Professional financial planning for all

An opportunity to re-imagine our profession.


The FPI’s vision of Professional Financial Planning for All is noble. But I believe if we are to achieve this vision, financial planners need to re-imagine how they see themselves and the profession. I was recently reminded of this challenge in conversation with two financial planners.

One planner shared how he had spent over 60 hours doing work for a potential client. The client complimented him on the quality of his work and his advice but decided to implement the recommendations himself. The planner had not agreed a fee upfront for the work.

The second financial planner shared her frustrations about a proposal for a R30-million client. The planner was frustrated she had not followed her normal advice process. The client had insisted on getting an investment proposal with recommendations upfront. The planner usually only talks about investments towards the end of her process. Even if the client agrees with the recommendations, they may not use the services of the planner to implement them and definitely won’t pay for the proposal.

Some might argue that these were two difficult clients. Or were they just smart? Getting professional expertise and advice for free.

Contrast the experience of the two planners with that of the cardiologist I recently consulted due to an irregular stress ECG. After a physical examination, the cardiologist sent me for a CT scan. Days after the cardiologist’s bill had been settled, I got the news that I was fine. Payment was not dependent on the outcome of the cardiologist’s report. Imagine if we only paid medical bills if we liked the results we got. And yet many professional financial planners operate like this. They do an analysis and present a report or proposal in the hope that the client likes what they see.

If professional financial planners working with wealthier clients don’t get paid for all the work they do, what hope is there for the poorer sectors of our society to get professional financial planning?

A few years ago, independent financial planner Gregg Sneddon and I approached the then FSB with a proposal to realise the FPI vision of Professional Financial Planning for All. We envisioned a replication of the medical model which gets health services to the poor, through government-backed public hospitals and clinics.

If professional financial planners working with wealthier clients don’t get paid for all the work they do, what hope is there for the poorer sectors of our society to get professional financial planning?

Last year, I saw first-hand the power of the medical model when my neighbour’s housekeeper had a heart attack while jogging. Treated in a public hospital she made a full recovery. As a “poorer” member of society, she didn’t have to pay for the world-class treatment she received, but those treating her got paid for their work. The public health system has doctors who range in ability from world-renowned specialists to new graduates doing community service.

Applying the medical model to financial planning, newly qualified financial planners could do their “community service” within public financial planning clinics. Like doctors, they could choose to go into public service or private practice. More experienced financial planners could work in the public or private sectors, or straddle both. And they would be remunerated in both sectors, probably at different rates.

Financial planning for poorer sectors of society is often nothing more than selling a funeral policy. The broader financial health of the individual is not considered. Through a private-sector lens, it’s not economically viable to do more than this.

To achieve the FPI’s vision of Professional Financial Planning for All, we need a public financial planning service. It will also ensure financial planning rightfully becomes a respected profession, where the value lies in the financial planner’s expertise and advice, not in the product.

Rob Macdonald, Head of Strategic Advisory Services, Fundhouse

Rob Macdonald has held several senior positions in the investment industry. At Fundhouse, he acts as a consultant and coach to financial advisors and develops and facilitates training programmes in behavioural coaching and practice management.

Before joining the financial services industry, Macdonald was MBA director at the UCT Graduate School of Business. He is co-author of the book Rethinking Leadership and has consulted, written and spoken widely on a range of topics. Macdonald has a Master’s degree in Management Studies from Oxford University and is a CFP® Professional.