Financial planning: profession or vocation?

    The human side of what we do is becoming more important as our clients’ lives become more stressful


    As lifestyle financial planners (LFP), we keep talking about striving to be professional and to run professional businesses. We compare what we do to the occupations of lawyers and accountants who we view as being true professionals. But is there more or even something deeper which speaks to the work we should be doing with our clients?

    How do you know if your friends’ children are studying to be lawyers or accountants? Because their parents will tell you. Nothing wrong with this. All parents want to be, and should be, proud of their offspring’s achievements. It seems wrong to me, however, that these professions seem to hold the monopoly around implied future success. The man in the street views a successful accountant as someone who can help you pay as little tax as possible and even avoid it where possible by using (sometimes aggressive) tax structures; as well as keeping your business running smoothly.

    To be a good LFP, we know that we first need to know our stuff around things such as investments, cashflow planning, tax, estate planning, etc.

    A successful lawyer would similarly be seen as someone who gets you out of trouble by drawing up a watertight contract, being great at litigation or getting you a good divorce settlement regardless of which side you are on. This means they must have an in-depth understanding of contracts and trusts and have excellent skills in arguing your case. All these things take hard work and dedication.

    Both these professionals’ client relationships are in the main transactional and the more successful the professional is or is deemed to be, the more you the client will pay for their services. There is mostly no need for them to care for their client or worry about the correctness or morals of the cases they argue, in fact if they did that it may be seen as unprofessional. These professionals will also deal with thousands of different clients throughout their career, many on a once-off or case-by-case basis.

    I know many brilliant lawyers and accountants who do top-class work and do care for their clients, but it does not seem to be a prerequisite to be seen as a professional.

    Not all advisors are LFPs. Many see and call themselves investment experts or estate planners. Again, there is nothing wrong with this but being an expert at a particular aspect of what we do could mean that that person is seen as being transactional, just like the two occupations mentioned before.

    To be a good LFP, we know that we first need to know our stuff around things such as investments, cashflow planning, tax, estate planning, etc. The list goes on and touches on many aspects of what accountants and lawyers specialise in. These skills allow us to give advice around the money, yet we also know that we need to go further if we are to deliver our most valuable work which is around the person and their life. As a great client-focused LFP, we go further than just the transactional points mentioned above. We take time to get to know our clients by finding out who they are, how they got to where they are, where they want to go and who they want to take with them on that road. We need to know what is important to them and why. We also know that we cannot have more than around 100 clients if we are to have the relationships we need, to add true value.

    By Dirk Groeneveld, Lifestyle Financial Planner, Client Care

    Building the kind of relationships we should have with our clients takes time and involves a lot more than “knowing our stuff”. In fact, if we do not get to know our clients properly, should we be advising them on what they should do with their hard-earned money? I would suggest that the answer is “no”.

    My view is that aiming to be professional is important but also not enough. I would say that to be good as an LFP, one needs to be “vocational” in our approach to our work. The word vocation speaks to a “calling” or a “life of purpose”, rather than having specific skills to perform a certain job.

    This implies that making money should not be our main motivator if we really care about our clients. Yes, money is important, but it is a result of the great work we do and it cannot be more important than the lives we work with. We should steer away from transactional relationships as it is very difficult to run a business which does both – the lines get blurred.

    Much (even most) of what advisors see as their value proposition is being taken over by some form of robo-advice or a new app. These are things like fund picking, asset allocation, cashflow planning, budgeting, etc. However, the human side of what we do is becoming more important as our clients’ lives become more stressful. I believe we can only make our clients feel cared for if we do really care. This cannot be faked; it must be real. It is felt. So, should we be striving to be professional or vocational? You know my view.