The traditional financial plan has evolved to include in-depth personal data gathering. Professional-standard portfolio management now includes very specific research and allocation among stocks, bonds, real estate and a variety of vehicles that invest in them. But seldom do planners gather useful information on--or provide recommendations for--an enormously important driver of personal and financial well-being: the client's career.

This is a glaring omission for both the client's quality of life and portfolio growth. The average client might spend half of his or her waking time at work, which makes his or her career hugely relevant to the quality of life and personal satisfaction that are addressed by the life planning movement. And if you consider a client's career as an asset--as I do--you know that it generates a huge percentage of a client's net worth, which clearly pertains to portfolio management.

If the profession could create tools and procedures to help clients manage their careers, we would add significant value by:

• increasing the client's potential income;

• optimizing the client's work/life balance and quality-of-life issues; and

• extending the life cycle of the career asset.

Indeed, if a client's career can be considered one of his or her most valuable personal and financial assets, then career asset management could become an important service for planners to offer. Among other things, it could help us distinguish our brand in a world in which asset management, retirement analysis and tax preparation are increasingly viewed as commodities.

BINARY APPROACH

How would a traditional planning engagement expand to address career management? By default, the traditional financial planning process views clients' careers as static, and takes a binary approach to evaluating their work lives: Clients either work or retire. In the real world, however, there is a complex and dynamic continuum between not working at all and full-time employment.

For example, say your client's most pressing concern is to retire immediately, or soon thereafter. He finds his job stressful and feels he has a serious work/life imbalance. Planner A, following the traditional model, focuses on retirement projection and portfolio issues to help the client retire at age 60--and ignores career management. Planner B encourages the client to explore alternatives to retirement that could optimize the quantitative and qualitative advantages of his career.

Let's assume that, at the time of the initial visit, this individual has peak wages of $150,000, and that Planner B is able to help him negotiate a less stressful employment arrangement. For three years he will work 75% of his former hours and earn 75% of his peak income; the next three years, 60%, then two more years at 40%.

Under Planner B's guidance, the client will be work for eight additional years, retire gradually and enjoy increasing amounts of free time. After you subtract out an average income and employment tax rate of 40% and assume a 6% discount rate, the net present value of those eight years of income is $348,150. If the client's investment portfolio at the time of the first visit is $1 million, Planner B's advice will increase the client's net worth by approximately 33%.

This, of course, is not a total accounting: The value of an extended career also includes employee benefits, plus increased pension and Social Security accruals. Nor do the numbers account for intangibles such as the ability to maintain social interaction and self-actualization through work.

How feasible is this scenario? Consider the impact that demographic changes are having on the job market, and you'll see how well it can work. The primary group of working-age adults, 25- to 54-year-olds, is projected to decline from 70.2% of the labor force in 2002 to 65.9% by 2012. Meanwhile, the number of workers who are 55 and older is projected to increase from 14.3% of the labor forcet o 19.1%. From 2002 to 2012, the Bureau of Labor Statistics (BLS) projects that the number of new jobs will increase by 15%, and 97% of them will be in service industries. Career and life experience have greater value in an intellectual economy than they do in a manual labor or manufacturing economy. Companies will need to retain their experienced employees to fill the population gap in the next generation.

Moreover, project-based employment is replacing career-long jobs. One BLS study projects that workers entering the work force today are looking at more than nine job changes during their career. Just as capital needs to be quickly redeployed in response to new opportunities, human capital needs to be adaptable to rapid change. But few workers can easily plot out increasingly complex careers or evaluate potential improvements in their work/life fit.