Why Aren’t Checklists A Financial Planning Standard?

In the world of aviation, medicine, and engineering, checklists are non-negotiable. They ensure that pilots don't forget critical pre-flight checks, surgeons follow life-saving protocols, and engineers adhere to safety standards. Yet, in financial planning—an industry tasked with securing people’s lifelong financial well-being—checklists are surprisingly absent as a standardized tool. Why?

The Case for Checklists in Financial Planning

A well-designed checklist acts as a safeguard against human error and oversight. Financial planning is complex, involving tax strategies, investment management, estate planning, risk assessment, and retirement projections. With so many moving parts, even the most experienced professionals can overlook key steps. A structured checklist would help advisors systematically address client needs, improving efficiency, consistency, and client outcomes.

Consider how checklists could enhance financial planning in the following ways:

1. Comprehensive Client Reviews – A checklist ensures no critical component—such as updating estate documents, reviewing beneficiaries, or reassessing risk tolerance—is forgotten.
2. Regulatory Compliance – Advisors operate in a heavily regulated environment. A standardized compliance checklist could prevent costly mistakes.
3. Succession Planning – If an advisor retires or a firm changes hands, a checklist-driven approach ensures continuity in client service.
4. Behavioral Benefits – A structured process reduces the risk of cognitive biases, such as overemphasizing recent market events when making investment recommendations.

Why Aren’t Checklists Standard?

Despite the clear benefits, checklists remain underutilized in financial planning. Several factors contribute to this resistance:

• The "Art vs. Science" Debate – Many advisors view financial planning as an art rather than a rigid science. While checklists provide structure, they fear that excessive reliance on them may lead to a one-size-fits-all approach, ignoring the nuances of individual client needs.
• Professional Ego and Experience Bias – Some advisors believe that their expertise and intuition are sufficient. They may see checklists as unnecessary, even though research shows that structured processes improve decision-making in high-stakes fields.
• Lack of Industry-Wide Standards – Unlike aviation or medicine, financial planning lacks universally mandated checklists. While some firms develop internal checklists, there’s no regulatory body enforcing their widespread adoption.
• Perceived Client Complexity – Every client has unique circumstances, making some advisors hesitant to adopt rigid workflows. However, checklists don’t replace expertise; they enhance it by ensuring all critical steps are covered.

The Path Forward

If the financial planning industry is to improve, it should embrace checklists as a best practice rather than an optional tool. Regulators and professional organizations like the CFP Board and FINRA could take the lead in promoting checklist adoption, much like medical boards have done with surgical protocols.

Additionally, advisory firms should consider developing proprietary checklists tailored to their client base, ensuring a balance between structure and customization. Leveraging technology, firms can create dynamic, adaptive checklists that adjust based on client profiles and financial goals.

In an industry where mistakes can cost clients their retirement security, checklists offer a simple yet powerful way to enhance accuracy, consistency, and trust. The question isn’t whether financial planners should use checklists—it’s why they haven’t already become the standard.