In this episode, I sit down with Nathan Harness from Texas A&M’s financial planning program, and Kate Healy from TD Ameritrade Institutional at this year’s NexGen Gathering. Kate Healy is an advocate for the next generation of financial planners, and has focused on developing initiatives that educate the profession on the importance of hiring, and supporting the growth of new planners. Nathan Harness is the TD Ameritrade Director of Financial Planning, and a financial planning professor at Texas A&M.

Kate and Nathan dive into the value of the next generation of planners, how they’re helping to level up the financial planning profession, and ways they can find success within financial planning. Together, they explore the value the next generation of financial planners brings, and how they plug into the financial planning profession’s landscape.

Nathan makes some excellent points about the overall value proposition of a firm. When every planner in the firm is working toward the same set of values and goals, they’re able to communicate clearly to clients. Too often, seasoned firm owners and planners view everyone’s value proposition within the firm as incredibly individual.

This is especially true for how they view their new planners. They may not be sure how a new planner fits into the culture of their firm, and this problem can be solved by understanding that, while everyone brings an individual value to the practice, together your value for clients is unified. Nathan also discusses how new planners can develop their own unique value in a practice by continuing their education, connecting with colleagues, and elevating the others around them.

Kate explores how existing planners can develop and support the next generation of financial planners, but also how next-generation planners can start to develop themselves. She walks through how new planners can do the self-work to discover their own value proposition, what they bring to the table at their firm, and why they feel passionate about the financial planning profession. Taking the time to find your “why” and do some critical self-assessments can be a game-changer, and it’s something that will continue to help new planners add value to the profession.

Together, Kate and Nathan also discuss the value of the NexGen Gathering conference. Being able to join together with like minded new planners to share experiences, and help one another grow is incredibly valuable.

This episode is a must-listen for next-generation planners and seasoned professionals alike. Tune in to hear some incredible insights from two rockstars and educators in the financial planning profession!

Hannah's signature

 

What You’ll Learn:

  • The importance of holistic planning v. specialization
  • How next generation planners can provide more longevity for your firm and higher value for clients
  • How to articulate your value as a new financial planner
  • The value of financial planning for clients

 

Show Transcript

Episode Transcript


Hannah:               Well, I’m excited to have Nathan Harness from Texas A&M University and Kate Healey from TD Ameritrade here with us today. We are at the NexGen Gathering and y’all just did a presentation this morning called NexGen, the value sphere, really talking about the value that we provide to clients but also the value of the next generation of planners. So let’s just jump right in. What is the value proposition for new planners as they’re entering the profession?

Kate:                     There’s so many things that new planners bring to the profession, it’s their diversity, it’s the technical knowledge that they’re bringing from schools. I mean, we can unpack this for days. There are a ton of things that they’re bringing to the profession that the generations before them didn’t have. Training is paramount number one, but I think also the diversity that’s coming into the profession now is a big thing.

Nathan:                One thing I might add is even when we think about the history of our profession, several of us started out as specialists and maybe in our practices we eventually moved towards specialization, but a lot of the value of planning is found in its holistic nature. The synergy that exists between each one of the modular areas of financial planning. A lot of this next generation, some of their value add is they were trained holistically. They didn’t start as specialists, they started as generalists and they may eventually develop a niche practice, but it still comes back to the value of holistic planning. So I think that’s a huge piece that they bring to the table, even in the evolutionary state of planning that we’re in today.

Hannah:               And we’ll dive a little bit more into some of these different areas in a minute. But one question that I’m curious about, as you guys are talking about this value that new planners are bringing, do you think that the profession industry at large recognizes that? So a lot of these new planners are walking into jobs, do you think that they are appreciated for that?

Kate:                     Not yet, it’s starting to happen but I think, you know, and that’s why we started to do the studies that we did to show the value that the NexGen planner brings to the profession. It’s an increase in profits, increase in revenues, it’s increase in productivity, because the prior generations hadn’t seen that. They had a hard time seeing that if you didn’t bring any book of business, how you are creating value for the firm. And as firms grow and progress, there’s so much more that happens in each firm. There’s professional management.

