Industry Trends - Customer Confusion! What is Financial Planning? (FPW)

Customer Confusion! What is Financial Planning?
While the origin of financial planning can be traced back to 1969, many customers are still very confused about what financial planning really entails. Why is there confusion? Are customers not savvy enough to understand? Or do the securities and insurance industries send confusing messages?

According to the College for Financial Planning TM, financial planning is a process focused on clients’ goals and concerns. The disciplines cover retirement planning, investment planning, protection planning (LTC, life, disability, medical, P & C etc.), income tax planning, college planning, cash flow management, business planning, estate planning, etc. This dynamic process should be advice, not product, driven. Many times, products are part of the advice, but products cannot drive the process. In its truest form this take a lot of time which is a roadblock both to consumers and financial planning practitioners. Another roadblock can be human resource cost to get the work done. Also, there are institutions that allow their representatives to do some planning (ex. Retirement planning) to focus on investment management but disallow other financial planning assistance. In some cases, the advisor simply lacks the competency required to advise.
Why don’t more customers demand this? While no one can truly know this answer, it may be they truly do not know what financial planning really means until they experience it. Some probably believe investment management constitutes financial planning.

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