Why Planning Fails: Four Key Obstacles and the Confidence Formula Solution

Fithian, Scott; Fithian, Todd
September 2007
Journal of Financial Planning;Sep2007, Vol. 20 Issue 9, p82
Academic Journal
Most seasoned planners have experienced clients who failed to implement a well-designed plan. This article examines why planning sometimes fails and how planners can reduce such failures. To follow through with a plan, the client, or wealth holder, must have confidence in the planning. That requires four distinct elements: trust, clarity, competence, and management. These four elements compose the Confidence Formulaâ„¢, an equation for creating positive planning results. Trust may be the most difficult of the four elements to achieve with wealthy clients because they're constantly approached by people who want something from them. Trust is more than chemistry." Advisors also need a method for measuring trust. The client must have sufficient clarity about what he or she is trying to achieve. Especially among the affluent, the question is not the money but what to do with the money. They must be emotionally excited about their goals. That emotional clarity must be documented, and that documentation shared with the full advisory team. The client must be confident about the technical competence of the advisory team. This is usually the least common reason a plan fails. Lack of management can undermine a plan. One advisor or firm must take complete ownership of the wealth holder's ability to first achieve clarity and then achieve implementation and ongoing management of the result. Clients aren't looking just for solutions. They may not even know what the problem is. They first need clarity about the problem so they can confidently select a solution.


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