Strangely, that is a trick question. If you look at the regulation and training you will find that the pieces of those do not address the question. That difference arises because people want, or seem to want, advisors to be tactical. Methods and products, instead of strategic, vision and mission and goals.
In my view it is difficult to be a good financial planner, or more generally a good anything, without a strategic overview.
Here is a short, and probably incomplete, list of strategic characteristics that good planners seem to share.
- They are curious and enjoy solving problems.
- They can deal with problems that address people rather than inanimate structures.
- They understand the problem in the sense of knowing what has to be done.
- They can define the problem so that they can see how the solution methods attach specifically and efficiently.
- They understand the idea of data relevance. They can use Boolean logic, perhaps intuitively, to eliminate some of the conditions and factors that are not important or are even irrelevant to the problem.
- They have the ability to see the path of least effort or risk or time or cost. Clairvoyance or experience?
- They understand the idea of a candidate solution and are willing to redo the solution if the candidate proves inadequate.
- They love the “What if” and “Why not” questions.
- They can reduce a problem’s solution to a set of procedures, products or techniques that address it fully.
- The solutions are measurable and revisable.
- They have a the necessary skills to assess and implement complicated or complex solution packages, products or concepts.
- If the problem cannot be dealt with in its entirety, they have abstraction skills that allow them to address the parts they can and model the rest.
- They are good communicators. No plan survives if the people do not understand each other. Communication includes listening.
Feel free to add to the list or to discuss reasons that some of the points need not be there.
Finally think through how valuable would be #11 if the others are missing or even poorly developed.
Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.