The Value of Financial Planning—A Theoretically-Grounded Approach

Abstract

This paper lays a foundation for quantifying the interaction “value” effects of the financial planner/client relationship through the lens of Financial Planning Client Interaction Theory (FPCIT), utilizing integration—a mathematical process commonly used in calculus to find the area under a curve. FPCIT recently emerged in response to practitioner and researcher calls for theory specific to the financial planning profession. FPCIT posits that the distinction of the professional practice of financial planning and its value to consumers is centered upon the unique and complex human interaction phenomenon inherent in the client relationship. FPCIT extends the value of financial planning discussion by offering a theory-based vantage point from which the profession can analyze the origins and synthesis of value within financial planning practice. The implications of FPCIT and the valuation method presented in this paper underscore the relevance of financial therapy, counseling, and psychology in expanding the financial planner’s skillset beyond technical expertise.