Mention “Certified Financial Planner” and the image that jumps to mind is someone who talks numbers and has a better idea of the way the mysterious world of money works.

Would you believe that the profession of financial planning was created by someone who never practiced it?

In 1969, Loren Dunton gathered a group of business leaders in the mutual funds and financial services industry to create and fund a college for educating a new professional—the financial planner. That led to the formation of the College for Financial Planning. A year later, he would advocate the formation of a new designation for the graduates of the college, “Certified Financial Planner” (CFP).

The Institute of Consumer Financial Education that he would go on to found was dedicated to teaching and helping people to:

• improve their spending, increase their savings, and use credit more wisely
• save and invest at least 10% of their income
• stay away from over-spending and credit abuse
• keep more of what they earn and do more with what they keep
• provide personal finance programs available to assist employees.

Now, “life” does not figure in any of those goals, right? On the other hand, imagine life if you did not have trustworthy help to do all of that!

What has changed

Change never takes its foot off the accelerator, but the profession of legitimate financial planning and its goals remain more relevant today than ever before. The core values of the profession have got stronger even as the world around us and the lives we help keep on the right money track have got more complicated.

Double-income families are the norm. Easy accessibility to a good school might still be an important criterion, but the destination for higher education is now another continent altogether. Celebrations include not just birthdays and festivals but a vacation abroad. If the opportunity and the compensation are attractive, there are no second thoughts about relocating or even hopping countries.

A couple of decades ago, we would start the whole financial planning exercise by sending the client a checklist. Tick what you want, and we will tell you how we can help you get there. Yes, the focus was essentially on numbers.

Today, the first few conversations are the most important and may not really feature the key numbers. First, the family has to develop confidence in the person who will be at the wheel of their financial journey for years, even generations, to come. The finance professional has to get to know the client, their family before he can help them shape their dreams into gettable goals.

Questions and possibilities

Yes, you could be that client who knows how the gears of the money mechanism turn. Yet can you devote all your time and infrastructure to be always on your financial toes? More importantly, can you, as one individual, visualize all possibilities? The ups and downs in your bank balance may be predictable. How about the upheavals in the global economy that threatens the very existence of the “gold mine” you have invested in heavily?

The experience of the financial planner and their exposure to unanticipated situations put them in the best place to ask the difficult (and at times unpleasant) questions.

Important as it is for us to empathetically connect with the client, we offer the best value when we remain objective, carried away neither by fleeting enthusiasm nor by persistent melancholy.

Even after we sit with the client and run through what we think is an exhaustive list of possibilities, there is always the one unthought-of possibility that can rock the boat (remember Covid?). While no financial planner is yet certified to be omniscient, the professional you carefully choose to be your guide will always have the right experience (and instincts) to take the right step that is sure to minimise the unavoidable damage.

Trust will always matter

Today, you need help with financial planning, wealth management, cross-border finance solutions, financial transitions, retirement planning and so on. One issue may demand most attention or, more likely, all of those will need to be handled right at any given time.

As complexities multiply, is it still the same profession that Dunton had conceived? Have technology and all its companion online distractions changed it?

What investors want most, says Colin Coombs, part of the first batch to graduate from the College of Financial Planning in 1973,  “is a trusted relationship with an individual, not a website or a big presence on the television screen. If they can find that trusted relationship, they hold onto that, tightly.”