You may have noticed over the past few months that brokerage firms have begun marketing themselves as financial planners as opposed to the mutual fund, insurance, or annuity salespeople from just a few short years ago.  Commercials during sporting events and or the nightly news have migrated from the beloved annuity Snoopy and the lovable Hartford deer to individuals discussing goals, success, planning, and security…  Clearly, the focus is financial planning and the buying public wants to know where they stand.  As a result, each and every zebra wants to quickly change his or her stripes. 

Here is the problem: not all financial planning is created equal.

In fact, brokerage firms and banks typically give away this service in an effort to view all your assets, and yes, sell you the products they are now trying to hide in the background. Independent planning is rare and therefore many simply avoid it. The idea that financial plans are created by brokerage firms or banks to push their products should not be lost on consumers. In many cases, these firms go as far as to create boilerplate plans that actually include product recommendations built in prior to even meeting with the client. The data the client thought they were gathering was supposed to be going towards their plan as opposed to a mechanism for their broker to sell them products.

Historically these plans made financial projections based on the market, which played into the hands of those selling market-based securities. These brokers have even created a phrase known as “a quarterly review” which was largely a mechanism that enabled them to sell clients more products. However, with 24/7 digital connectivity increasingly ubiquitous these days, the quarterly review seems even more out of touch.

What are brokers getting wrong?

Planning isn’t simply an app, a spreadsheet or an adjustable dial on a website. True planning involves a deliverable and a planner together to be available as needs change. Planning allows clients to have a clear idea of where they stand but also a partnership with an independent advisor to discuss life as it changes.

Independent planning flips the script on the brokerage firms and banks. A planning client doesn’t need a quarterly review, they meet with a planner when their plan changes. A planning client isn’t afraid to call their planner without fear they will be pitched a transactional product. A planning client doesn’t guess their asset allocation because their financial plan assesses their goals and matches their risk profile with their success probability. Most of all… a planning client is empowered because they truly know where they stand and didn’t have to do so by himself or herself.