ARLINGTON, Va. -- Financial planners have a communication problem.

Just as advisors often struggle to win clients over on the merits of best-interest fiduciary advice, those planners providing a truly holistic service model might have a hard time differentiating themselves from other financial professionals who offer narrower services, according to Tom Warschauer, a professor emeritus of finance at San Diego State University, one of Financial Planning's Top schools for financial planning. Warschauer addressed some of the challenges facing the planning profession in a keynote address at the CFP Board's annual Academic Research Colloquium.

"We need to convince clients that comprehensive planning has value," Warschauer said, appealing for support from the academic community to bolster research into financial planning as a distinct, goals-driven field.

"Financial advising is a discrete matter," said Tom Warschauer, a professor emeritus of finance at San Diego State University.
"Financial advising is a discrete matter," said Tom Warschauer, a professor emeritus of finance at San Diego State University. Rachel Naft


"Financial advising is a discrete matter," Warschauer said. For example, a client might seek out counsel on how to approach planning for retirement or college education. "I'm arguing financial planning goes well beyond that."

He is calling on researchers for contributions that will advance planners' ability to understand and influence clients' decisions and behaviors — as well as further inquiry into how to effectively communicate and promote the profession.

Warschauer also argues against a style of planning that prioritizes clients' goals in a way that inevitably weighs one goal over another. He cites this as another area where academics can contribute by helping planners gain insight into the interplay of various goals their clients may have. In real households, Warschauer argues, planning for retirement and saving for a child's college education are not distinct goals with one outranking the other, but rather two interrelated elements of a client's broader financial picture.

"Much of our research needs to contemplate this interaction between the goals. It's not a simple matter of prioritization," he said. "You can't really make that argument. It's the interaction between their goals that make this important."

In Warschauer's view, the essence of financial planning is an amalgam of a client's financial and legal needs woven together in service of all of their various goals.He cites the definition offered by the CFP Board in the proposed revision to its code of ethics and standards of conduct: "Financial planning is a collaborative process that helps maximize a client's potential for meeting life goals through financial advice that integrates relevant elements of the client's personal and financial circumstances."

"That's a pretty good definition of financial planning," Warschauer said.

"The point is that 'S' on the word 'goal,'" he added. "That one letter is really more important than one might think, because clients don't have 'goal' -- financial advisors provide answers to a goal. Financial planners are integrating the various goals the client may have."