Applying a systemic approach for better outcomes

Abstract

This paper demonstrates the added value of utilizing a systemic approach to financial planning, which includes understanding how individuals make financial decisions and how these decisions are influenced by their experiences and the broader systems in which they exist. Systems theory is too broad of a topic to cover in one paper. The scope of this paper is to describe the key systems' concepts of interconnectedness, the whole is greater than the sum of its parts, homeostasis, and differentiation of self that have direct applications to financial planning. A case study illustrates how these concepts and tools, such as the genogram and shifting the conversation from content to process, can be utilized in financial planning. Through therapeutic communication (e.g., listening actively and recognizing the hidden cues in a client's communication), financial planners can uncover and address systemic issues impacting the financial planning process. Financial planners will learn key concepts of systems theory, gain tools for how to incorporate systems' concepts into practice, and be prepared to take an active role in the next evolution of financial planning.