Happy Friday Reader ☀️
I think the future of financial planning is incredibly bright.
Not because technology is going to replace financial planners.
Because it’s going to eliminate a lot of the work that gets in the way of actually helping people make better financial decisions.
Think about how much of traditional financial planning has involved gathering statements, collecting account balances, inputting data, updating spreadsheets, building projections, and manually trying to piece together someone’s financial life.
More and more of that can be automated.
And that means the conversations we have can become much more productive, personal, and relevant.
The same thing is happening with the actual analysis.
Portfolio management, retirement income planning, Roth conversions, Social Security, tax planning, required minimum distributions, and even estate planning decisions can increasingly be modeled using incredibly advanced planning software.
The technology can do much of the heavy lifting behind the scenes.
So what does that mean for financial planning?
I think the 70-page financial plan is dying.
And that’s a good thing.
Most people don’t need a giant binder filled with assumptions and projections that becomes outdated six months after it’s printed.
What I think replaces it is something much more useful:
A live, ongoing financial plan that changes as your life changes.
Imagine logging into a simple retirement dashboard and immediately seeing:
Are we still on track?
How much income can our plan support?
How much of that income is protected?
What decisions do we need to make next?
And most importantly, is there anything we should be doing right now?
That last part is what excites me the most.
Because the technology running behind the scenes shouldn’t just sit there waiting for your annual review.
It should constantly be looking for opportunities.
Maybe you have an RMD coming up and there’s an opportunity to make a Qualified Charitable Distribution.
Maybe your income is temporarily lower and it creates an attractive Roth conversion window.
Maybe the market has performed much better than expected and your retirement plan can now support more spending than you originally planned.
Wouldn’t you want to know?
Or maybe markets have struggled and your plan needs a small adjustment today to avoid a much larger adjustment later.
That’s where I think retirement planning is going.
Instead of scheduling an annual meeting simply because another year passed, your plan can tell us when something is actually worth discussing.
That means less time gathering statements.
Less data entry.
Less guessing based on incomplete information.
And fewer financial decisions being made in isolation.
Instead, we can spend more time talking about the questions that actually matter:
What do you want retirement to look like?
What has changed?
What opportunities are available right now?
And what should we do about them?
I also think this will eventually put pressure on the cost of financial advice.
When technology can automate much of the portfolio management, monitoring, analysis, and administrative work, it becomes harder to justify charging someone a very large percentage of their assets simply to “manage their portfolio.”
The value of a financial planner increasingly becomes the planning itself.
Helping you understand the tradeoffs.
Helping you make good decisions.
Making sure all the different pieces of your retirement work together.
And being there when the software identifies something that actually deserves your attention.
To me, that’s not a worse future for financial planning.
It’s a much better one.
More technology behind the scenes.
Less complexity for you to deal with.
And more time spent talking about the decisions that actually affect your life.
That’s the kind of financial planning I’m excited about building.
— Matt
P.S. As always, here is some new content I made this week