Kate:                     There are things that you need to, as Nathan talked about, you create these individual jobs so everyone is not just a generalist and people are doing specific things and now you’re creating tranches of what people can do in each of those. And so that next generation brings that in and it’s actually freeing up the lead advisors and the owners to do more client facing activities, which is then in return giving them more revenue, more productivity and more income.

Nathan:                Yeah, I second that. Even with the college students that come out of our financial planning program, one of the complexities that they have is being able to articulate their value to the firm that they’re going to work for, even to a client for that matter. It’s really difficult when we consistently go back to quantifying it just off of production, that if you’ve brought in X number of clients or maybe even prior to that, if you’ve made X number of calls or visits this week, then that equates to your value to the firm. Throughout is, we run businesses as well, and so we have a whole business component that comes into play that this next generation can be a part of.

Nathan:                Even think of something so small as what’s your retention strategy with clients? What’s the white glove service that you provide that creates a stickiness to the relationships that you have inside of your firm? If that’s a cult of personality, when one person leaves, then so does that retention strategy. But if you’re bringing in multiple generations behind you as a part of that value add process that’s beyond investments, now you have something that has continuous worth. It has this session behind it. And I think so, that would just be one small sliver of what this next generation can bring to the equation. But I think we don’t think in those terms. So it’s almost turning the proposition upside down to say, how can you plug into my firm? Not, can you only fit into this square box.

Hannah:               And how do you have these conversations with the employers? How are you coaching your students and different people to really articulate their value to employers as they’re going out for interviews and entering the workforce?

Nathan:                I wish I had a really clean answer for you and I could say step one, step two, step three, but I don’t. I would say that’s something that financial planning programs, certificate programs, new entrance into the business are struggling with. It’s part of the conversation we had today in, you got to start with who is your client and having an understanding of what they want and then what’s the value that you bring into that equation. With young adults I think where they struggle is even knowing what the financial planning landscape is. Where do I fit into this massive industry that’s so convoluted that somebody inside the industry may not even be able to articulate what other types of pathways into financial planning look like.

Nathan:                So I think what we do is educate students, one, as to what the opportunity set is for them in this industry and then help them know who they are. So then they can self-select into a firm that’s going to mentor them into a role, that if we take two steps back and try to have them articulate their value before they understand the landscape, it becomes more complex. If there’s any experts out there listening to the podcast, maybe they can help us, and I know you and I talked a little bit about this. They can help this next generation via a mentorship model or other methodologies to understand where they fit into the overall value proposition.

Hannah:               So when employers are out there putting on job descriptions and hiring, what is the value that they’re looking for specifically? And then like, how does that differ from kind of what you would say is a value proposition for new planners?

Kate:                     I think employers are looking for the bodies to come in and kind of do the work, and taking a look at those entry level, those analysts kinds of roles. But I think that they also don’t know what they don’t know. We’ve talked a lot, the conversations have come out of how many times someone gets hired. I was just in one of the circle sessions and a woman said, I’m the first person they’ve ever hired from college. So they’re struggling with her. They don’t know when to let her talk in meetings, when to let her, that development piece of it. So the job description, I think that their writing is very wrote based on what they think you’re going to know when you’re coming out of college, but they’re not thinking through what are the things that are really going to be developmental? What are the things that you need to learn that’s going to be developmental to getting you to that next level and getting you to add value in a much quicker way to their firm?

Nathan:                Yeah, if you don’t have a scaled practice with scalable solutions, it becomes really difficult to plug a new entrant in something understanding where somebody can fit into your overall value proposition, you tend to focus exclusively on the technical. And say as they come in, they’re going to be able to produce plans exclusively and that’s their only return on investment that we’re going to get out of this individual. I think that’s short sighted. I think even a young adult that may not have the wisdom of experience of a senior, they got to start somewhere to pick that up. And I think you can plug them into some level of client relationships where I see a number of firms at a high level beginning to do this as they say, I’m going to bring new planner into client meetings.

Nathan:                They’re gonna begin to know some of our current clients, and part of the strategy that we’re going to have for a long term continuity is to have them work with generation two of that client’s children. So they’re being plugged into the planning process of working in, again, continuity strategy to work with generation two because we know assets run out the door as soon as gen one dies if there’s no existing relationship with generation two.

