Financial Planning: Insights from Industry Leaders

While every firm touts planning to be central to their value and differentiation, the reality is that most clients are not getting this in their relationship.

This is not opinion; the facts confirm this. One leading financial planning software platform publicly touts that they have over 60,000 advisors using their planning software and that advisors have generated 2.5 million plans in the software. While impressive at first blush, digging deeper shows the reality. Based on these numbers, the average advisor is developing 10 plans annually for clients (requiring an average of 11.9 hours to complete a plan). If you assume a relatively small book of 150-200 clients per advisor, doing the math shows that it would take years to engage your entire book in the traditional planning process.

With this in mind, we engaged a handful of leading industry experts who have been uniquely effective in integrating planning into their firm and/or their practice, to provide insights that we believe will be of value to you.

This is the first in a “four-part” series in which we will be exploring the following specific topics with these experts:

  • Understanding the Evolution of Planning (and where it is going)
  • The Strategic Imperative of Planning (both from the perspective of leaders and how they view planning in the context of their overall business strategy, as well as advisors and how they view the same in terms of their practice)
  • Addressing the Advisor Adoption Challenge
  • Strategies for consistently delivering planning-centric engagements with prospects and clients

We hope you find this series and the perspectives and tactical insights from these successful industry leaders and advisors both insightful and meaningful as you and your firm seek to address these challenges.

Financial Planning Insights - Part I

The Evolution of Planning – Where it Was and Where it’s Going


While the basic definition of Financial Planning is likely not much different today than it was 15 years ago, the reality is that there has been a radical evolution from the processes and approaches used in the past to those that are available today. This shift is so significant that we felt starting with this broad topic would shed light for you on how two leading wealth management planning executives have seen planning evolve and how this has, and is, shaping their perspectives as they lead and support their organizations in the integration of planning into their client experience.

Greene Consulting: How have you seen financial planning evolve over time?

Joseph Sicchitano – SVP and Head of Wealth Planning and Advice Delivery, with 28 years of experience both as a planning practicioner and in leading/supporting financial planning strategies at the organizational level.

Joe Sicchitano: Good question - in some ways, not at all, and in other ways, far more prominent.

First, from a fundamentals and principles perspective, planning still is about “bringing the future into the present so you can act on it today” - quote attributed to Anais Nin.

The steps in the process are largely the same:

  • Identify goals and objectives,
  • Gather data (hard and soft),
  • Analyze the data (current trajectory vs. desired),
  • Evaluate alternatives,
  • Develop recommendations,
  • Take action, and
  • Monitor progress.

The principles of building wealth over time are essentially still relatively simple:

  • Income - Expenses = Savings;
  • Savings x Time = Wealth; etc.

Some changes are less about a difference and more about a realization of the importance of foundational principles. For example, the relationship side of financial planning - interpersonal skills and things like emotional intelligence (EQ) - when working with clients has always been important, but there is a renewed appreciation and focus on just how much it matters when helping clients make tangible progress towards the things that are most important to them.

Similarly, the emergence of a focus on behavioral finance is really, in my opinion, a response to the question, “Why do well informed people choose to not do the things they know will help them achieve their goals?” If you look at that question, it’s relevant to most issues where behavior and knowledge are not aligned (health, exercise, nutrition, finance, etc.). I think an emergence of “financial wisdom – meaning, the active application (doing) of what we know to be the right action” – is a response to the frustration of advisors when they see their clients falling short of their goals; not because the plan is not sound, but because the action required to make the plan a reality is lacking to some degree. Advisors feel deeply committed to seeing their clients succeed. This behavior gap is an important frontier, that while having always existed, is gaining prominence as a permanent part of an advisor’s value promise.

