Wednesday, July 18, 2012

Henry Ford & The 'My Planner' Fallacy

You can have any car you want as long as it is black

There is custom, custom tailored, and accustomed.

            Most planners talk custom (designed) when the plan, at best being very generous in evaluation, is  custom tailored. The reality is most personal financial plans are what the planner (consciously or unconsciously) is accustomed to – to the detriment of the client.
And yet, the initial fault for this lies with the client!
How so?
While one can outsource the planning function via substitute reliance, the client cannot and should not outsource. The client must manage the planner – or in Reagan terms ‘trust but verify.’
            There is no parasite (the accustomed ‘Moreon’ planner) without a Moreon host.)
            The planning relationship of  ‘do it for me’ and if it doesn’t work ‘you’re at fault’ (even if I didn’t follow the plan because you were not persuasive enough) sets up failure to begin compounding the foolishness of ‘how did I do relative to the Dow’ (rather than how am I doing relative to each objective.) (1)
            Accustomed ‘moreon’ planner + ‘do it for me’ outsourcing moreon client = recipe for personal financial planning acri-money.
            Do it for me results in you did it to me.
            Thus, real personal financial life planners should be planning resources rather than planning guru leaders of the flock (2)
            Trust but verify.
            Planning whether personal financial and or business planning is a process which out of cost necessities is custom tailored. (Custom is very expensive). Given the aforementioned, without managing the planner – the result, too often will be what the planner is accustomed to – rather than custom tailored or customized. The management of the planner and planning process falls on the client. Just saying to the planner, ‘here tell me what to do’ is a prescription for just avoiding responsibility and setting up the victim blame game .
            In corporate planning, here is an axiom: planning cannot be done for a client, it is done by the client or it is just another pretty book up on the shelves

I’ve grown accustomed to your face
My Fair Lady

            Planners need to stop talking customized when what they are doing is what they are accustomed (we personalize, you can have any car as long as it is black). By the same token, personal clients must manage the process (holding the planner accountable per goal as defined by criteria with a minimum of quarterly review.) How did we did relative to the S&P is an asset management; how we are doing relative to the goal(s) that is the relevant personal financial planning question(1).
In corporate planning (especially since the outside or inside planner has no power) the process must be transferred and done by the corporation itself. That means the planner facilitates and transfers the skill transference to the individuals in the corporation who have the power to make the plans happen. Planning relative to corporations should be a self liquidating engagement (not an annuity) – as corporations should not become ‘accustomed to your face.’

You can have any car you want as long as it is black – only results in black eyes in planning.

  1. As personal financial planner manages goals (per your criteria); an asset management manages assets – don’t confuse the two. PS and if assets under management is how the personal financial planner is paid – what will take precedence ‘the goals’ or making ‘more’ regardless of the risk involved?
  2. The guru planning leader of the flock – usually results in the planner being defrocked.

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