More Bulls**t Jargon on its way?

by Tony Vidler.

Heaven help us...the financial services sector is apparently getting new jargon! Because we need it.

It can only be a matter of time before the new buzzworders suggest we also need new qualifications to qualify for the new buzzword, possibly with a recommendation for new acronyms to describe the new Jargon.

In the last 24 hours two interesting articles appeared on my radar screen suggesting that financial services - or more specifically, financial planning - has some new buzz words now because we need them.

Yeah, right.

In one story I read with interest that "Finology is the new buzzword in US Financial Planning circles". In the other, I read that "financial life planning" has arrived. Dammit....I think I'll have to call myself a Life Finology Planner. Actually, I thought the Financial Life Planning wave was rather late in being reported given it has actually been around for quite a few years now as a school of thought. Nevertheless, I am now reassured to learn that it has in fact arrived.

Finology though? More on that shortly....but it does sound rather like the scientific study of the back end of rockets doesn't it?

Let's begin with the tardy Financial Life Planning that took so long to arrive. Well this is the "core of a fast-growing American financial advice movement that is spreading across the world", and credited to George Kinder. According to one practitioner quoted in the story this discipline is about "connecting money with life rather than sitting down with people and telling them they need to buy a pension". The Financial Life Planner quoted contends that ordinary financial planning consists of planners attempting "to find an individuals secret sorrow".

This intrigued me, as I have never heard - from the hundreds of financial planners, or the many more hundreds of other types of financial advisers that I know who effectively do financial planning work - that the business is about finding someone's secret sorrow. Doing a little digging via Google around the financial planning world didn't reveal anyone focused upon uncovering sorrows or vast regrets for individuals either.

The focus of the Financial Life Planner is oddly enough precisely upon doing what your common garden-variety financial planners say they try to do: ask clients questions and get to know their aspirations, and then helping them to put together a plan that is most likely to help them achieve it.

So back to "Finology"...with full credit to my faithful assistant Google....it seems the founding Finologist is a chap called Richard Wagner, who claims credit for inventing this word. In an interesting article he says that the profession needs this new word because there is no word that describes the relationship between an individual and money in the English Language. What about "dependence" Richard?

Just as an aside; the word "relationship" itself is defined as "a connection, an involvement or an association". So conceivably the apparently missing word to describe a persons relationship with their money is "relationship"? Just sayin'...y'know?

Regardless, Wagner postulates that the profession's progress is limited by the absence of our own vocabulary to describe this link, and the term "Life Planning" is dismissed as being too broad a term to accurately describe what planners do. Ergo: Finology. Hurrah!

What a huge yawn....and that is just for those in the business. It will be an even bigger yawn for consumers.

The questions that arise whenever this sort of nonsense is mooted should be:

1. How will coining a new term to describe an existing professional competency help the profession or the consumers of its services?
2. Who is this term being developed for? (i.e. for whose benefit?)
3. If the new term is to be valid, how is it really differentiated from existing disciplines?

When reading of these latest hot pieces of jargon sweeping the world of financial planning, I could not work out an answer to the first question. Neither of these buzzwords describe methodology or systems or competencies that apparently differ from what good planners - indeed, from what good financial advisers - already do.

The terms appear to be feverishly capturing the imagination of the advisory community only. Or not maybe. But there is no discernible cry for these "different approaches" from consumers, or even necessarily the majority of the advisory community that I can find. It does seem more likely that the driver is advisers struggling to articulate their own value proposition to clients - or desperately wanting to distance themselves from the image of being seen to sell anything.

Hello? You're in business. You ARE selling something. Do you honestly think that a new piece of jargon will obscure that? Even if that jargon is meant to convey you don't "do product" or somesuch?

The broad claim of differentiation between conventional financial advisers or planners and the Finologists or Financial Life Planners seems to be a disassociation from product recommendations. The buzzworders appear to be driven by understanding the real issues that drive human behavior, in order to be able to help behavioral and circumstantial change.

But then not use manufactured products perhaps. (This is not actually entirely clear though).

Funnily enough, the process just described is what you get taught in financial planning. It is also what you get taught in other financial services specialist training. It is what most professional financial advisers do every day with their clients. But you also get taught and learn how to use products as tools. 

Products are merely a means to an end. A New Zealand consumer who wants a fantastic holiday in London may well choose to work with a professional travel consultant. That person will inevitably recommend a mode of transport because even our best triathletes would struggle with the 18,325 kilometer run/swim/cycle leg, and probably not enjoy the holiday part quite so much. So a product (e.g a plane ticket) is often a necessary component of the advice. The advice however is absolutely centered upon how to achieve the goal of the fantastic holiday, and ensuring that the details required to make it work as seamlessly as possible, and to be as enjoyable an experience as possible are thought of and covered.

It is absolutely true that in times gone by - when the industry was young and still thought it knew everything - products were the center of the process. As the profession has learned and improved though, products are secondary. Advice is the key value component.

Financial advice is no different in reality to the example of the travel agent, and it doesn't require new labels or buzzwords or jargon to highlight that. Professional financial advisers do try to know and understand the "soft" issues - the needs, the aspirations, the goals of the clients. Often they have to help the clients actually define those things as many consumers haven't really done it. In putting together plans to help the clients achieve those aspirations and goals, products get used. But the products are tools.

The advice and the coaching make the difference. No matter how you label it.

The story on Financial Life Planning that caught my attention:

http://www.telegraph.co.uk/finance/personalfinance/investing/9319327/A-new-kind-of-financial-adviser-or-a-waste-of-money.html

More on Finology by the very Finologist himself....
http://www.worthliving.com/2010/08/seeding-the-garden-of-knowledge/


Like this?  Then share it with others...or visit www.strictlybiz.co.nz for loads more useful and interesting information.