Re-Defining the Financial Service Firm:  Creating a Theory-Based Practice.


The term “retirement” was foreign before the twentieth century.  Retirement did not become a popular slogan until after the Social Security Act of 1935 (Ellis, Munnell, and Eschtruth, 2016).  Seventy-three years later, during the financial recession of 2008-2012, a firestorm of questions emerged regarding the financial service industry's methods of managing money for retirement plans. Adding to the dilemma, the millennial generation, classified as those individuals born from 1980-2000, now outnumbers the baby-boomers and represent over one-quarter of our country’s population (Cutler, 2015).  The general problem many financial service firms face today is people are demanding better financial advice and more investment options from their financial service practitioner.  Yet, the financial planning firms today continue to promote the same non-theoretical based advice proven to be unsuccessful during the last recession.  The specific problem facing today's financial service practice is the lack of a research-based foundation.  What the financial service practice needs are evidence-based research tools to assist clients to meet their goals (Klontz, 2016).  If financial planning firms want to stay relevant to serve the millennial generation and beyond, they need to form partnerships with researchers and academicians to establish a theory-based practice.   
                                                              References
Cutler, N. E. (2015). Millennials and finance: The “Amazon Generation”. Journal of Financial Service Professionals, 69(6), 33-39. Retrieved from https://www.financialpro.org/pubs/subs/journal/docs/2015/JFSP1115_33-39.pdf.
Ellis, C., Munnell, A., & Eschtruth, A. (2016). Falling short: The roots of the coming U.S. retirement crisis. Challenge, 59(2), 126-147. doi:10.1080/05775132.2015.1138061
Klontz, B. T. (2016). Why financial planning research doesn’t matter (And what to do about it). Journal of Financial Planning, 29(10), 42-44. Retrieved from https://www.onefpa.org/search/Pages/journal-results.aspx?IssueDate=October 2016

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