Hannah:               In your session, one of the things that you guys talked a lot about was even articulating the value of financial planning to clients. So let me just start there with what is the value of financial planning for clients?

Kate:                     You know, and it’s going to be different for every firm, but you’re providing that financial freedom, you’re providing that peace of mind that came out today a couple of times. And that’s so much of what it is. It’s the peace of mind that you’re providing to your clients and helping them think through their financial freedom. I think that’s the important piece from a value, and then your firm obviously depending on who your target is, what you’re actually doing for them. And that’s something, we talked a lot about that diving into and I think the exercises that we did of having people think about what it is that their firm does for people and that’s where we got those things like the peace of mind and things like that.

Nathan:                I’m pulling something out of my wallet, of course listeners can’t see this, but I carry a note in my wallet to remind me why I do what I do. I think everybody needs a little bit of that as they get up some mornings, coffee is not enough so you’ve got to have that memory of why do you do what you do. This comes from a student and I keep it inside of my wallet and it was a student’s response three years ago to a question of why does financial planning matter? And it’s one of the best responses I’ve ever heard in my entire life. And I use her response to remind myself I do what I do every day.

Nathan:                She says this, the importance of financial planning lies within the opportunity to make people’s lives better. Financial planners are not necessarily able to save a family from hardship, but planning does offer hope to those people in disheartened times by always looking one step ahead. Planners lessen the burden and hard times and they multiply they joy in prosperity. Families are able to be more present in their lives and in their relationships because financial planning works to resolve financial uncertainty and anxiety. I don’t think I could say it better than that. In my mind, that is what we do as financial planners. And you’ll notice she didn’t talk about products, she didn’t talk about rates of return. So much of that was emotional. So much of that has to do with the state of an individual and I think ultimately in the higher orders, that’s what people are looking for.

Hannah:               I love that and I love it that a student wrote it.

Nathan:                Yeah, me too.

Hannah:               I was in the room when you guys were asking all these new financial planners who are here at Gathering, what was the value that they offer to their clients? And to your point, Nathan, there were so many different ideas that were out there of, I didn’t think of phrasing it that way. There are so many new and different ways of posing it. So one of the comments that you guys made up on stage was what you are hearing in this room is different than what you would hear if you went to more of an experienced remove advisors or planners. So I’d be really interested in kind of opening that up for you guys. So what were you hearing today and then what would you hear in an older group and kind of help give some light to that?

Nathan:                What I hear whenever I go and speak to maybe a more seasoned, a room of seasoned advisors, people who have been around for awhile, again, taking on maybe a step back to evolution of financial planning. Oftentimes it’s came from your value wasn’t being a closer, bring a new business and having a specialization. So you came out of the most likely wealth management side, maybe you specialize in tax or a couple of other areas. When I go and speak to audiences that are more seasoned or established in financial planning, I think they have a hard time disconnecting from wealth management being exclusively financial planning. That the focus is always, even in the value proposition, looking at what rate of return can we get or how do we manage this portfolio differently than others. So your comparative analysis to another firm is always investments driven, not always, but much of the time.

Nathan:                In that room today when I was listening to each one of the participants speak, what was interesting is how much of it came from sort of what I read there, a piece of mind and understanding of my finances. Simply overcoming the barriers to stepping in the room of a financial planner’s office for the first time in the first place. Those two are vastly different where I think maybe an established firm, and it could be that an established firm works with people who’ve overcome some of those obstacles. They’ve already come in the door, and so I tend to be going after very, very ultra-high net worth and I see my value in the value chain as being more legacy and ultra-high net worth planning. With others in this particular group that we have of NexGen that is here what I love about it is it’s a little bit more inclusive than that.

Nathan:                Maybe it’s the fear that they had coming into financial planning in the first place because it’s sometimes hard to come into it. They recognize how hard it is for them to have become a financial planner than what must it be like for our clients. And so they, maybe that’s the paradigm shift. They see the landscape a little bit differently. I think whenever you’re able to marry somebody who’s been in business for a long time and somebody who’s new in business, they add to that paradigm or they expand it. They expand it to help you see what you don’t. I use the analogy sometimes, I have a Shih Tzu, aptly named, who is an older dog and he’s probably in the last several years of his life. He lays around a lot, he’s not an excited dog, but when my in-laws come and they bring their dog in, Gordy come alive.

