The first time I came across proper Financial Planning was when I was working for Lincoln National, training financial salespeople to pass FPC and Advanced FCP exams. I’d taken all the exams that CII had available for financial advisers and, looking around for something more, I came across the Institute of Financial Planning. The IFP offered the internationally recognised Certified Financial PlannerTM licence and a Fellowship exam that, with four 3 hour papers taken over two days, was the most serious exam I’d taken since my Finals. This would have been around 1997 and I came away determined to become a financial planner.
At the time the financial landscape was dominated by commission earning salespeople, whether working for direct salesforces, tied agents or theoretically independent. To discover that there was an organization out there promoting proper fee-based, independent, professional financial planning, producing plans with cashflow forecasts and being paid fees by their clients because what they did added value rather than commission by a product provider to reward the sale of a product, was a game changer for me.
These days the IFP is now part of the Chartered Institute for Securities and Investments (“CISI”). It never really achieved critical mass, as most advisers took the easier route with the Chartered Insurance Institute and their financial adviser arms, first SOFA and now the Personal Finance Society (“PFS”). Commission based selling/advice remained the main way that advisers worked for many years after the demise of the big provider salesforces and proper fee based financial planning continued to be in the minority until the regulator began to take action and insist at least on banning commission and moving the rest over to the client agreed fee route.
How far things have moved and whether they have moved far enough is open to debate, and there is plenty of debate around if you were unable to get to sleep one night and took a wander though social media ! To keep things moving in the right direction however, each year the CISI runs Financial Planning Week, a nationwide public outreach campaign to promote financial literacy, spread awareness of the benefits of financial planning and encourage people to take control of their finances. During FP Week financial planners team up with the CISI to promote financial planning and offer free financial planning “taster” meetings to allow people to experience the difference that financial planning can make.
I was reminded recently of a couple of ways that it can make a difference. One was a client who told me that they remembered years ago I had suggested that if the show they wanted to see was only on in Broadway, then why not go to Broadway to see it. It was affordable and it was about what their money could do for them and not just about having money. Another reminded me that when their investments plummeted as Covid struck, I was the quiet voice of reason saying not to act rashly and to remember what the plan was and that we’d always said this sort of thing would happen, and it had. So they didn’t sell out in a panic and they focussed on their family and their health and let investment markets do what investment markets do.
Financial planning is not about someone telling you how great they are at investing people’s money and how they’re repositioning for a post-Trumpian bounce (or whatever waffle they think sounds intelligent), it’s about understanding what matters to people, how what they have can be used for what matters and guiding and coaching people through life to give them the best chance of achieving what they want to achieve.
Having been involved in FP Week for many years with my previous firm, I am pleased to be able to be involved again this year through Pelican.
As part of this we will be offering free introductory financial planning meetings as I have done before and the purpose of these is to demonstrate to people how financial planning could benefit them. Planners are encouraged to give back to their community by focussing on showing people what financial planning is all about and empowering them to get involved in their own financial planning rather than focussing on getting new clients for their own businesses.
The CISI Wayfinder website https://financialplanning.cisi.org/cisiweb2/wayfinder/home has a directory of financial planning firms that are supporting this initiative and I’d encourage anyone who isn’t sure what financial planning really is and what it can do for you to check out the firms in their area and give it a try.
