What is Financial Planning?

Walt and I once had breakfast with a man who told us that he invented Financial Planning. In St. Louis, in 1976, I think. It was invented, he told us, purely as a way to sell insurance. He did not understand how we could be Financial Planners, but not fund the exercise by selling insurance.

After observing the world of Financial Planners for more than a decade as a vendor and working with Walt for more than a decade now, I am still amazed about how different our Financial Planning process is from most. While the sales people at banks and brokerage houses use many of the same words, there are core fundamental differences in how we define Financial Planning.

At Armor, we look at Financial Planning as an ongoing, iterative, proactive process. Walt often compares a Financial Plan to a pilot’s flight plan. It is a guide that helps you stay on course, but once in the air, the pilot makes countless adjustments for conditions which are on the horizon. Single shot, reactive financial advice is not without any value, but it is wholly different than ongoing, proactive guidance. As we have talked to ‘traditional’ Financial Planners, it has shocked us to see how many clients they are purportedly advising. We limit our number of clients per adviser to ensure that we can stay proactive.

Armor’s Financial Planning process creates a framework for helping clients make real life financial decisions. With a clear framework in place, it is easier for a couple to balance the tradeoffs of using a windfall to pay off debt, save for retirement, or enjoy life today. As planners we identify risks and rewards to frame a decision and the Financial Planning framework helps couples to be intentional with their decisions.

There are many advantages to being a boutique firm which does not have outside owners, but the most important is that we are not forced to evaluate the profitability of every relationship on a quarterly basis. Our long-term time horizon is aligned with our client’s time horizon. Armor does not sell any products to our planning and investment clients. Because of our planning process, which allows us to know our clients better, and because we have minimized conflicts of interest, we believe we are able to find solutions that are best for our clients. We are acting as a buyer for our clients instead of a seller.

Clearly, Armor’s answer to ‘what is financial planning?’ is different than the big banks and brokerages. As I wrote several months ago, we consider ourselves to be Financial Stress Managers, and we love what we do.

Nothing contained in this publication is intended to constitute legal, tax, securities or investment advice, nor an opinion concerning the appropriateness of any investment, nor a solicitation of any type and does not guarantee future results. The information contained in this publication should not be acted upon without specific legal, tax and investment advice from a licensed professional. Past results are not indicative of future performance.