Nathan:                He wants to show those dogs everything, he gets excited. And there’s something that happens I think with somebody who’s been in practice for awhile, they sometimes forget what their origin was like whenever they started. And they sometimes forget the excitement that comes when they fulfill their purpose and their mission of making people’s lives better. When they see the excitement that a young adult gets from that, it helps them remember what that was like for them and creates a synergy in a way, I don’t know that you can do independently. That’s the convergence, that’s I think the incredible piece, and that’s the difference in the two dialogues that I hear from seasoned and maybe younger.

Hannah:               What I’m hearing you say is that these younger planners are really bringing their passion back to a lot of these firms and really reinvigorating them?

Nathan:                I think so. And you probably see that at 10,000 feet.

Kate:                     Absolutely. I mean, it’s why we’re focused on the next gen, it’s why I love it. I remember a consultant coming up to me once and offering to take off my hands some of the work that we do with students at the National Link Conference and I said, are you kidding? My team would quit. It’s one of the passions that they have is to watch the next generation come and to be able to develop them and have watch them blossom and bring them to advisors to do that. It is, I mean it’s the circle of life, we’re bringing back that passion and you need that next generation. And I think advisors are starting to see that. I mentioned there the differences in the conversations I have from why, why, why bring in the next generation to how. They’re getting that, they are adding to that. It’s not just for succession planning, but it’s adding a passion back to their business.

Hannah:               I love that. I talked to so many new planners and I know for myself is when I give first got started, I had this passion but I didn’t see it anywhere else and it was like, I was embarrassed of it. But what you’re really saying is as new planners, we really need to be embracing this passion and really living into that.

Kate:                     Absolutely.

Nathan:                Yes.

Hannah:               As these new planners are embracing their passion, having an impact on their firms. Kate, you’ve talked about some of the research that you’ve done or TD has done, and what are the … How do you quantify that? And what’s been done for that? So I’d love for you to talk and share some more about some of the studies that have been done or what does that actually look like in practice?

Kate:                     Really like we mentioned, we want it to show advisors what it was like and why they should be hiring NexGen advisers. And so we did a study a couple of years ago with Investment News and found that firms that had seven or more full time employees and had at least one NexGen adviser, so a 21% higher operating income, they sell 20% greater profit and 33% more revenue. And we asked these kinds of questions in our FAN site, people in pace study on a biannual basis and we see very similar things. What we see is that, firms that work with older clients, who tend to have older principals, have higher revenues because older clients have more money, they’ve got more assets under management. But firms that grow faster or the firms that are working with younger clients because younger clients are not being, there’s not as much competition to get them because they have less money.

Kate:                     So if you look in a room of, you go to an industry conference and then the amount of people that are working with younger clients is much smaller than the amount of people that are going after that red ocean, the blue ocean is the younger clients. So that’s your growth strategy and we’re seeing that. And so in the research we’ve seen that, firms that concentrate on the under 55 market grow at double rate of other firms. So it’s really important to go after that blue ocean go after those younger clients. And I mentioned earlier, but we talk about the fact that 90% of RA’s have 50% of their clients in distribution mode. And so that is very much a deceleration of businesses that aren’t focused on those younger clients.

Hannah:               We’re seeing the value that’s happening there, and I’ve kind of asked this a little bit, but for the planner that’s already working in a firm, how do they articulate this with the bosses that they have right now? Are there ways to work within the company that you are? Or is it something that if you’re not really finding a career path or a next step, it gets to where you need to leave? What would you advise that person?

Nathan:                Yeah, I think you absolutely can create and find value in the firm that you’re in. There’s a goodness of fit there. you have to see first, how do you fit into the value chain? So specifically you. I think sometimes we approach this equation of how does financial planning this big nebulous cloud solve the needs of our clients versus how does Nathan Harness specifically have skills that meets the needs of the clients that I am targeting and want to work with? So you want to take it down first I think to the, actually I think at the backwards, at the macro level you want to have an understanding of how that operates. What is the value proposition of financial planning as a whole. Then you want to scope that in to you individually, what are the specific pieces.

