Financial Planning: An Orphan Looking for a Home – Part 5 in an 6 part series

Editor’s note: Portions of the following posting by Susan Tillery, CPS/PFS, CFP, appeared in the January 2011 edition of AICPA Wealth Management Insider Newsletter.

Financial planning needs to be a “stand alone” discipline devoid of conflicts of interest and the moral dilemmas which accompany them.

Financial Planning, without national certification, without universally recognized standards, and without recognition as a profession, has found itself in the midst of a storm of regulatory inquiry. Everyone from consumer groups to Congress wants to regulate this orphan of professional disciplines.

The sky is not falling; the world is not coming to an end even though the media and some financial advisers continue to create a state of fear to facilitate their own agendas. The reality of what is actually happening is that the financial services sector is in the midst of a great moral dilemma. The exact meaning of a dilemma is a situation in which you have to choose between two equally unpleasant alternatives.One alternative has been to manage assets and/or sell products as part of the “financial planning” process. However, as a financial planner there is a fiduciary responsibility to obtain the most appropriate product, at the lowest cost, to address the client’s needs. But, what if another broker-dealer or investment program has a better product or offering? Do you send the client to another advisor to implement the planning recommendation? Or do you sell what you have available to you, and hope for the best?

The other alternative has been to pursue a “true fee-only” practice without asset management or product sales. Unfortunately, the success rate of this model has been dismal at best. Many planners who opted for this model, suffered financially and returned to asset management and product sales, added tax reporting to their practice or abandoned financial planning altogether.

I would submit there does not have to be a moral dilemma. Financial planning is able to stand alone as a discipline and has every possibility to succeed as a profession. The new century has brought with it advances in technology which dramatically reduce the need for the typical “bricks and mortar” infrastructure. Collaborative relationships have achieved what the typical hierarchy, which was often “top heavy” and bloated, could not. The regulatory arena within which financial planners operate has become more clearly defined. And most importantly, the consumer has begun to embrace the discipline as a profession.

We invite you to join Tom Tillery’s webcast Personal Financial Planning: Regulations, Updates, Future of the Profession on Friday, February 28 at 1:30 PM EST. This Webcast will review the history of Financial Planning and the Investment Adviser’s Act of 1940. Additional topics to be discussed are the regulation of Financial Advisers and the three main organizations which provide certification for Personal Financial Planning. The presentation is web based and virtual seating is limited. The course is approved for one hour of CPE and CE. For more information or to register, please email at

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