You never hear anyone talk (or write) about this, but it’s really stunning how often the financial planning profession has been, and is, ahead of the curve in the evolution of our social environment.
For example? Some of us remember that the consumer revolution, which phased out salespeople and put the consumer in charge of selecting purchases based on price and quality, was very slow to enter the financial services world. The leading tip of the spear was the first fee-only financial planners, who publicly and even defiantly sat on the same side of the table with their clients. Instead of selling them whatever happened to be in their briefcase (or whatever they were ordered to sell through the squawk box), they became smart shoppers for investments on behalf of their clients. The whole idea of turning financial customers into clients was invented in the fee-only financial planning world.
The last holdout across the entire spectrum of American society was the insurance industry, which clung desperately to the idea that it would only sell its protective wares through commission-compensated insurance agents. It’s only been in the last five years or so that the insurance industry has started (cautiously) opening up its distribution channels, and guess who it’s reaching out to? Not the consumer marketplace directly (that will come eventually), but to fee-compensated financial planners, who can explain the products and assess the need for them, and who have been recommending insurance on a consumer-friendly basis for decades.
A bigger example is the whole idea of a fiduciary standard, which I think is much more far-reaching than just a way to tell whether the provider of financial advice is a professional or a sales agent. My simple thesis is that a lot of the political and social turmoil in our current society represents the birth pangs of a new social order being born. All the hatred and anger and divisiveness will ultimately lead to a general awareness that our society functions much more effectively and (shall I say) safely and pleasurably when we agree to respect and even look out for each other as a matter of simple social routine. When you see what is not working, you tend to be drawn to its opposite.
The financial planning profession’s deep exploration of what it means to be a fiduciary, to look out for the interests of others ahead of our own, could become a workable model for that next emergent society.
If our society were to adopt a fiduciary ethos, it would greatly reduce the friction in our business and personal lives. It would mean that corporate leaders would compete for workers by visibly caring about their well-being, prosperity and professional fulfillment, and would meanwhile develop products and services that benefited the lives of their customers above all else. It would mean that in business negotiations, each side would look out for the interests of the other side when making proposals, reaching across the table for that elusive win-win. It would mean each of us, walking down the street, sitting beside each other on the subway, bus or train, interacting with our colleagues, would be compassionate and caring as a matter of simple human policy.
Financial planners are outcompeting the predatory, self-interested tactics of Wall Street firms, not by being more ruthless, not by trying to maximize their profit from every unsuspecting customer, but by being more caring and other-focused. There seems, to me, to be an important message there about what works and what doesn’t in the competitive marketplace and in society at large.
There’s an even bigger example of how the financial planning profession is leading our society in a new and beneficial direction. In some of my speeches, I talk about an emergent Age of Fulfillment in our society, which is the culmination of our social evolution. There’s a long story behind this idea, but the short version is that people who embraced the Agricultural Revolution 5,000 years ago, and started tilling the land and gathering the animals they formerly hunted into herds, lived much shorter lives and worked much harder in backbreaking labor, and ate much less healthy diets, than the hunter-gathers whose (mostly-leisurely) lifestyle they left behind.
Why did they do that? I think the main idea must have been something like this: ‘We are creating a path that will someday, once we’ve finally finished digging these irrigation canals and built the last permanent house out of mud bricks, allow us to pursue something more than just survival, more than the subsistence lifestyle of every other creature in the animal kingdom. We will create for ourselves a life where we have the leisure, and the resources, to pursue a life of fulfillment, where we can follow our interests and talents and enjoy who and what we were made to be without worrying about our daily survival. We will still work, but the work will be fulfilling and contribute to greater prosperity, enjoyment and fulfillment for all of us.’
That was a very big dream, and of course only a big dream could have lured people to give up living at the top of the food chain and moving across the world at their leisure, and start digging canals and keeping the circling predators out of the animal pens. I suspect that many of those original farmers, living in those original villages, thought that this blessed Age of Fulfillment was just around the corner. But as the villages became cities, and the cities became nations, the backbreaking labor continued, and our species was forced to keep its collective nose to the grindstone, in a subsistence mindset, right up to the present.
The wonderful news is that we are, finally, at this juncture in history, starting to experience the culmination of that original, wonderful dream. Many people today are, for the first time in the human story, capable of living lives of (sometimes simple) prosperity and fulfillment.
The problem, of course, is that none of us have any experience with anything like that, and so we eventually give up on the dreams of our youth, and we reflexively put our noses on the nearest grindstone and seldom look up to see the possibilities of our lives.
So how does financial planning fit into this? Financial planners, those who occupy the leading edge of coaching and life planning and fiduciary navigation through our complicated financial system, are opening peoples’ eyes to this ancient promise. When they help clients articulate what they want out of life, and help them get there, they are moving their clients through that door from a subsistence mindset to a fulfillment lifestyle.
Financial planners are becoming the midwives of the birth of something much better than any species on this planet has ever known: an age where people routinely pursue fulfillment the way so many today pursue a shallow, generally undefined, usually competitive goal of ‘success.’
At its purest essence, financial planning services are designed to transform vague definitions of success into the concrete achievement of fulfillment. If you look at the world this way, it is not hard to see how financial planners are moving us closer, one client at a time, to this coming Age of Fulfillment. If I’m right, there will come a day when, whenever someone sees a person living a happy, fulfilled life, the first question they’ll ask is: Who is your financial planner?
I gave a speech recently, where I said that in my years in the profession, the best guide to knowing where the profession is going is to figure what is better for the client—and bet that that will eventually become a trend, increasingly adopted by financial planners as a competitive advantage in the marketplace. We’ve seen it with fee-only, with fiduciary, with life planning and coaching.
I don’t know of any other aspect of the world economy, anywhere, where a group of professionals routinely ask themselves that question (What can we be doing better for the people we work with, even if it might work against our own interests in the short run?).
I’m confident that if that question continues to drive the financial planning profession’s ongoing evolution, that it will also gradually–one client at a time, one service innovation at a time–nudge the larger business and human community—indeed, our whole society—to newer and better places.
After all, it already has.