Nathan:                So I discovered this early in my life that I have a passion for education and it doesn’t mean that I don’t fit in financial planning. I would argue that most financial planners are educators, they just do it one on one rather inside of the classroom setting. I had such a passion for that, that that was my pursuit. I knew I wanted to be in financial planning. I knew I wanted to be an educator. I had to figure out how to marry those two and where my value proposition in the overarching concept of financial planning was a fit. I think for other individuals it’s discovering what are your specific, not just skill sets but what are your passion points as well. And when you can discover what those are, whenever you can be able to write those down, and maybe that takes more than 30 minutes and a napkin at a restaurant, this is probably a month of you thinking and more than that, getting the input of people who know you well.

Nathan:                I think that’s the part that we miss a lot. We assume that we know ourselves better than anyone else and that nobody else can speak into that. The reality is, hopefully there are other people in our lives that know us well, that can speak into what our strengths are and where they see us come alive. So those are the types of questions, especially in a setting like this, whether it be retreat or here at the gathering, it’s a bit more organic where you can have these types of conversations. So once you know that well, once you know yourself and where you fit into the value chain, specifically with clients, it’s now, do I fit well on the firm that I’m currently in? Or can I take what I am to the firm and see if they embrace that?

Nathan:                So I don’t think the leap is, hey, if I don’t see an instantaneous fit, I’m out the door. It’s, can I articulate this value well to my firm? Because if I can’t articulate it up channel, I’m not gonna be able to tell a client either. So I need to be able to showcase my value well to my boss or my colleagues. And when I can do that really well and if I do knew that really well, there’s a decent chance that they might alter some of the business structure to better fit you in because you are able to show that value. Once you fit in that structure even better than you were before and you can marry that together, then you can tell a comprehensive story of a firm.

Nathan:                One of the things I’ve noticed whenever I talked to firms is, a lot of individuals by default think that their value proposition is the best part or only part of the firm. So what I’ll do in a firm is say, what’s your mission? Everybody calls it something else. What’s your mission? What’s your purpose statement? What’s your value sphere, whatever you want to call it. What is the condensed way in which you can articulate that you bring value to your clients, your end user? And what’s interesting when I ask that question to firms, some of them will kind of stumble and you can tell they’ve not thought of it before necessarily. Those that can articulate it, I’ll ask the lead advisor that question and write it down and then I’ll go inside the firm somewhere else maybe a para-planner, maybe a junior planner, maybe even another partner and I’ll ask the same question. You know what’s interesting is how those don’t line up with one another. They can be vastly different.

Nathan:                So if from your brand’s perspective as a firm you think that the value, the mission, the vision is vastly different from one person to the next, I think you’re going to find that that matriculates or trickles out into your clients to where they see the disunity of the brand as well. So I think it functions well when you’re honest with yourself and honest with your bosses, and then have an understanding of the overall value proposition of your firm. That machine functions so much better than it would otherwise. So it helps to alleviate a lot of problems of communication and consistency to clients.

Kate:                     And I just want to add on that. You talked about what you can do. We talk a lot in this world about how advisers need to develop the next generation and develop G2, but we can’t forget how the next gen advisors need to develop themselves. And so it’s important to take that time and think through your value statement. What is it that you’re bringing to the table? It’s not all for your leaders to figure out. You have to think, really think internally. So the development piece is for the advisors as well as the owners of the firm.

Kate:                     So I think it’s important to take the time, figure out who you are, learn how to express that to your leaders, and do that on a regular basis because it changes from time to time, where your value is when you’re 22 and 25 and 30 is much different. So you got to constantly be taking a look at yourself, you can’t look to the industry to come up with what your development path is going to be, that’s internal. You really got to think that through. Get the help from other people, but you have to start with that.

Hannah:               Well, and I loved how you said it takes months or you said it’s not just mere 30 minute or months, I’m like, or years-

Nathan:                Yeah.

