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The War Still to Be Won

There isn’t any marketing hype machine behind my newly-launched book, The New Profession, but I suspect that by now you know it’s out there and available.  By far most of the value of the book is guidance on how advisors can prepare for the coming years of hyper-rapid evolutionary change, along with some great tips on marketing, practice management, client service and personal productivity.  I say at various times that this or that tip is worth ten times the cost of the book, and there are at least 15 of those scattered around in various chapters. (From this website, click on “order” and choose e-book or print format.)

But there’s one potentially-overlooked point which I tried to make, and I’ll try to make here as well.  I’m afraid that our lobbyists and thought leaders may be missing the big picture when it comes to fighting the good fight on behalf of the profession.  We seem to think that the battle is over compensation models, or the fiduciary standard (or imposing it on other business models), or the DOL Rule, or, well, a lot of stuff.

Make no mistake: those are important issues.  But they are not the war.  And knowing the big picture goal is important.  It’s possible that we’ll continue to lose pretty much every battle we fight with the regulators and Congress.  But if we stay focused on the bigger picture outcome that we want to bring about, then it will still be possible to win the much larger conflict.

What war am I talking about?  The goal is not to create a fee-only society; there will always be sales agents.  The goal is not to force everybody to act as a fiduciary at all times; we know they won’t.  The goal is to create a real profession, which will be called Financial Planning—a protected domain where we can create and enforce high standards.

My book talks a lot about what “creating a profession” means, but we can list the important outcomes fairly quickly.  First: every consumer will know how to find somebody who will act in his or her best interests, and also have the training and experience to provide excellent advice.  Today, we live in a world where every financial advisor wears the equivalent of white lab coats, and it is impossible to tell the professionals from those who will carefully listen to your financial situation and then recommend the non-traded REIT they had in their briefcase all along.

It also means better, tighter, more meaningful regulation that is guided by the profession itself.  The SEC may still regulate RIAs, but members of the financial planning profession will set their own standards.  In The New Profession, I envision a world where most financial planners are compensated by retainers (this is a few years in the future, you understand), where investment advice will be primarily handled via online platforms.  Is a financial planner in that environment considered to be an RIA?  Quite possibly not.  Won’t THAT be an interesting world?

Our debates would be richer and more interesting if everybody involved were a true professional, and I suspect that a lot of people who rely on commission revenue today would be attracted to the greener pastures of professionalism.  Within our confines, we could protect the fiduciary standard and erect barriers to entry against the incompetent, the conflicted and the greedy opportunists.

This is not utopia; a profession would still require self-policing and a lot of internal debate about what it means to be a financial planner.  The profession would hopefully never stop evolving.  But I envision a better world once we, collectively, have given birth to a new true profession—for consumers, most importantly, and for the people in the financial planning world almost as importantly.

Keeping our eyes on the big picture—on the big war behind the skirmishes—gives us a better chance of achieving our goals.  And it helps us recognize that the losses we endure—and there have been and will be many—aren’t the end of the road, but another step toward eventually claiming an important victory.  One of the most interesting historical facts I know is that George Washington, who commanded the Revolutionary armies, never won a battle against the British army, and ultimately won the War of Independence.

We can do that too.  The New Profession is my best effort toward bringing about that historic event.

I wish you all a terrific 2017, and remind you of something I constantly remind myself: that fulfilling this wish is at least partly the result of things we, ourselves, can control.