The Fraud of ‘Personal’ Financial Planning “Personal financial planning has failed and continues to fail”

The Fraud of ‘Personal’ Financial Planning

“Personal financial planning has failed and continues to fail”

• the reality: so called personal financial planning is really but financial planning applied to personally held assets
• there no metric of client perceived success other than assets under management as the Trojan horse for personal financial planning success
• there is no metric of what retention should be –(i.e. a contra intuitive standard by what year should be out of the engagement -   whoops – no mas AUM?) (assets under management compensation %)
• AUM is contrary to the underlying foundation of ‘personal financial planning’  comprehensive and holistic. With the emphasis on assets under management per a loose thread of a sweater analogy – only the presentational thread (AUM) is tended to – though other parts of the sweater may be falling apart.
• The retort – ‘this is the way ((AUM)) it has been done’ forgets Tom Paine’s admonition, ‘a long habit of doing the wrong thing gives it the superficial appearance of being correct.’
• This ‘personal’ financial planning is a Trojan Horse for financial planning of personally held assets (not the person) – a misnomer.
• This financial planning of personally held asset – abdicates the thirst for meaning – the will to meaning per Victor Frankel - aligning personally held assets to client’s person mission and values especially in two of two major market: a) 55+ seeking what next, significance, making a difference, the next chapter) and b) and the millennials who, are not FIRE devotees seeking the financial wherewithal to drop out (but without fully preparing for ‘to what, and what for’)

For those AUM apologists, know this. My dad was a Trojan wholesaler. I inventoried Trojans for my dad. I know Trojans. I know personal financial planning and AUM is not personal financial planning but rather a Trojan Horse woofing personal financial assets in leaky unnatural Lambskins™ clothing.

if you are kind when you should be cruel

you'll be cruel when you should be kind

Judaic thought

Local, Global & Loco (In Loco Torment Us)

Local, Global & Loco (In Loco Torment Us)

We will do and we will hear

Exodus portion Mishpatim

Local – restricted, limited, narrow, confined, micro

Global – comprehensive, restricted, inclusive, macro

Loco – kooky, wacky, bonkers, looney, cockamamie, mentally disturbed (mentally challenge PC for snowflakes)

We will say we hear and we will ignore & complain

Apologies to Torah portion Mishpatim

Story:

          Years ago when I was in a fee only personal financial planning practicing/evangelizing the concept of ENOUGH, even then, an investment, which several of my clients were in, went down to fraud. Despite due diligence done by several pension plans, admission of this asset for surplus by the National Association of Insurance Commissioners etc etc – fraud was committed – and the investment became worthless.

          Other planners – all MORE planners, heard it from their clients –  to the tune of ‘why did you put me into this investment in the first place’ and blaming, complaining, bitching, kvetching at these planners about this ‘their investment.’

          Yes, my clients who invested called. Their question – I believe the right question – was ‘do I (we) still have Enough?’

          The distinction – the MORE planners practicing More – had a focus on which one, what kind (investment) therefore managing assets – not managing goals. This ‘which one, what kind’ investment  is  ‘local’ focus – which results in these ‘loco’ reactions.

          Enough focuses – spotlights -  on each goal – enough relative to each objective – the global goals.

Local vs Global

          Stipulation: $200,00 portfolio – regardless of the foolishness of not putting the $200,000  into the context of a goal – after tax, after inflation, start date and duration.

          The individual invests $5,000 in a stock and it goes to $2,000. The 60% loss is local and the focal point/spotlight of the individual. However, if the individual focused on the $3,000/1.5% loss relative to his or her $200,000 portfolio would he or she be as ‘loco’ with this global perspective?

          ‘MOREon,’ particularly managing assets under management compensation in personal financial planning, filters the focal point to the local rather than the global aggravating the already ‘loco’ behavior & reaction of clients.

          Recently there was a 1000 point drop in a day in the Dow Jones Industrial Average. Questions of nominal versus relative decline (4% decline) aside let alone the fanning of the loco flames by the pornographic personal financial media, individuals were kvetching bitching, complaining about their individual stocks & their portfolio (not their objective) to their planners. In the defense of the planners (a rarity for me) even though they are parasitic Moreon’s collaborating in the local not global perspective, not one of the hosts (the Moreon individuals) called any of these planners I’ve subsequently talked with over the next week or so when the Dow Jones recovered the 1000 points plus a couple of hundred points in addition –to say thank you for calming me down let alone apologizing for being ‘loco’. 

          Not one.

          Local -not global- is ‘loco.’

Friends of mine, who were not clients, were ‘loco.’ Not one of them that had called and complained kvetched and bitched during the market decline called even after the market recovered in a week or 10 days – to apologize or let alone even recognize the recovery. Not one even though they each have had a copy of my book Enough.

          Not one.

         

          Thus, a title this cockamamie syndrome of Local Loco MOREons – In Loco Torment Us©.

We will ignore, kvetch & complain & not hear of it

Again apologies to Torah portion Mishpatim