FPA Annual Recap : Elevating the Profession

The last few years I’ve been unable to attend the FPA annual conference due to personal commitments. It was great to be back on site for this year’s event in Chicago.

The Future of the Industry

As an Official Sponsor of the Next Generation, we are tapped into what young advisors are doing, hearing, and saying. It’s an energizing group to be around—the future advisors I met in Chicago view financial planning as a calling as well as a rewarding career. It does strike me as a bit ironic that the “NexGen” community stops at 37 years old, when the average age of a graduate in a financial planning program (as shared during a conversation with university staff) is 41. I suspect these more seasoned career changers will have an easier time making their way into the industry, but it’s important to incorporate the youngest professionals into existing businesses, as they will impact the industry for decades, if they don’t get discouraged. This new generation of advisors are more dynamic and driven than they’re often given credit for, and these savvy younger professionals will continue pushing the status quo to create opportunities for themselves.

Taking Strides

There was a nice buzz in the NexGen Lounge, anchored by Hannah Moore, who was set up to record her podcast “You’re a Financial Planner, Now What?” Many attendees stopped in as Ms. Moore bridged the generation gap by recording conversations with advisors on both ends of the FPA community.

Many women are following her path in the industry, in spite of the fact that women in finance make 59 cents for every dollar a man earns in this industry. This statistic and others around women in finance were shared in a “NexGen Mini-talk” by Bridget Grimes, founder of Equita Financial Network, a platform she established specifically to help women start their own planning firms. Clearly, women advisors are determined to make an impact in the incoming generation of financial professionals.

Seth Corkin of Single Point Partners shared his firm’s shift from the standard fee on AUM model, and how he’s been able to grow his business and reduce conflicted advice by changing his fee structure. I’m optimistic that in spite of regulatory changes and fee compression that encumber established advisors, through moves and innovations like Seth’s, the next generation will continue to drive change in order make financial planning services valuable and accessible the public.

Looking Ahead

In the category of “still work to be done,” there continues to be a disconnect between industry leaders heralding a movement toward sustainable, multi-generational businesses, and a broad segment of advisors with a “book-builder” mindset. The difference was brought into sharp relief when comparing a pre-conference panel featuring Mark Tibergien to conversations held with advisors on the exhibit hall floor. The problem with this disconnect is that book-builders are seeing the headline but not reading the story: by definition, book-builders do not have a scalable, sustainable business, but they can be transformed if the owners shift their mindset and invest in changing their historic structure. Unfortunately, many book builders run a lifestyle practice and either don’t have or don’t make the time to work ON the business, as well as IN it.

There is nothing wrong with building a lifestyle practice—it’s a perfectly successful and satisfying model for many advisors and their clients—the challenge arises when a book-builder approaches recruiting and succession planning with the compensation and business structure they started the practice with twenty or thirty years ago. Many book-builders do not realize that recruiting a Next Generation advisor under their current model creates competition amongst founder and successor rather than alignment within an enduring business—however, it’s usually possible to optimize the business structure. In spite of the initial disconnect, these conversations were some of the most rewarding exchanges of the conference, as several book-builders had an “Ah-ha!” moment as we discussed their practice in detail—some for the very first time.

It was a pleasure to be back with the FPA group and reconnect with our colleagues in national leadership. The organizers have really picked up their game to make this a conference that can “elevate the profession that transforms lives.” I expect to see another iteration of improvements at next year’s gathering in Minneapolis.