Perspectives: The 2016 RMA® Practice Manual and the Updated Procedural Prudence map

The 2016 RMA® Practice Manual includes an updated Procedural Prudence map that updates the older map that non-members can see on our website.  Registrants to the pre-conference RMA CE program will receive a free printed copy of 2016 RMA Practice Manual because we will use it to teach the class.

Retirement planning in particular is similar to and yet different from financial planning in general. Retirement planning is a discipline of its own because its scope includes but also expands beyond investment management. It expands the body of knowledge to include, among other items, three risk management techniques besides the traditional technique of risk retention by the client hopefully defeased down to systematic risk through diversification.

Patrick Collins points out that the underlying structure of financial planning, as documented by Michael Kitces (http://www.financial-planning.com/news/kitces-does-planning-software-go-too-far-or-not-far-enough) is “product-centric” because “Financial planning was birthed in a world of selling insurance, investment products and, at the time, tax shelters.  The core topic areas for the CFP designation are based on a job task analysis of what planners do —which in turn is based on what planners sell in order to get paid.”

If financial planning is structurally product-centric, retirement planning must be structurally process-centric.

RIIA® is uniquely positioned to help you measure, benchmark and validate the quality of your retirement planning processes. RIIA’s mission is focused on discovering, validating and teaching the new realities of retirement planning and retirement management. RIIA’s View Across the Silos℠ provides built-in objectivity, validation and completeness that are critical in the benchmarking of quality in retirement planning.

RIIA’s Procedural Prudence map, a process-centric summary of the retirement body of knowledge, documents the current state of RIIA’s discoveries, validation and teachings. It is an important tool in RIIA’s efforts to measure the quality of retirement planning advice and detail levels of services because it sets the stage for one of three analytical steps that we perform when we evaluate self-service platforms, institutional software/telephone solutions, as well as full service advisory processes.

A fundamental problem in measuring the quality of both types of planning advice (financial or retirement) is that the effective, as opposed to the expected, implied or assumed, quality can only be measured a long time after it is given, years perhaps decades. We do not know the long term performance of the advice we received until it is observed and in the world of long-term investing and retirement planning this will be measured in years and decades.

This means that we need to find a proxy in the present that can benchmark the good from the bad in the quality of financial planning advice in general and retirement planning advice in particular.

RIIA uses a completeness process based on guidelines and check-lists as a proxy in the present to measure, benchmark and validate the quality of retirement planning advice. How complete is your retirement planning process? You can find out part of the answer by yourself if you trace its steps through the Procedural Prudence map.

You can use the Procedural Prudence map as one of three pre-advice check-lists in the same way that pilots use pre-flight check-lists before they start the plane’s engines and take-off for their intended destination.

To learn more, join us at the Summer Conference in Salem where we will present the latest developments based on the results of our surveys of practitioners who use the Procedural Prudence map.

Francois Gadenne
Co-Founder, Chairman & Executive Director
RIIA®

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