As financial advisors, we like to think of financial planning as a series of discrete practices woven together—like budgeting, investment planning, insurance planning, retirement planning, estate planning, education planning, etc. But I don’t think that’s how non-advisors, and our clients, really see it.
Consider for a moment: What are the typical triggers for someone reaching out to you? A new job, marriage, child, death, divorce, disability. Very few (real) people have an epiphany on a Sunday morning that their asset allocation is sub-optimal and Google: “financial advisor with expertise in modern portfolio theory”.
No, in the vast majority of cases, it’s life that precedes any interest in financial planning, and therefore, I submit that the optimal purpose of financial planning, through the lens of our clients, is to:
Help anticipate or prepare for, enjoy or endure, and reflect on or recover from life’s hoped for joys and inevitable struggles.
I wonder if this lens could even be used to translate the workflows of our labor? Think about it: Instead of “portfolio review” or “life insurance needs analysis,” we could be thinking in terms of life events and transitions, like “retirement readiness” or “starting a family,” and then it becomes our job to introduce the respective elements that would help our clients optimize their anticipation, joy, and reflection, rather than their portfolio…that would help them minimize their dread, doubt, and despair, rather than their risk exposure.
I think this more intentional, life-focused approach to our work brings more meaning to money management for us practitioners as well. But let me be clear, and this is a vitally important point: There’s a limit to the benefits financial planning can bring, either in the business of fulfillment maximization or disappointment minimization. There’s a lot of stuff in life that financial planning can’t prepare you for.
Yes, while having adequate life insurance can help eliminate excess suffering in the case of an untimely death thanks to the surplus liquidity, it can’t do anything to reduce the intense pain resulting from the loss of a loved one itself. Similarly, while setting aside savings for education or a wedding can eliminate the residual financial burdens associated with these huge leaps in life, that appreciation falls so far short of the inimitable joy of those initiations that it doesn’t even deserve comparison.
These unmatchable moments are those which financial planning simply can’t prepare anyone for. One of the great blessings of our work is that it necessarily brings us into close proximity with these moments, but our tools and techniques are powerless in the intensity of these experiences. So let’s carry ourselves with humility and employ the only appropriate tools, not of financial planning, but humanity: empathy, appreciation, presence, congratulation.
P.S. I am a firm believer that we absolutely (and perhaps especially financial advisors) need training in being better humans, and that it makes us better advisors. If you’re interested in referrals to some of these trainings, please reach out and I’ll be happy to give you a list of books and trainings.