The holiday party season is in full swing.  Everyone’s decked out in their festive sweaters opining about how long it’s been since they last saw one another while imbibing on watered-down eggnog.  Along comes a new face that gets drawn into the conversation:

“Hi.  I’m so and so.  This is my friend blah blah blah.” 

“Hi.  I’m random guy.” 

“So what do you do?” 

“I’m a financial planner.”

“Oh, you sell insurance?”

There’s an awkward pause before a Seinfeldian “not that there’s anything wrong with that” is added.

Later that evening in another corner (or, more likely, surrounding the cookie tray) the scene is repeated.

“So what do you do?” 

“I’m a financial planner.” 

“Oh, the economy is terrible.  You must be keeping busy with your clients.  Listen, how about I talk your ear off for the next hour about how you know nothing about me, my goals or my priorities yet I want you to tell me the next get rich quick stock to buy so I can turn my $5 into $10,000,000 without any risk.”

(We offer these gruesome scenes not to elicit pity but if you’re a doctor, an attorney or any other professional you’ve undoubtedly experienced the same frustration as you try to enjoy the holiday season or the random cocktail party while someone seeks free medical or legal advice from you.)

The problem is us.  We lack perspective.  We’re all uncaring about and oblivious to others.  OK, so that’s not true but isn’t it OK to vent a little?

Lighthearted ribbing aside the problem lies in the difference between what we perceive financial planning to be and what it is.  Consider this article about the path to success. Now consider the results of a recent survey of what the average person who uses a financial advisor (whether on the brokerage/”suitability” vs. planner/”fiduciary” end of the spectrum) feels are the “most important areas of a financial plan”:

  • investment results
  • transparency of fees
  • quality of the advisor
  • quality of systems
  • access to quality investments
  • stability and quality of the firm
  • no conflicts of interest
  • research capabilities of the firm

The irony is not the disconnect – it’s that the differing views are, in reality, two sides of the same coin.  The article’s steps to success provide a base for an effective financial plan of which investing is merely one piece of a much larger puzzle.

So why the disconnect between what the average person defines as a “financial plan” vs. what planners do in shaping a plan?  We’d argue it’s the disingenuous advertising blanketing our TV screens, the internet and newspapers.  Wait, do any of us still read newspapers?!

Lots of institutions with deep pockets have trotted out ad after ad with trusted faces.  Ameriprise shoved Dennis Hopper into our faces until he passed away.  Now they’ve got Tommy Lee Jones shilling for them.  TDAmeritrade has Sam Waterston (“Et tu, Jack McCoy?”) telling us for $9.99/trade we can run some technical analysis and trade algorithms to become our own personal Goldman Sachs.  And it’s all so easy we can do it while we’re brushing our teeth!

The financial services industry is not alone.  Most companies pushing a product are selling us a lifestyle.  Most SUVs never leave the paved road yet ad after ad features an off-road, mud-filled adventure.  Starbucks produces the lousiest coffee yet we line up to pay $4 a cup so we can be perceived as hip and cool.

In the end, however, it comes down to tuning out the nonsense and focusing on what’s truly important.  Do we want to feel adventurous or own a safe, comfortable SUV?  Do we want to overpay for lousy coffee or enjoy a delicious morning pick me up?  Do we want to limit our goal to investing or do we want financial security and peace of mind?

A financial plan begins with defining personal priorities, our goals in life and our purpose.  These things should be examined, nurtured and celebrated.  From there holistic tax, investment, estate and insurance strategies can be applied.  This is a process.  This is success.  Unless and until we understand and admit this to ourselves the financial services industry will continue distracting us by asking, “What are the most important areas of a financial plan?” while ignoring all aspects of financial planning in favor of investment analysis/sales.