In the December issue of the Journal of Financial Planning, respected financial planning leaders David Yeske and Elissa Buie make a strong case for “Evidenced-Based Financial Planning.” They write: “The scientific method provides a framework for validating the profession’s best practices, so that practitioners can have confidence that their ‘best practices’ are based on the ‘best evidence.’” The Money Quotient Team applauds M.Q. Licensees Dave and Elissa for this important message! We consider it to be a must-read article for all who are concerned about the future of financial planning and want to contribute to building its legacy.
“Evidenced-Based Financial Planning: To Learn . . . Like a CFP”
“CFP® practitioners have an urgent need to develop basic financial planning theory. Without underlying buttressing theory, how can we practice as a profession?” This is not a new observation. In fact, Dick Wagner made that opening declaration more than 20 years ago in his seminal essay “To Think … Like a CFP” (1990). Nearly a decade later, Warschauer (2002) could still observe that “as one approaches the content of financial planning (CFP Board’s 101 topics) from a view of higher cognitive level, it becomes clear that we have poor theory to guide the practice of financial planning.” The contemporaneous assessment of Black Jr. et al. (2002) was no better: “The PFP field has evolved largely devoid of a theoretical foundation” and “we know of no respected profession without academic underpinnings and recognized academic standing.” More recently, Wagner (2007), while revisiting the theme of financial planning becoming a “learned profession,” suggested that “for the most part, we have not closely examined our presuppositions, often settling for bland aphorisms rather than critically examining our assumptions.”
If we do, in fact, aspire to the status of learned profession, then financial planning has surely reached the point in its development where the way forward urgently requires us to move decisively from observation to corrective action. Specifically, we propose that the time has come to commit ourselves as a profession to a more scientifically grounded and evidence-based approach to expanding our body of knowledge and assessing and adopting best practices. Read More: Evidence-Based Financial Planning – To Learn . . . Like a CFP
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