One financial industry veteran, Charles Haines Jr., a CFP who is CEO and president of Kinsight in Birmingham, Ala., defines study groups as "the formalization of the networking process with colleagues in whom you have a lot of trust and respect." Haines, a member of the prestigious study groups Alpha and 20/20, believes it is no accident that, when conferences are evaluated, participants tend to rate networking among the top benefits. "Study groups are very important to our business at Kinsight," he notes.
Marilyn Capelli Dimitroff, CFP, president of Capelli Financial Services in Bloomfield, Mich., goes one step further. "I can't imagine running a practice without a study group," she says. "I would not be where I am today without being part of the Capstone Group." Capstone acquired its name from the Conference of Advanced Planners, a subgroup of the International Association for Financial Planners, one of the associations that merged to form the FPA.
Capstone was formed over a dinner involving members of the Conference of Advanced Planners and Financial Planning columnist Bob Veres at an IAFP conference in 1996. Except for Veres, the group has been together ever since. Currently, the 12 members of Capstone represent more than 1,200 clients in 10 states with more than $2 billion of investment assets and untold personal net worth.
The 800-pound gorilla in the study group world may be the aptly named Alpha Group. Founded in 1990, its 19 members form a veritable who's who of industry leaders and represent more than 5,000 clients with $10 billion of investment assets. Alpha includes prominent nonfinancial advisors like Don Phillips, president of fund research for Morningstar; Mark Tibergien, CEO of Pershing Advisor Solutions; and Mark Hurley, chairman and CEO of Fiduciary Network. Haines quips, "These three members give us practitioner members an objective perspective on ourselves."
If study groups are the formalization of the networking process, NAPFA has formalized the study group process itself. In 2006, NAPFA began encouraging and supporting study groups at the request of its members, a high percentage of whom are solo practitioners. Well aware of the existing peer support groups in the financial community, Nancy Hradsky, a former TV producer who is now manager of membership and business development for NAPFA, separated study groups into two categories.
The first category tends to involve informal local gatherings where ideas are exchanged among members who compete in the same market. There are about 50 such groups registered with Hradsky's office.
The second category, management information exchange (or MIX) groups, consists of geographically diverse members who are more willing to share intimate details of their own practices. There are 25 MIX groups, and assembling them can be a challenge. "It feels like putting together arranged marriages," Hradsky jokes. She helps prospective members find the right balance of similarity and diversity by collecting data on an array of criteria, such as:
* The firm's practice model (solo practitioner, an ensemble firm of a few advisors, or a larger practice).
* The experience of the advisors (one to five years in the industry, five to 10 years, more than 10 years).
* Geography (distance can help to alleviate concerns about sharing information with competitors).
* Fee model (assets under management, retainer, hourly, by project).
* Target client investable assets (less than $1 million, $1 million to $5√É?√Ę,?√Ę?°million, more than $5 million).
Recalling Groucho Marx's famous quip - "I never want to be a member of a club that would have me for a member" - Hradsky discovered that prospective members often want to be in a group whose other members have higher AUM amounts than their own.
Some groups are serious entities. The Capstone Group has formed a limited liability company with articles of incorporation and published criteria for new members. Capstone meets three times a year and usually brings in two outside speakers per meeting.
The last meeting featured a presentation on the federal health care law. At each meeting, three members present their current business plans for critique and feedback from the group.
CFP Faye Doria of Financial Guidance Associates in Dover, N.H., a member of the Garrett Planning Network, belongs to a group comprised primarily of hourly fee planners, none of whom have any assets under management. Aside from this commonality, the group strives for diversity in gender, age and experience. Members of the group, named MIX 13, range in experience from five years to 30 years and in age from 30-year-olds to 60-year-olds.