The Importance of Practice Management to Planners, and Clients

I just returned from San Francisco, one of my favorite cities in the world, after attending FPA Business Solutions conference. This gathering is my favorite event of its kind because it speaks to a very core element for today’s financial planner: what do I need to know to make my practice better and more importantly, how do I implement it?

All too frequently, our profession (and many others) concentrates on knowledge and general operating strategies, but spends little time teaching and training practitioners on how to survive, and as importantly, thrive, in the business aspect of their practices. This conference is dedicated to helping planners stay abreast of the latest developments in technology and marketing and also brings speakers who can address client management techniques or provide thought-provoking ideas for other key areas of running a practice. This is not a one-time event or learning curve for planners. Technology is rapidly changing and the correct choices can make the difference between being efficient and profitable—or neither one.  We also try every day, with little to no guidance, to be excellent employee relations managers while, at the same time, being savvy, well-informed financial planners. There are experts and shared knowledge that can help us avoid the pitfalls of everyday business management.

Professionals in the medical and legal fields have often conveyed that they wish that their schooling had specifically addressed how to actually structure and operate a practice. They recognize that in many cases, this could have expedited or increased their success, and reduced the stress that resulted from poor or limited business training. And there is plenty of research to suggest that a stressed practitioner, in any field, is a less effective provider of services and one who may be more prone to making mistakes. Do we really want our surgeons (or airline mechanics, for that matter) stressed out about basic business operations? I don’t think so...and the same should be said for our financial planners.

I agree with many who say that there should be more emphasis and credit given to recognize “practice management” as a core educational requirement for becoming a better financial planner.  For the Certified Financial Planner community which is the core of FPA’s membership, the responsibility lands with the CFP Board.  I realize this idea has been considered over the years, yet challenges primarily tied to the examination and recertification process, among others, make it difficult for the CFP Board to recognize practice management for continuing education. 

The world is changing rapidly with the development of more and more maturing and sophisticated financial planning practices.  The evolution of our profession raises the question and conversation of how a commitment to running great practices gets recognized.  Would an enhanced continuing education requirement, including practice management hours, ultimately benefit and better assure the public that there is a stated devotion to well-established businesses for the future generations needing financial planning services?  It makes sense to me.  And I can assure you that FPA will be part of the conversation and the solution in the months to come. 

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