Contributions D UBOFSKY | S USSMAN The Changing Role of the Financial Planner Part 1: From Financial Analytics to Coaching and Life Planning by David Dubofsky, Ph.D., CFA, and Lyle Sussman, Ph.D. David Dubofsky, Ph.D., CFA, is professor of finance and associate dean for research, University of Louisville. He Executive Summary has published more than 25 academic journal articles and is the author of two textbooks. • This report is the first in a two-part completed some portion of the survey. Lyle Sussman, Ph.D., is professor and chairman of the study of the emerging role of coaching • Approximately 25 percent of the department of management and entrepreneurship, in financial planning. This first paper respondents’ contact with clients is University of Louisville. He has written 65 scholarly articles reports the results of our survey, which devoted to non-financial issues. About and 9 management books translated into 17 languages that support the thesis that financial 74 percent of planners estimate that have sold a total of 1 million copies worldwide. acumen is necessary for financial plan - the amount of time they are spending ning, but not sufficient. Implications for on these issues has increased over the training and professional development last five years. are extensively discussed in Part 2. • Most respondents believe that their ur research into the emerging • An online survey was sent to 38,810 non-financial coaching and counseling role of the financial planner as members of the Financial Planning makes them better planners and helps O life coach is presented in two Association and CFP Board mailing list their clients, but are less certain that separate reports. This first report focuses participants, to determine the non- these activities increase business. on the descriptive results of a large scale financial coaching and life planning • Planners help clients with critical issues Web-based survey, and provides empirical activities of financial planners. that reflect human drama and frailties: data clarifying the scope, trends, and • The primary research question for this religion and spirituality, death, family dys - coaching-related practices of financial study concerns the changing role of the function, illness, divorce, and depression. planners. The second report, which will be financial planner and the major implica - • Most respondents have at least some published in the September issue of the tions of that change for the financial training to equip them to help clients Journal (Sussman and Dubofsky, 2009), is planner of today and tomorrow. with non-financial issues, but 40 per - an extension of the descriptive summary • A total of 1,374 planners completed cent have had no training or profes - and focuses on the implications of our the entire survey, though 2,006 sional development in this area. empirical results for financial planners. This first report thus sets the stage for the second report. As a set, the reports answer the following overarching question: How is It reveals a 2,000+ word description of the the role of the financial planner changing nature of the work, training, and qualifica - and what are the major implications of that tions for this occupation. The results of change for the financial planner of today the survey we conducted suggest that the Acknowledgement: We could not have conducted this and tomorrow? Department of Labor’s description survey without the assistance of Rebecca King of the Finan - A description of the profession known accounts for only 75 percent of the actual cial Planning Association and Asha Williams of Certified as “personal financial adviser,” can be work financial advisers perform for their Financial Planner Board of Standards. Rachel Candelora found by visiting the U.S. Department of clients. The other 25 percent of the work provided valuable research assistance. We also thank the Labor Occupational Outlook Handbook involves dealing with non-financial participants in our focus group. Web page (www.bls.gov/oco/ocos259.htm). issues—human drama and frailties. 48 Journal of Financial Planning | A UGUST 2009 www.FPAjournal.org D UBOFSKY | S USSMAN Contributions In dealing with these personal, non- plans. Retiring baby boomers are thus dis - Research Questions financial issues, financial planners forge covering that managing a retirement bonds with their clients that we may charac - account is difficult at best and gut Because the study is exploratory in terize as special and endearing. There are wrenching at worst. nature we pose research questions rather precious few interpersonal bonds worthy of than test theoretically grounded this label. Examples include parent and Purpose hypotheses. Specifically, this study was child, minister and parishioner, teacher and designed to empirically answer the student, physician and patient. We posit Given the potential of the planner-client research question posed above: How is that the relationship between financial plan - engagement to be executed on an emotional the role of the financial planner chang - ner and client is also worthy of the label. minefield (Kahn, 2001), it is not surprising ing, and what are the major implications Discussing personal financial assets, that a body of literature focusing on the of that change for the financial planner personal life goals, and articulating plans planner as coach and counselor has of today and tomorrow? for achieving those goals relies on trust, emerged. This literature speaks to the need This major question suggested five corol - candor, and a client’s willingness to be and importance of the non-financial coach - lary questions: Executive Summary open and potentially vulnerable. These ing and counseling role of financial planners RQ1: Planners’ Perceptions of the characteristics are the essence of special (Kahler, 2005; Warner, 2006; Wagner, 2000; Coaching Role. To what extent do finan - and endearing relationships. “People who O’Neill, 1991; Matson, 2003), and the skills cial planners perceive their role as encom - • This report is the first in a two-part completed some portion of the survey. would not dream of seeking out a thera - required of this new role (Christiansen and passing coaching and counseling? Do plan - study of the emerging role of coaching • Approximately 25 percent of the pist, counselor, or clergyman for emo - DeVaney, 1998; Collier, 2004; Miller and ners see this role as increasing or in financial planning. This first paper respondents’ contact with clients is tional support may find themselves emo - Koesten, 2008). Two dominant themes decreasing in importance? reports the results of our survey, which devoted to non-financial issues. About tionally overcome or vulnerable when emerge from this literature. First, financial RQ2: The Issues. What are the most support the thesis that financial 74 percent of planners estimate that talking with a planner about a pending acumen is necessary for financial planning common personal, non-financial issues acumen is necessary for financial plan - the amount of time they are spending divorce, planning for death, or in the but may not be sufficient . “The most effective financial planners confront in their ning, but not sufficient. Implications for on these issues has increased over the aftermath of losing a loved one, caring financial planning will combine the cogni - engagements with clients? training and professional development last five years. for a special needs family member, or tive talents of the traditional financial plan - RQ3: Perceived Value of the Coaching are extensively discussed in Part 2. • Most respondents believe that their leaving a legacy” (Kinder and Galvan, ner with the emotional skills of a counselor” Role. Do planners perceive the coaching • An online survey was sent to 38,810 non-financial coaching and counseling 2006, p. 197). Thus, financial planners, (Kahler, 2005, p.62). Secondly, financial role as important for them, their clients, members of the Financial Planning makes them better planners and helps whether they planned for it or not, may planners must seek out professional develop - and their business? Association and CFP Board mailing list their clients, but are less certain that become personal coaches and counselors ment opportunities to increase their coach - RQ4: Coaching and Counseling Critical participants, to determine the non- these activities increase business. for their clients. ing and life planning skills. Incidents and Behaviors. What are the crit - financial coaching and life planning • Planners help clients with critical issues Moreover, given the demographic The literature supporting these two ical incidents reflecting the non-financial activities of financial planners. that reflect human drama and frailties: trends of retiring baby boomers, the themes, however, is primarily anecdotal coaching/counseling role of financial • The primary research question for this religion and spirituality, death, family dys - wealth they are likely to inherit from par - and prescriptive. Thus, we have case stud - planners? What behaviors do financial study concerns the changing role of the function, illness, divorce, and depression. ents or distribute to children, and deci - ies highlighting the financial planner and the major implica - • Most respondents have at least some sions regarding Social Security benefits emergence and impor - tions of that change for the financial training to equip them to help clients (Congressional Budget Office, 2003), tance of this new finan - financial planners