Financial planning is both necessary and practical for every single person alive today. I'd say that it is something that no one – at least in a civilized and developed society – can ignore. People do often discount its importance or try to completely evade the issue altogether…to their own detriment.

One trend that I have noticed though, is especially disturbing. It goes something like this (and I am going to use an analogy to make my point):

Not understanding the problem is the problem – for the most part – in financial planning. Sadly, the popular notion of financial planning focuses heavily on the topic of investing and what it calls "money management" (which is a fancy way of saying "managing investments") and almost completely ignores the source of the investment – namely savings. And, to the extent that financial planning does acknowledge the concept of savings, it discounts the importance of the method used to calculate that savings – namely budgeting. And to the extent that it does recognize the importance of budgeting, it discounts the importance of the fact that that money has to be made – it discounts the process of wealth creation.

Any goals that are made are often narrowly defined within the area of whatever the financial adviser deems to be important – whether that be budgeting, savings, or investing. To a rather limited degree, there may be some goals made that encompass all three of these. Usually, but not always, there is an emphasis on the idea that the adviser can do something to the client that will solve the client's problems for him or her with little (if any) involvement from the client.

Unfortunately, rarely is there ever a discussion of the cause or causes of the underlying financial problems that the adviser is trying to help his client solve. Rarely is there a call for the client to solve his or her own problems. The perception being that the adviser's job is to solve other people's financial problems (an error that I could devote an entirely different article to).

By not digging down into the root causes of the financial problems people are facing, no solution presented by the adviser can be a permanent solution. And no adviser can take over the job of the thinking required by you to solve your own financial problems.

The truth that has been obscured since this profession began is that while individuals can solve their own problems, they may need guidance – and that is the job of a financial adviser. To help the client discover the root causes of their financial problems and guide them towards effective solutions. Whether part of the solution involves financial products or not depends on the circumstances of the client; their goals, wants, and needs.