Hannah:               Maybe speaking from personal experience there of finding what that really is. Can you guys, I’m hearing everything you’re saying and I’m thinking of the listener and different people that I’ve talked to you and this is still really hard concept to grasp. Do you guys have other examples? I know Nathan you use kind of your example, but is there something that you can, or stories that you guys have heard that kind of really resonate with getting that personal story or that personal vision for yourself and then how that impacts outside of you?

Kate:                     I think some of the things, even just based on some of the students, we brought students from Texas A&M to our national conference, The National Link Conference, and for all the students that we bring, we actually spend a day with them before the conference starts and we take them through some of these exercises. At TD Ameritrade we use strengths finders, the Gallup, and we’ve used that with some of the students. And I know that between that, they learn how to come up with their elevator pitch and then they spend three days with RA’s.

Kate:                     And I know Nathan, one of your students actually came back afterwards and said, I really used that time and I wasn’t sure I was going to be a financial adviser, but doing those exercises and going to that conference actually made me realize this is my calling, this is what I want to do. So I think just so important to make sure that we’re taking that step back and that we’re providing the tools for people to take them through those thought processes to really help them figure that out.

Nathan:                Yeah, I would echo Kate that it’s almost like group therapy. When I’ve been in a session where I’ve heard somebody else talking about one of their problems or strengths or opportunities, I find myself viewing myself in that, saying, I’ve never thought of that before. Arrested development, this makes sense to me now, whatever the term is, whatever they’re talking about. I was never able to articulate that well because I wasn’t around people who are trying to explore the same topic. So this is what, again, I keep coming back to this particular conference, but what a great place to figure yourself out. What better place than around other people who are in the same boat, that are trying to figure out what their value and their value proposition is.

Nathan:                Now, the only downside to that is you might get stuck in only understanding your value proposition from where you’re currently at, what ship you’re on, and what position you’re in the sea. You want to be able to have a map where you can see a bigger swath of the sea so you know where you can go. So that involves, I think some mentorship up, further down the path than you’ve been. Talking to people maybe in other channels of financial planning and being able to determine how they discovered their value. And some of that even will help you see where you want to go. It’s not just about where you are and the value that you have, it’s the value that you want to bring to the table. Some of that is going to be learned through experience. Some of it’s going to be learned through education.

Nathan:                I mean, wisdom doesn’t come easy, it’s experienced, it’s understood, that’s tough, that doesn’t come overnight. But figuring out your pathway to expedite that to where you can increase the speed to move past knowledge into wisdom, which is the experience element, I think requires that you engage people who are in the same boat that you are and have an understanding of your position. And then those who are not, and understand how you can navigate the waters to get to the place where you want to go.

Nathan:                That’s what we do in financial planning by the way. We help people discover where they are and where they want to be and we develop a roadmap on how they can get there. We talk about that all the time, but we forget about that, I think sometimes in our own human capital or maybe our life contentment map.

Hannah:               So for new planners who are entering the profession right now, what would be your advice for them?

Kate:                     Learn everything you can. Join as many associations. Nathan just talked about this gathering is fantastic for young advisors to come in here and meet like-minded people. This is where you form your study groups, your lifelong friendships, the people that are gonna sustain you through the times when you are in a position or in a place or just in a, whatever works, it’s not going as well as you want. These are the people that you’re going to fall back to. So I think getting involved, because often times you’re working at smaller firms that might not have an infrastructure that’s going to allow that. So your organizations, the FPA, NAPFA, things like that are really going to pull you into, meet with like-minded people. And I think that from a development perspective, especially as we see it with the next generation Y is so in tune with, collaborating and working together. And so an event like this is fantastic.

Kate:                     I was just sitting in some of the circle sessions and just listening to how everyone just builds on everything else and I knew that happens at retreat as well. But it’s just really cool to see it happen when it’s happening at a younger age and watching people whose whole career is still in front of them and they’re starting to see the tentacles of where they could potentially go. So I would just say, get involved and that’s one of the best things you can do.

