Financial planners work out own plans: What should you see as a client down the road? More about you

NEW YORK -- Financial planning as we know it today is a fairly young and evolving profession. That was evident earlier this month as some 3,000 financial planners and associates gathered in Seattle at the Financial Planning Association annual conference and Exposition.

I believe everyone in "Millionaire Zone" should be aware of the services provided by financial professionals. Whether you are a client or not -- that's a personal choice -- it's interesting to observe what this group is doing and where it's going -- and how that might affect your experience now or someday.

You may not know about the FPA. It's a 30,000-member trade association set up mainly to bring standards and community to the financial planning and advisory profession.

In its own words, FPA is "...the leadership and advocacy organization connecting those who provide, support and benefit from financial planning" supporting a "professional commitment to education and a client centered financial planning process."

One of the group's main goals is to build integrity and transparency in the planning process, avoiding typical conflicts of interest, like the inherent conflict between selling product (their firm's interests) and the needs and interests of the client.

Beyond the numbers

More and more, FPA and its members view their role as larger than just "running the numbers." If you engage with today's planner, you're likely to sit down for one or more "discovery" sessions designed to understand you as a person, as a married couple or family before even touching the numbers stuff.

The engagement is as much or more about counseling as it is about number crunching.

A breakout session entitled "Planning for the Exterior through the Interior" by certified financial planner and author Roy Diliberto provided a good example. Diliberto's thesis: you can't get a good "exterior," or numbers-based plan, until you establish the "interior," the client's inner issues and behaviors about money.

Clients ask what to bring to a first meeting; Diliberto's answer is "you." He suggests not asking clients for tax returns or other money specifics until the third meeting, having them instead share their first money experiences as children and to answer questions like "I want to be remembered as...." Further, he advises planners not to ask questions but "...to listen to the questions they ask you."

All of that establishes a relationship and lays the groundwork for the numbers-based plan. That plan, which is shaped around a client's inner agenda and behavior, then has a greater chance of working.

According to another show attendee, "these FPA meetings in the beginning focused squarely on the technical stuff. Now it's become more about how to build 'you' into the planning process."

Where the profession is going

Here are some important trends picked up from a short conversation with FPA Board member and financial planner Bonnie Hughes, a certified financial planner. These trends shape what you'll see or experience in a client engagement:

• Planning is becoming more goal based, not cash based. In line with the comments of Diliberto and others, you're likely to see extensive discussion of your goals and inner workings before touching the dollars and cents. 
•  More interactive planning with clients. New software packages -- many on display at the show -- let planners and clients work together interactively to develop the plan. This increases client understanding and involvement, and in Hughes' words, replaces the mysterious "Wizard of Oz" approach to producing the plan. That builds trust and allows you, as a client, to help shape your own destiny. 
•  More clients are retirees. As the population ages and becomes more exposed to complex elder-care planning and other issues involving later life stages, the planning profession is gearing up with new books, continuing education and partnerships with the elder-law community to handle these challenges. 
•  Health care is becoming a bigger factor. Likewise, as health-care costs escalate and clients pay an increasing share, both now and in the future, covering health-care costs is becoming a bigger part of the planning process, and planners are gearing up to help navigate health-care choices. 
•  Better planner-client communications. Thanks in part to the Internet and increased reliance on self-directed retirement plans, online banking and investing, clients are becoming savvier. At the same time, planners are learning to dispense with the shop talk and speak in plain English. The result is better communication between the planner and client. 
•  Financial education is improving. Finally, while there's still a long way to go, especially at the high school and early college level, there are more four-year degree paths and even a few M.B.A. programs in personal finance and financial planning. This will bring greater professionalism and more of a "big picture" approach to planning.

So whether you "self-direct" your personal finances or engage professional help, it's nice to know there's an organization committed to raising the profession to a level similar to the medical or legal professions.

Likewise, if you do become a client, or already are one, it's good to know more about what planners do, how they do it, and how it's changing. It's part of being a smart "Millionaire Zone" consumer.

Peter Sander contributed to this article.