He Said, They Said: Imaginary Planning Conversation Continues

The June 2012 issue of Financial Planning included a controversial column from industry expert, author and instigator, Bob Veres.

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Comments (7)
Personal finances includes both assets and liabilities. It involves income and expenses. Somewhere along the way, our clients will need help with all of those things. I just attended the FPA Experience 2012, which was another very well organized event. No information was provided in any of those sessions that would help planners better address their clients' debt management or budgeting efforts. I really don't have a problem with that. If I need asset management or an insurance product I can contact a planner. If I want to talk to someone about debt elimination, I can check out Dave Ramsey's Financial Peace University. That's just the way it is. Dave probably considers himself to be a planner as well.

Richard
Posted by RICHARD L G | Friday, October 05 2012 at 9:44AM ET
True story: One time Bob Veres and I were stuck in a car on the way to see Cheap Trick play the Star Plaza and he saw this little old man in the middle of the road selling Kiwanis Peanuts. The guy must have been 80 if he was a day, and he looked like he was going to have a stroke. Bob shook his head, pulled the car over, got out and sold every bag of peanuts for the poor guy. Even with the detour, we still made it before they played "Surrender." That man is a saint.
Posted by William W | Tuesday, October 09 2012 at 7:30PM ET
Thanks for the comments so far.
Posted by samantha a | Wednesday, October 10 2012 at 11:37AM ET
RE: "addressing how assets will be distributed and what legacy the client wants to leave, to whom), tax planning, investment advice, personal risk management (including life, disability, LTC, umbrella coverage and health insurance) and one-offs like charitable planning and planning for special needs kids."

I tend to agree with the above that comprehensive financial planning is rarely done since 1. the bulk of planners are using some software product that bypasses actual real thinking in order to simply increase AUM, 2. real intensive planning takes a LOT more than a designation will ever provide. Even a planning degree does not prepare a planner for one of the most challenging of professions. That is because, as differentiated from other professions, the issues keeps changing radically (think estate tax, risk of loss, indexed annuities and life insurance, inverted yield curve, fiduciary duty, correlations, etc., etc., ad infinitum) and very few will unilaterally spend the necessary and inordinate time to retrain their minds and expertise. One can demand various continuing education but such advance in training will not/cannot come from those who have nothing more than a designation to begin with. Think also of an RIA. A fiduciary duty backed by what? Most RIAs simply converted the 'intellectual capacity' of having passed the Series 7 exam as their vaunted position to delve into sophisticated areas by generally calling themselves 'financial advisors' et al. For the uninitiated, no broker has been taught the fundamentals of investing (even diversification).
Posted by Errold M | Friday, October 12 2012 at 9:59AM ET
Therefore we have LARGE elephants in the room- which Veres and all others unilaterally dismiss: the lack of knowledge and legality. A RIA has nothing, by her/himself, as a prerequisite to being anything more than a bad securities advisor. And they are not required to take continuing education (which would do how much good just backed by a series 7?) Secondly, for those attempting comprehensive fee planning, they are illegal. And with support, acceptance with indirect- even direct statements- to act illegally on issues requiring advanced knowledge and licensing.
No one is saying that fee planners are not already RIAs with the SEC or state. Easy enough to get (though with lots of time for paperwork). What is missing- in most states- is the requirement for licensing of insurance advice for a fee. I will assume readers have a compete agreement to the responsibility of being legal if one wants to be a fiduciary. For over a decade, there was only one properly licensed CFP in California who was fully licensed and legal to offer such advice. Why? Because the state exam to cover fee advice was very hard- much harder than anything a CFP had personally encountered. So the CFP Board, NAPFA, California and American CPA Society, FPA and more just inferred- or even directly stated- that members keep acting illegally but just keep quiet about it. (That the state did not have the financial resources to subsequently enforce the law in no way diminishes the requirement to act legally. See moral egoism.)
So you can have all the comments about what or who is a financial planner. But underlying all is the 'effort' to impose a fiduciary duty with just words but not deeds.
Posted by Errold M | Friday, October 12 2012 at 9:59AM ET
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