This year marks the 50th anniversary of the birth of financial planning. On Dec. 12, 1969, 13 men gathered at Chicago’s Hilton O’Hare Airport Hotel with “a sense of shared mission: to raise the level of professionalism in retail financial services and to make ‘financial consulting,’ rather than salesmanship, the driving force of their industry.” (The History of Financial Planning: The Transformation of Financial Services, E. Denby Brandon, Jr., and H. Oliver Welch; John Wiley & Sons, 2009).
Organizers Loren Dunton and James Johnston contacted a wide range of people in financial services, but as with any new idea, only a few inquisitive and service-minded people are likely to show up, in this case 11 men, primarily insurance and securities salesmen, paying their own expenses to birth what became a profession.
Loren Dunton, who I came to know, had been a seller of vacuum cleaners and encyclopedias, transitioning to financial consulting and mutual fund sales. Dunton told a story of traveling around Europe with his family. People asked him, “Why, if America was such a great country, its citizens had to rely on the government and Social Security for retirement?” Pondering his future, Dunton thought that we had to improve the way financial products were sold and bought in America.
James Johnston, a former life insurance salesman and seller of school supplies with an interest in education, shared Dunton’s vision regarding financial services. Concluding two days of meetings, the Chicago group resolved to form a membership organization and an educational organization.
The membership organization, open to anyone in financial services, became the International Association for Financial Planning (IAFP) in 1972.
The educational entity emerged as the College for Financial Planning, with Johnston as the first president. In 1972, the Certified Financial Planner designation (CFP) was introduced and 40 men and two women graduated with the first class in 1973.
Since the IAFP was open to anyone in financial services, some of the first graduates from the college decided to create an alumni association strictly for credentialed CFPs, founding the Institute for Certified Financial Planners (ICFP). Yours truly graduated in the third class from the college, attaining CFP certification in 1975. Forming an independent financial planning firm with a partner in 1976, I was a member of both the IAFP and ICFP. In those days, a volunteer paid all of his or her expenses. The “tuition” was worth every penny given the opportunity to know and learn from pioneers and visionaries as a profession was being built.
In 1980 I was asked to join the national board of directors of the ICFP, serving for eight years, including national president, 1986-1987, and chairman, 1987-1988. For any young person dedicated to growth in his or her profession, voluntarism and leadership is one of your most valuable advancement strategies, affording the opportunity to learn and grow with the best and brightest. It takes time and, often, money, but go for it!
In 2000, the IAFP and ICFP merged, forming the Financial Planning Association (FPA). The Georgia chapter of FPA is one of the largest in the country.
As CFPs grew in capability and wisdom along with the Age Wave and economic cycles, and as planners and clients wrestled with real world challenges, Loren Dunton’s vision was refined to encompass “financial life planning.” Merging ideas from life coaching, behavioral finance, and theories of stewardship and spirituality, concepts of one’s relationship with money emerged.
Mitch Anthony, an early proponent of financial life planning, speaker, author of “The New Retirementality” and myriad other books, asks you, dear reader, to ponder the question, “Several years from now, what does your life have to look like in order for you to feel a sense of well-being, that you’re making progress, and that you have the freedom to live life the way you want?” Anthony posits that it’s not return on investment (ROI) that counts, it’s return on life (ROL).
Today we see the terms “holistic” and “comprehensive financial planning.” In the 2012 inaugural “Life Planning” column for the Journal of Financial Planning, this writer opined, “The World English Dictionary defines holistic as ‘of or relating to the medical consideration of the complete person, physically and psychologically, in the treatment of a disease.’ In financial planning parlance, holistic means a plan that goes beyond money, a comprehensive life planning approach that integrates finances into a bigger picture. What is important to the client, and how do we build a financial and life transitions plan around that? Like a holistic physician, we wish to combine meaning with money in framing strategies that consider the whole person and family.”
Loren Dunton, who died in 1997, would be proud of what his idealistic and prescient vision has become.
Happy golden anniversary, financial planning!
Lewis Walker, CFP®, is a financial life planning strategist at Capital Insight Group; 770-441-3553;firstname.lastname@example.org. Securities & advisory services offered through The Strategic Financial Alliance, Inc. (SFA). Lewis is a registered representative and investment adviser representative of SFA, otherwise unaffiliated with Capital Insight Group. He’s a Gallup Certified Clifton Strengths Coach and Certified Exit Planning Advisor.