I have many ‘Hobby Horses’. A whole stable of them, in fact.

    But the one I want to allow a run around the paddock today is the concept that financial planning is not a ‘gold badge’, not an aspirational spiritual status, akin to sainthood, but is, in fact, a clear and deliberate business process, that ‘manufactures’ and maintains financial plans for clients.

    So a financial planning business is one that is designed to attract, ‘onboard’ and work with clients on the basis of the Six Step financial planning process.

    That means that the client proposition and the client experience will all be about financial planning and not – directly – products.

    But to be clear, there will be products involved, even if its just sense checking existing holdings for asset allocation, penalties, beneficiaries and so on and so forth. It may not involve the sale or transfer of any products, but there will almost always be products involved at some point.

    But to follow on from that point, the marketing focus will be about ‘Are we right for each other’, rather than ‘Its Isa season again’.

    But what really matters is that financial planning is a team sport. That means, as in any other team sport, people have different roles, supporting each other, and delivering the service and experience to the clients. 

    And there is the first issue. Its that ‘team sport’ dimension that makes it so very difficult, if not impossible, for any individual to properly deliver financial planning within an alternative business model, such as Investment Management, Pensions Consultancy or Accountancy. Not impossible, but more difficult.

    So, its arguable that many (though not all) ‘Financial Planners’ around the world are actually highly educated and ethical product distributors or wealth managers. Simply put, they do what they’re rewarded to do, which is advise on products or manage money. 

    I’m not saying this is wrong, but it’s not consistent with having a business model designed to deliver the six-step financial planning process.

    What is the Six Step process, and why is it so important?

    We could write a book on this, not just an article. But lets try to simplify this.

    We list the steps as: 

    1. Initial engagement 
    2. Discovery – hard and soft facts 
    3. Analysis 
    4. Design and present the plan 
    5. Implement the plan 
    6. Monitor and maintain the plan 

    This process is important because:

    • Step One is there to ensure that, as far as we can, we do not attract and take on clients who are unsuitable for the practice and for whom we are unsuitable. 
    • Steps two to 4 are together a clear, structured process that we can tell clients about in advance, monitor and allocate to the team to execute. 
    • Step five is then clear, and any advice is default suitable – we can see exactly what we should do and why. More importantly, so can the client, so that they can give informed consent. 
    • Step six is about a structured and meaningful relationship, not merely managing any money / being a postbox, or reminding them they need to do their Isa again this year (but we do that as well…). 

    Taken together, it’s a thought through and structured process. One where all members of the team can see their role, and we can train them to deliver their part of it. 

    It’s our ‘widget’., and like any other maker of ‘widgets’ we need to ensure we have a proven, robust and repeatable business operation to make 4 ½ inch widgets (other sizes are available) to the highest quality. Not making 5 inch or 4 inch widgets and cutting a bit off / welding a bit on.

    What business model are we heading towards?

    Financial planning business models of the next 5 and 10 years will be much closer to the below – and I’ve included some points for non-UK markets as well:

    • Multi-generational and diverse practices – simply reflecting the societies we live in. 
    • Include tax, legal and HR expertise. This is not a new idea, but these will be planner led, not merely as a means of cross-selling additional services to Accounting, Legal and other clients. 
    • The remuneration of the firm and of the team will be based on the value of the role, not client income or AUM. 

    Whilst much heat and some light has been expended on this subject, it has focused on how the firm charges clients.

    I’m much more focused on how the team are rewarded and recognised. The days of ‘Hunters’ being paid 60% or more of the income from ‘their clients’ must be coming to an end.

    • Niche – widely seen as experts in the facts, circumstances, needs and culture of their natural and chosen market. 

    To most, if not all UK based financial planners, this list will be unsurprising. 


    It’s my strongly held belief that all models are valid, its really all about ensuring that the business ‘does what it says on the tin’.

    That means that when clients engage with a firm that says it does Financial Planning, that business - the whole business – should then deliver the component parts to the client as a cohesive service and client experience.

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