm moved toward more specialized roles. This trend will continue, with emphasis on matching the right person with the right role. Gallup has identified 34 talent themes that can be grouped under four strengths domains. A Strength=Talent+Knowlege+Skill, a formula for human capital success.
When you as a leader in a growing company are dealing with a new or current employee and/or advisory associate, how do you think about how his or her talents help him or her to execute and take action, influence others, build relationships, and absorb and think about information? How does that person fit into Gallup’s “executing” domain, the “influencing” domain, “relationship building” and “strategic thinking” domains? How do a person’s specific strengths or lack thereof impact a specific team’s dynamic and goal actualization? The hit-or-miss employee recruiting and development tactics of the past will not work in the increasingly competitive and wired world of the next 45 years.
Welcome to 2063
The opening sessions of the annual gathering of the Financial Planning Association, this year in Ljubljana, Slovenia, have just concluded and you have joined colleagues from around the world at the opening cocktail party. A retrospective film about the first 90 years dating to the first class from the College for Financial Planning in 1973 has shown you how far we have come, even as we look forward to the Centennial Celebration in 2073 in Seoul, capital of the unified Korean Peninsula. You have been talking with eager students from Universidad de Oriente Santiago de Cuba. Financial planning courses have become increasingly popular in Cuba after the Communist dictatorship fell apart in 2029. Courses are now taught all over the free world in local languages as well as English. Financial planning and freedom go together, individually and collectively.
The FPA membership has become so large and diverse that retreats are held eight times a year in locations north and south of the equator taking advantage of scenery and climate conducive to sightseeing, leisure, and sports interests catering to work-life balance philosophies. Major universities and non-governmental organizations host symposiums throughout the year to bring leading financial planners together with other experts to solve global and local problems and challenges. Financial planning is well-recognized as vital to the financial security and happiness of individuals and society at large. The Certified Financial Planner designation is globally respected as a foundational hallmark of reliable financial planning advice and counseling.
The fiduciary “controversies” of the past are behind us, as all CFP® practitioners operate as fiduciaries. Taking a cue from CFP Board, in 2020 the U.S. Securities and Exchange Commission moved to require all those providing advisory services to act as fiduciaries. The SEC recognized that “best interest” could not be defined by outcomes that an adviser could not control such as the rise and fall of stock and bond markets or interest rates or the onset of recessions, etc. Planners were shielded from frivolous lawsuits and class actions, while still providing for consumer relief from rogue practitioners and fraudsters. “Crowd-sourcing” technology made it easier and quicker to spot abuses. We have learned to document “best interest” recommendations by conducting deep conversations, holistic fact finding, and written histories of all communications and recommended actions, building on the financial life planning and behavioral finance precepts pioneered by leaders back in the 1980s and 1990s. Financial planning is now a recognized profession along the lines of medicine, law, and accounting.
As a member of the FPA Board of Directors, you recognize the value of local and global community, of involvement, engagement, and leadership in building our profession into what it has become, “to think...like a CFP.”
Raising a toast to a fellow board member from Brazil, you exclaim, “Saúde,” looking forward to the next 45 years and a new century. In 2108, you are sure that those to come will look back fondly and feel as you do today: the possibilities are endless!
Learn More:
For a deep dive into the past, present, and future of the profession, join Lewis Walker at FPA Retreat, April 23-26, when he and fellow financial planning profession founders Ben Coombs, John Blankinship, and Charlie Hughes will share their wisdom and insights.
Maria Forbes of FIREPOWER Teams, mentioned in this thought leadership piece, will also present a session on workforce continuity and practice sustainability. Learn more at FPARetreat.org.