Finding the Planning in Financial Planning: An Integrative Framework for Strategy-Making by Financial Planners

Abstract

This is a doctoral dissertation. Personal financial planning is an interdisciplinary practice that draws many of its tools and techniques from the fields of finance, economics, law, taxation, and investment theory. The profession’s body of knowledge is dominated by research devoted to these practical and theoretical “sub-sets.” What has largely been missing to date is any significant theoretical work devoted to the actual planning activities of financial planners, wherein they develop comprehensive strategies for using all of a client’s human and material resources to achieve their various life goals. This dissertation for the first time offers an integrating framework for describing the strategy-making activities of financial planners. This framework consists of five modes of strategy-making that fall along the dimension of relative involvement by the planner and the client in the planning process. These modes can also be shown to fall along a parallel dimension that might be described as “planning versus emergence,” with traditional, deterministic planning techniques employed at one extreme and more contingent, open-ended approaches found at the other extreme. It is found that the approaches that are most balanced along both dimensions are also most highly correlated with client trust and commitment. It is also found that distinctive combinations of strategy-making modes are found in different practice environments.

Keywords: dissertation, strategy, planning, financial planning, personal finance, financial advice, financial advisors, client trust, relationship commitment, relationship marketing, marketing

JEL Classification: D00, D1, D11, D12, D18, D31, D83, D91