When Harold Evensky started in the financial planning business he was doing “yellow pad planning,” literally using a yellow pad of paper and a pen to map out clients’ financial plans, he told our sister site, ThinkAdvisor, and publication Investment Advisor in April.
The industry was still young and along with limited options in technology, there were few advisors with planning expertise.
“I taught the investment portion of the CIP program at the University of Miami and in my class was a UPS driver and a French teacher,” he said in a joint interview with his wife and partner (and fellow IA 35 for 35 honoree), Deena Katz. “But that was fairly typical. I was an engineer who came from the construction business. Back in those days, everybody came from somewhere else; nobody started off in planning.”
Evensky, chairman of the wealth management firm Evensky & Katz/Foldes Financial and a professor at Texas Tech University, said that in those days, the focus was on comprehensive financial planning, but “it wasn’t a very good business model.”
He explained, “Someone would come in with $2,000 and say, ‘What should I do?’ And we would say, ‘Pay us so many thousand dollars and give us a couple of months, and we’ll tell you what to do.’ But we were believers back then that there was only one right way to do it.”
Over time, Evensky said, the focus in the industry has shifted from comprehensive planning to asset and investment management, and he predicts that in the future, advisors will offer “modular comprehensive planning” that focuses on individual portions of a client’s portfolio, building a comprehensive plan as they go.
For example, he said, when a client comes in, “Initially, our focus can be on designing a portfolio, investment policy statements and implementing.
But then, the next quarterly meeting might be, ‘OK, let’s review your tax planning. Next quarter, let’s review your estate planning.’ Over a period of time, we will indeed have done some comprehensive planning.”