Last week, there was a Financial Planning Association group discussion in which someone posed the question: “Why do people resist creating a formal financial plan”.
This is a great question and gets to the core of financial planning.
Many people do not know what financial planning is. I think many financial planners are still learning what it means to them. As the industry grows and comes to more of a collective view then this will help. Is the planner about achieving returns or helping a client achieve life and consequently financial goals? What role is the planner playing in the client's life?
Those who accept the planner as their financial life guide will more likely do a financial plan. Another key point is the person's level of personal trust. Do they have fears about planning and sharing themselves and getting help? Do they trust the planner? Both issues are at work.
I also find that if the planner is not a trusting person (and our research shows 70% are not) then this is not conducive to building relationships and getting planning commitment. The question of trust gets down to both a person's DNA behaviors and their life experience. The more the planner represents product and is not independent then trust will also be harder to build.
Ultimately, the more a planner seeks to know their client and make the client feel they are understood then the chances of getting the plan done increases. Further, retention will increase. The client is not a financial number but a person whose life constantly develops. |
