This article was corrected on October 8 at approximately 1:30pm ET. The original article stated than Ron Carson did not have the CFP designation. That was incorrect, and the article has been updated to reflect the fact that he does.
Am I the only one who is growing concerned about the current trajectory of the financial planning profession?
The trigger for this column came when I saw the enormous hoopla around the recent WealthStack conference in Scottsdale, AZ – billed on social media as the “must-attend meeting of the year.” Of course I was curious, so I checked out the agenda – and I saw a snapshot of a profession that I hardly recognized: Mergers and acquisitions. Building your brand on social media. Rapid growth. ETFs. Investing. What the smart money is betting on. Liquid alts. Reading the macro tea leaves. How to build an RIA giant.
The themes of the must-attend conference were centered on how very complex asset management could make a ton of money for your business. If you simply attended that conference, you might not realize that there is a financial planning component to the profession at all. It felt like a direct echo of the theme of the sales era in financial planning, the implicit message in every conference and product ad: If you aren't making millions, then baby, you aren't making it.
Of course, the must-attend conference is not the only offender here. The trade magazines that I cover and review – Financial Planning, Investment Advisor and Financial Advisor – have moved strongly in the same direction, defaulting their pages to asset management, as if that’s really what financial planning is all about.
If the pages aren’t telling you the latest investment fad, then you can read about broker-dealers of the year, and the constant game of musical chairs among sales teams moving among broker-dealer firms. Every magazine now has their “broker-dealer issue,” which shows that most of these firms earn more than 50% of their revenue from annuity and insurance sales.
Meanwhile, who are our new role models? The WealthStack conference also featured the cool firms that you constantly read about in the trade press: Joe Duran’s United Capital (now part of Goldman Sachs), Ric Edelman’s Edelman Financial Services, Shirl Penney’s Dynasty Financial Partners and Ron Carson’s Carson Wealth (affiliated with Cetera Advisor Networks, the BD assembled by non-traded REIT promoter Nick Schorsch, whose firm just paid $1 billion to settle its dispute with investors). The wisdom of these empire-builders is sought as a way to help readers and attendees go about making as much money as possible, building the biggest empire that you can, and maybe going public in the process.
With the exception of Ron Carson, none of these people we see and hear, and are showcased for us to emulate, have the CFP or CPA/PFS designation.
My point? There are thousands of real professionals, with real designations, toiling in the trenches every day, helping their clients achieve great outcomes. Ask any of them, and they’ll tell you that the financial planning profession is not, and should never be, about tricky asset management techniques and picking the cool ETFs. It is not – and never should be – represented by the large sales organizations whose trade association fiercely opposes the fiduciary standard at every regulatory turn. They know there is no value in the gossip about which firm acquired whom.
As an optimist, I believe that the real professionals in our midst have resisted the media/conference drumbeat that financial planning is about how much money you can make, or how big an empire you can build. But it honestly worries me when a must-attend conference includes no sessions on sophisticated tax planning, modeling retirement, decision-making around Social Security, retirement decumulation, Roth conversions, dealing with special needs children, planned giving techniques or client communication skills.
I am deeply concerned that our professional literature considers it big news that a “billion dollar” office has switched allegiances and is repapering its clients with a different broker-dealer.
My goal in writing this column is not to throw stones. The profession will always have empire builders and advisors whose value proposition revolves around tricky, complicated asset management strategies using the latest and greatest ETFs and (heaven spare me) alts. The sales organizations will always be with us, even as the profession marches steadily away from the commission revenue model.
It’s time for the real professionals, many thousands of you, to publicly commit to real professionalism, which rests on a foundation of technical knowledge, the ability to relate to people and change their behaviors for the better, and an overriding concern for successful client outcomes. These are not sexy topics, but they are far more useful to the real business of planning than an ETF showdown.
I see signs that our profession is taking a wrong turn. But I have chosen (against mounting evidence) to believe that the mainstream thousands of advisors aren’t nearly as focused on empire-building, sales gossip and tricky investment techniques as the magazine editors and conference promoters believe they are.
Professionalism will win out over the glitz and the glitter. It is winning, even if the victory is taking place one client relationship at a time, far out of the media’s glare, in unsung offices all over the country. And I believe that in the future, conferences that feature the most interesting thoughts and ideas from those mainstream professionals will be the must-attend meetings.
Am I right?
Bob Veres' Inside Information service is the best practice management, marketing, client service resource for financial services professionals. Check out his blog at: www.bobveres.com
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