In the 1960s, and prior to that, financial advice, such as it was, came largely from purveyors of products such as stockbrokers, insurance agents and bankers. Each had a vested interest in selling their company’s products and solutions. Training primarily was based on techniques designed to “close the sale.”
A new idea took flight on December 12, 1969, when 13 business leaders with backgrounds in mutual funds and financial services gathered in a meeting room at Chicago’s O’Hare Airport Hilton hotel. Led by Loren Dunton, the group sought a better way to deliver financial services without consumers enduring sales pitches from multiple providers. The group outlined steps to further the idea that the public could benefit from a true profession that integrated knowledge, practices and client-centric solutions from across the myriad facets of the financial services spectrum. Out of that came an educational institution, the College for Financial Planning, and a new membership organization, International Association for Financial Planning (IAFP). Dunton (1918-1997) is regarded as “The Father of Financial Planning.”
In 1972 the Certified Financial Planner (CFP) designation was introduced and 40 men and two women graduated with the first class in 1973. The graduates decided to create an “alumni association of sorts,” giving birth to the Institute of Certified Financial Planners (ICFP). Hearing about this new concept of financial planning in late 1973, this writer began studying for the CFP exam, graduating in 1975 with the third class from the College. With a new body of knowledge and a certification, yours truly was the 171st Certified Financial Planner on the planet. Later, I was privileged to serve on the board of directors of the ICFP for eight years, including as national president, 1986-1987, and chairman, 1987-1988. In 2000, the ICFP and IAFP merged to form today’s Financial Planning Association (FPA).
Access to financial planning
The primary mission of FPA is to help to ensure that comprehensive financial planning is available to the public through proficient and ethical financial planners. Financial planning is now taught in numerous colleges and universities in undergraduate and graduate formats. We have come a long way in forging a respected profession. At the annual convention of FPA this year in Phoenix, Ariz., Sept. 27-29, the 50th anniversary of the founding of financial planning as a profession will be observed, recognizing graduates of the 1975 first class of CFP designates as well as the next classes of the 1970s.
Financial planning as a concept tends to revolve around money. But money is but a tool designed to benefit your life and the life of those you love and who depend on you. Financial planners in the 1980s began to think more broadly about life events, both positive and negative, as well as the money and assets required to meet a person’s fundamental necessities, allowing one to feel safe, secure, and confident.
Sooner or later, a person realizes that he or she is on this planet only for a relatively short time when measured against eternity. When America was founded in 1776, the average person could expect to live to the age of 35, a time when many folks today are starting to get serious about security, career, family, purpose and meaning. Now, for a couple, planners plan for a life span of 100 years and a surviving spouse living for 30 to 35 years in retirement. Even retirement overall is being rethought. How money relates to a life of meaning and purpose increasingly is considered, before and, especially, after retirement.
Financial planning preoccupations naturally follow the age wave in terms of the challenges involving money that one confronts. How to pay for educations, for oneself or children? Marriage. Buying a first home. Career decisions. Continuing education and training. Investments to bolster income and net worth. Bumps on the road of life ─ illness, injury, disability, untimely death, divorce. The freedom to work or to not work. Economic independence.
We see planners developing specialties to deal with life events and aspirations. College and trade school educations. Career planning. Nurturing a closely held business and ultimately harvesting the value one has built. The psychology of investing. Planning for the vagaries of aging and care for self, spouse, parents and grandparents. Charitable giving and philanthropy. Retirement security devoid of boredom.
As the early financial planners grew in wisdom and understanding through education and real-life conundrums based on their lives and those of clients, financial planning became life planning at one point. But recognizing that financial advisers generally are not therapists, author and writer Mitch Anthony popularized the term financial life planning. Planners need to know your story ─ who you are, how you got to where you are, and where you wish to go; your values; goals and dreams; your concerns; identifying those who depend on you or who may do so in the future, such as aging parents. In several of his books, including “The New Retirementality,” Mitch asserts that the “ultimate goal of money is a greater return on life.” Money is but a tool to help answer life’s “what if?” questions, and to facilitate the fulfillment of your life’s aspirations, and whatever you think awaits you in the hereafter.
Financial planning as a concept and career path has come a long way from those early events in 1969 and 1973. As life’s possibilities expand, along with improvements in health care and longevity, life-focused financial planning will continue to grow as a career path and as a personal life-affirming planning necessity.