How Financial Planning Got Crowded… and Confusing

Back in our July 28 issue, we talked about how every piece of your financial life connects -even when it doesn’t look that way on the surface. That was about your finances. Today, we’re taking a different angle: how the profession of financial planning has ballooned in scope, and why the way advice is delivered hasn’t kept pace.

When financial planning formally emerged in the late 1960s and early 1970s, the work was relatively narrow. The College for Financial Planning was founded in 1972, and the first Certified Financial Planner™ designations were awarded in 1973. Many early planners were investment professionals or insurance agents expanding their role, but the core focus was straightforward: build a portfolio, run retirement numbers, maybe check on insurance.

By the 1980s and 1990s, the scope widened. Tax-advantaged retirement accounts multiplied. College savings plans arrived. Estate tax changes pulled more households into planning conversations. The internet opened a new era of widely accessible financial information for anyone willing to read about it. Firms began marketing “comprehensive” or “holistic” planning – the promise of one relationship tying together every part of your financial life.

In reality, the promise outpaced the delivery. The work got more complex, but the structure didn’t fundamentally change. Most households, whether they have significant assets or are just trying to build a small nest egg, still deal with separate professionals: a financial planner, a CPA, an attorney. These roles may be essential, but they rarely operate in sync. And if you don’t have an advisor at all, the gap is even wider. Tax software can file your return, but it won’t flag that a decision you made in July could quietly wipe out a credit next April.

Meanwhile, the profession keeps adding more to its plate. Medicare planning, Social Security optimization, tax-arbitrage strategies, alternative investments, private equity, crypto in retirement accounts – each area comes with its own rules, jargon, and risks. The learning curve is steep even for those working in the industry.

Some firms are experimenting with integrated models that combine investment, tax, and legal advice under one roof. That might be where planning is headed, but it’s not standard practice – especially in large, traditional institutions. For now, the reality is that consumers are left managing the seams themselves, often without realizing how much falls through the cracks.

The bottom line is that financial planning hasn’t just gotten crowded, it’s gotten confusing. More tools and strategies mean more potential benefits, but also more ways to miss something important. Understanding that and asking, “what else could this decision affect?” is the first step toward not getting lost in the sprawl.