Peer networks can help grow next generation of advisors — and clients

Financial planners seeking to curb the profession's high attrition rate and connect with a new generation of clients are leaning on each other for support.

But finding that assistance can be difficult in a geographically dispersed industry with a legacy of excluding people from both wealth creation and rewarding careers. At this week's CFP Board Connections Conference in Chicago, panelists in two sessions said that professional networks dedicated to breaking those cycles could begin to address both challenges at once.

Formal or informal study groups of planners can help ease the field's looming potential shortage of financial advisors, said Saundra Davis, an educator and advisor coach who is the founder of Sage Financial Solutions and the director of financial planning programs at Golden Gate University. More than 70% of rookie advisors leave the industry within five years, according to a study by Cerulli Associates last year. Davis' study group refers to itself as a "mastermind" meeting, but it could also be called a "wisdom circle," she said.

"We each come with a thing that we're grappling with — notice I'm not using the word 'struggling' — a thing that we're grappling with, and we present the thing, and then they ask the clarifying questions, no advice, just the clarifying questions," she said. "And then I take it in, and then I say any more that I want to say. And then they talk about a time that they've had a similar situation or something that comes to mind that they think might help me. So that's what's been beneficial for me. … The point of this conversation is that inclusion. How do we make our profession sticky? How do we make it sticky? We've got people coming in and heading right out the door, and we've got to get 100,000 more. How do we keep the people who want to stay?"

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Focusing on study groups

As part of the panel, Davis asked three other members of the group to share the most valuable aspects of their weekly meetings. The "clarity" of their discussions and the "vulnerability and being in a place where you're not judged" are beneficial to planners navigating their paths to sustainable careers, said Dominique "Dom" Henderson, a planner who is the founder of Dallas-based registered investment advisory firm DJH Capital Management and the Jumpstart Coaching Lab, an advisor training and coaching firm. He pointed to the "revolving door" that sees nearly three out of four new advisors leave the industry within five years, noting how that dynamic often hinders career-changers trying to enter the field.

"People don't feel like they belong. They feel judged more so," Henderson said. "In our mastermind, there is no judgment on where I'm at and what I'm thinking about. It's not a dumb idea. And I like to say that the quickest way to grow is in a judgment-free zone."

Those types of conversations prove valuable for many RIA owners who may "operate in silos" and benefit from speaking with "other people who've been there, done that and can see things from a different perspective," said Ashleigh Brooker, the founder of Columbia, South Caroline-based RIA firm A.J. Brooker Financial Associates.

"There's so much that they've done for me personally," Brooker said. "And within this past year, I can see a personal change in myself and my business. I've had my business for over 10 years, but just over this past year is when I've finally figured out what I want my niche to be, and I want to focus on generosity planning. They've been there the whole way saying, 'I think that's an excellent idea,' and giving me ideas and saying, 'You need to do this, You need to do that,' and not only supporting me, but holding me accountable and challenging me." 

On some occasions, travel or work requirements may cause one of the group's members to miss a meeting, but those are rare, said Malcolm Ethridge, the founder of Washington, D.C.-based Capital Area Planning Group.

"We all agree that it's that important to our own success, and my success is only as valid, as valuable to me as yours," Ethridge said. "Just having a group of people that you can start from Point C and start to have a conversation, versus having to back it all the way up to the very beginning, is extremely valuable, too. And that goes with the theme of inclusion, where everyone in the group is included because we all have that commonality, in a way, to be able to build a conversation."

It also translates to both goals of drawing young people and career changers into the field and reaching more customers, according to Johel Brown-Grant, who works with CFP-registered college planning programs as director of education at the CFP Board. The themes reminded Brown-Grant of the connection between storytelling and planning, he said. 

"Do you give your clients an opportunity to tell their story, and do you tell your story to them? Because storytelling is about connecting," Brown-Grant said. "How do you get that connection and that inclusion? Can I tell you my story? Do I feel vulnerable enough to tell you my story? If you're able to tell your story, that's one way to feel included when you can tell your story and you can feel that your story is heard, that your voice is heard."

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Tobias Salinger

Earning younger generations' business

Brown-Grant was speaking on an entirely different panel on the first day of the conference, but those concepts tied in with another one on the second day in a session led by Brandon Dixon-James, the president and CEO of Fresno, California-based advisory practice Resilient Wealth Management. He brought up the importance of trust to the profession and the business.

"In our industry, trust is really a key element, when you look at why people do business with us or use services and products you can get anywhere," he said. "But what does trust look like to that younger investor today, and how do you earn that trust early on?"

Part of earning it involves "radical transparency" around topics like fee models and compensation, according to Brenton Harrison, the founder of Nashville, Tennessee-based advisory practice New Money New Problems. Advisors "can't be unwilling to answer" the question, and they "have to give an idea of why you charge what you charge," he said.

"At first, there's way less up-front trust, and you've got to work really hard to earn it," Harrison said about working with new clients. "It's unfortunate, at least a lot of people that I come across, there's almost like this built-in feeling that we might try to screw them. And you've got to work with this generation very hard to explain why something that they could cobble together for free is worth paying thousands of dollars for every year."

Eliminating jargon from marketing materials is another aspect of earning the business of younger clients, said Gloria Garcia Cisneros, a wealth manager with the Los Angeles office of advisory practice LourdMurray. So too is realizing that there are valid reasons that they may have been led astray by online misinformation and investing fads. Her online outreach seeks to boil down financial fluency to the basic elements, without talking down to people or using a lot of industry terminology.

That's important "especially for first gen wealth builders and next gen wealth builders that have often felt excluded from the conversation," she said. "So that's why they're having to go to these fancy one-trick ponies, like the crypto and the day-trading. They want something exciting they found that's relatable to them. We should be making the foundational stuff relatable to them. This is where they should be facing, but we've made it boring or complicated or technical, and so we're not bridging the gap there. Yet their friends are here talking about something that's viral and sounds exciting, and did include them in the conversation and made them feel seen and heard and understood."