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Financial Planning > College Planning

September Feedback

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The following letters are responses from a pair of readers to an article in the current issue of Investment Advisor. (Read the article here. Offer your own comments on this article, or any others, here.)

Letter # 1:

“Embrace the Middle Class” by Dr. Condon (Investment Advisor September 2004) correctly brings up many of the challenges of providing professional financial services to the middle class. It also reinforces my long-held contention that the prototypical CFP is ill-equipped to serve it.

I would submit this heretical premise: The vast majority of potential clients in this arena don’t need a financial plan. At least not one that costs $1,500 and takes three meetings to implement. They typically need four things:

Well-defined goals and objectives;

Protection from catastrophic losses;

A balanced budget; and

A disciplined, sustainable long-term savings and investment plan.

Certainly they will need advice and direction on other specific life issues, such as college planning, retirement planning and insurance as needs arise. But what most of these folks will end up with is what they need the most, and can afford: a solid plan of insurance protection, such as a $500K term policy, and a regular monthly investment plan of a couple hundred dollars into mutual funds. Even in a fully commissioned world, that would generate relatively small fees, maybe a couple hundred dollars per household, and a minimal annual trail. How many meetings and how much back-office planning time could a traditional CFP afford to give these folks?

As sure as there is a time value of money concept, all professionals operate under a “money value of time” dilemma. I believe strongly that other financial professionals, such as the family insurance agent, may well be best-suited to serve this sector. They have strong relationships in place, and quite often have access to some of the best support professionals in the industry through their home offices. I work for such a company, and can truthfully say that I’ve seen the full range of competence and incompetence. But I’ve seen the same in the RIA/CFP world as well. Dedication and professional commitment should be sought out in all cases. Sadly, however, groups such as the FPA continue to be “CFP-centric” and refuse to recognize the validity of rigorous designations such as CLU/Chartered Life Underwriter or ChFC/Chartered Financial Consultant. For this very reason, I continue to forego membership in the FPA.

As for the utilization of the internet to deliver to this market, I truly believe that would be a genuine disservice to the customer. The very concept that the middle class should be relegated to the ether-world and not interact with a breathing human being smacks me of elitism. While the internet is a tremendous tool, it’s not for everyone. And while you might be able to place vast amounts of information on the web, it’s tough to place a thimble-full of wisdom there.

As always, thank you for your great magazine.

Dick Beatty, CFP, CLU

Dublin, OH

Letter # 2:

Thank you for publishing the article by Kevin Condon, “Embrace the Middle Class” in the September issue of Investment Advisor Magazine. As a proud member of the Garrett Planning Network, I fully support working with the middle class. The financial planning profession has shunned this market for much too long. Objective, professional advice should be made available to anyone who needs it. I do not see significant changes in the profession until the consumer is educated about what financial planning is and starts demanding our services. Ask the average consumer who their financial planner is and you get a broad range of answers: their stockbroker, their insurance agent, their accountant, their attorney. Anyone can hang a shingle outside their door and set up shop as a financial planner. It’s time for the financial planning profession to clearly define what financial planning is, both to the consumer, and within the profession itself.


Nancy J. Lange, CPA, CFP

Hartland Tax & Financial Advisors


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