A couple weeks back, I was sitting with clients who are on the eve of retiring and one of our last projects was the review of their current life insurance coverage. Trying to answer questions like “Do we still need it?” “Can we spend the money someplace else or have more fun with it than spending it on life insurance premiums?”
As fun as those answers will be, I was totally geeking out by one particular document they brought in for the meeting. It was an old school bound portfolio like you would have handed in for your book report in 7th grade. On the cover, it said “Planning For Your Future” and the ensuing pages were a basic presentation of the importance of savings and the power of compound interest. It was their financial plan put together in 1987!
The advisor who had put this together is still in business today and worked for Prudential at the time. I heard that back in the 1980s, Prudential’s salesforce was over 60,000 advisors. All well-trained and licensed to do financial planning, but mainly to help you buy life insurance. That was financial planning. Not right or wrong, but that’s what it was to be a financial advisor.
It may not be that that much different than medicine. One day red wine is good for your heart, so you go out and start drinking it at lunch and the next day that same idea is under scrutiny. However, some core beliefs seem to stay the same over longer periods of time.
Health – Eat right, exercise, get some sleep, keep most things in moderation and you’re doing pretty good.
Finance – Spend less than you make, plan for emergencies, don’t change your investments a lot, let Brian lose sleep for you and you’re doing pretty good.
It’s easy for me to look back and judge the merits of what was then “financial planning,” but the longer I am in business the more appreciation I have for all the advisors who came before me and did the hard work to plant the seeds for what is today the world of financial planning.
With luck, I can be a source of change and part of the evolution that will occur over the next 30 years…