Software and technology, while far better than it was when I started in the business, is still significantly lagging when measured against technology used in many other areas of our lives. The “Amazonification” of personal finance is coming but has not yet arrived. Financial technology is still largely perceived, positioned and used - as it has in the past - as an analytical tool separated from the process itself. The impending significant frontier is merging the technology into the experience itself, where technology and touch combine in a seamless experience completely centered and customized on the client. This will be a tectonic shift in the industry and will absolutely introduce non-traditional competitors and solutions into the client dynamic. Agile organizations will shift with it while many will not and go the way of the dinosaur.

George Fernandez – VP, Practice Management Resources, with 20 years of experience as an Independent Financial Planner, Financial Planner Support Team Member, Financial Planning Product Manager and Practice Manager.

George Fernandez: Up to the point when I entered the wealth management profession, financial planning was widely used as a sales tool. While it continues to be the case today, it began shifting to real holistic planning about 17 years ago. Beginning with the tech bubble burst, we started to see shifts to “advice”; however, it was typically focused on investing for retirement. The holistic approach began gaining momentum in about 2005-2007. I believe the primary reason was that firms began realizing that clients were willing to pay for advice separate from the investment fees.

This separation of fees typically fell into a couple of categories: family office/ultra-high net worth and fee for engagement (e.g., Garrett Planning Network). While many firms began offering variations of this model, the true fee-based planning model began taking off around the time of the Great Recession of 2008-2009.

It was at that time that clients began demanding sound advice and, more importantly, they wanted to know more about the process. The proliferation of technology, the Internet, and low-fee investment options all helped drive the advice-planning theme. As the economy recovered from the recession, clients discovered the importance of a comprehensive approach and fee-based planning continued to build momentum. While it was still prevalent in the UHNW and HNW space, the industry did begin to see some level of democratization of planning to the mass affluent market. On another note, the mass market didn’t begin to see planning capabilities until the introduction of financial wellness programs - Dave Ramsey’s program and the now defunct LearnVest (this was the closest we came to a true self-directed model with access to a CFP® professional when needed).

American Express became well known for their fee-based planning model because they were one of the largest firms to introduce the “annual retainer” approach. The fee was nominal (<$500 as I recall), but it still began developing the expectation that planning was a crucial element to success.

Today, fee-based planning is the norm, but you’ll also see bundled services. In fact, in some cases, there are flat fee models for investments while there are separate fees for the planning side. Both are retainer in nature as well.

Along the way, technology evolved as well. The most significant change has been the ability to collaborate more effectively with clients along with providing clients online access to some type of client portal. The portals have varying design. Some will show investments only while others highlight goal progress only. Of course, the online vault storage is tables stakes, as is aggregation.

The approach used by planners has also evolved during this period. As mentioned, it began as a sales tool before it was adopted as holistic advice. As technology improved, the simple time-value of money calculations applied to each goal has evolved to integrated goal planning. This means that as you change one goal, it immediately impacts another goal. With the introduction of personal computers in the late 90’s, advisors had instant access to advanced tools that had been used in centralized planning groups.

Having said that, the proliferation of modular tools has also increased because many of the largest financial planning software providers have focused on generalized planning to meet a larger audience and have allowed other firms to create tools that optimize analyses on things such as health care costs, estate planning strategies, business planning, Social Security planning, legacy planning, risk tolerance, etc. Hopefully, one day someone will figure out how to effectively connect the best of the best of these types of tools!

I could go on here, but we’ll leave it here for now.

We hope you find value in the perspectives provided here, as well as the Key Points and Observations provided in the download, and that you will read the second in this series where you will hear comments from Joe and George, as well as two front-line advisors on the topic of “The Strategic Imperative of Planning.”

Greene Consulting has developed a “Digital Experience Program” that has been designed to help organizations enhance advisor adoption and provide tactical strategies for better leveraging and scaling your specific planning software into client and prospect engagements… much in line with some of the insights provided by Joe, George, and the two excellent advisors highlighted in the remainder of the series. If interested in learning more, contact David Greene at 404-324-4600 or via email at davidgreene@greeneconsults.com or Rick Swygman at rickswygman@greeneconsults.com.