They wear flip-flops, khaki shorts and—for many-shiny new wedding bands. Some of them have been in the industry for nearly a decade now, while others are as new as their crisp college diplomas—the first cohort of sheepskins to read "Financial Planning" as the indicated major. Each is under the age of 37 and either has or is working toward earning a CFP certification.

But the conversation has changed among the NexGen members who attended their third annual meeting in mid-July. As the tight-knit group of 120 gathered in a secluded quad at St. John's University in St. Cloud, Minn., the energy of these young entrepreneurs was infectious. It's clear that questions of how to break into the industry have transformed into talk of succession plans and career paths. And while the NexGenners continue to wonder how they can expand their role in the industry, you may be surprised by how they plan to do it.

"If you take a look at the generations before us, the sense of community there is strong, and the NexGen conference helps strengthen that sense of community for us," says Mike Branham, NexGen president and financial planner at Cornerstone Wealth Advisors in Edina, Minn. "One of the main issues here is: Do younger people deserve or want equity within the firms where they work?"

The Path to Equity

Sarah Bailey began her career working as a financial analyst for a litigation consulting company. She did not find the work rewarding, though, and decided to take a job as a financial planner for wealth managers Kochis Fitz (now renamed Aspiriant) in San Francisco. By March of 2005, Bailey had earned her CFP certification. She quickly transferred from the operations group to wealth management. Within a year, she became an associate wealth manager, meeting clients and sitting in on board meetings.That's when her position in the firm turned a corner.

As Kochis Fitz began planning its merger with Quintile Wealth Management, a Los Angeles-based firm, a firm executive asked Bailey about her future plans. "Previously, ownership was only for those at the seven- to nine-year mark," she says. "I wasn't there yet. But the merger was announced in November 2007, and the path to ownership was laid out. It was all about being in the right place at the right time."

So on the same day Kochis became Kochis Fitz/Quintile, Bailey became a principal of the newly formed firm. Her buy-in was 100% equity financed, and her payments are deducted from her salary.

Stumbling Blocks

But for many of these ambitious newcomers, the path to ownership is far from streamlined. A group of NexGenners gathered at the conference to discuss succession planning and the barriers to ownership they see. While many told stories of older partners having difficulty letting go, others wondered whether they were ready for the financial responsibility of ownership. "You have to ask yourself, 'Are you the catalyst of change?' I think the second generation of this industry in some way has to be," says Brent Beene, a 31-year-old wealth manager at RegentAtlantic Capital in Chatham, N.J.

It's no secret that these young planners have come into this business on a different path than their elders. While many arrived with advanced education and technical knowledge, they may lack the competitive mentality of the generation prior, who fought to create and legitimize the industry. What's more, many newcomers' lack of wirehouse training has left them without a sales background they know to be essential.

"Once we get a practice, we have to prospect, run a seminar. How do we do that?" asks Vincent Barbera, financial planning director at TGS Financial Advisors in Radnor, Pa. "The people who created the firms that we work for are the ones that survived, and we're coming in without the same skills. That's our weakness. I'm not sure if they see that weakness."

For Jason McGarraugh, the road to taking over a practice was quite a bit different. After receiving his masters in financial planning at Texas Tech University, he began interviewing at Lincoln Financial in Dallas. The firm's owner had Parkinson's disease and needed someone he could trust with the future of his company. McGarraugh interviewed for nearly two months for the position. Then, on the day of his last interview, the owner's daughter decided to join the family business. Needless to say, she got the job—and McGarraugh was back to square one.