Nathan:                You know I’m an educator, I’m gonna be biased in that space. I would say be a reader, never stopped reading and consuming information. Constantly be looking for ways to learn more about our profession, where we’re headed as a whole and new skill sets that you can bring to the table, new Understanding. I mean, we just had a major tax reform occur. How can you have a knowledge about that that is out in front of your clients or maybe adds to your colleagues or your firm in a way that others haven’t caught up to. Think about maybe additional designations or ways in which you can acquire more knowledge and frankly, it’s a signal to the market as well that you’re trustworthy. How can you do more of that. So that’s the more internal knowledge piece.

Nathan:                Two, get a mentor. So find somebody, be known, find somebody who you’re willing to allow to critically speak into your life into, maybe have one on the business side and one on the personal side, to where you can really again think about where you are and where you want to be. A lot of that is going to come from outside observers helping you have an understanding of that and being able to articulate that well.

Nathan:                Three, I would say be involved. Just echoing what Kate said, get involved. I think sometimes the profession and professional organizations struggle to help young adults understand what the importance of being involved in the profession is. We begin early in our career to think just of developing our own path rather than as the tide rises, so shall we all, getting involved professionally with one another. So be able to articulate back to your boss. I love this on the website of the letter to the boss to be able to come to this event. Man, that’s awesome. Be able to get rid of any of those obstacles that are in the way of you being able to be a part of this profession. Not only so you can give back and make a pathway for the person behind you, but so that you can understand better your fit into our industry as a whole.

Nathan:                And in four, I love the idea of study groups. Studying with others so that you never get behind, I think that comes full circle and then never stop reading. Never stop sharing as well. So never start at the beginning. Never stop reading, and end it with never stop sharing what you’re reading so that you can elevate others around you. I think in the process you’ll find yourself to be rich beyond your wildest dreams because it’s not just money at that point anymore. It’s more than that, the part that makes you really rich, which extends beyond income.

Hannah:               So what are the big issues facing the profession’s career path? So can you talk a little bit about what’s happening right now on career paths, like in the larger profession?

Kate:                     Yeah, the biggest challenge especially in the independent industry is that, every firm onboards differently, so there is no path. And so it’s so hard to attract people to a profession that we can’t tell them what the end game is and we know that attracting people to this profession is a challenge that we have. 100,000 advisors are retiring over the next decade. We’re graduating great students, but only at the rate of a couple of hundred a year from the 140 degree programs in existence now. So there’s a big delta. So we need to make sure that we are showing people why this career matters and what they can get in it. And so as part of the center for financial planning, we’ve created a career path. It’s an employer’s guide to career paths. We just released it about a month ago. We’re creating a version for students and employees in 2020, but honestly, this guide that we’ve just released, it’s giving all of the career paths the latter that you would take in an advisory career.

Kate:                     So from analysts all the way up to being partner in the firm and it’s showing all the levels of your career progression, but not only what the levels are, it’s showing you what are the competencies you need to have to be in that level. But what are the more importantly, what are the competencies you need to be promoted to the next level, what that timeframe should be, what are the things you should be doing? Is it a two to five year problem? Is it two to, sorry, years three to five in your career? It’s also showing what the compensation should be.

Kate:                     So in our industry, we’ve got some great benchmarking studies that show compensation for roles, but none of them that are showing the holistic taking you all the way from entry level all the way up to the lead advisor, the owner of the firm, showing you what that path can look like. And so it’s really important and we’ve already seen it be put into action. Employers that are saying, every time I talk about it, they love it. I’ve given out, I don’t know how many copies at conferences I’ve been at just in the past month. And we actually… Mark DeBarge and I have a competition over how many get downloaded on his LinkedIn account versus my LinkedIn account. He’s winning by the way.

Kate:                     It’s just a really important guy that’s been missing in our industry for so long and it’s giving out that pathway and it talks about all business models. So it’s the independent model, it’s the broker dealer model, it’s the retail model. So it’s a really powerful piece of information for everyone. And what’s great about it is, while it’s 88 pages, it’s also chunked up into the different roles, the different business models, but there are case studies for each avenue of it. So there are case studies, live stories in there that are going to help you when you think about how your firm fits into that. Because there are tens of thousands of RA firms out there, each firm has a different model. The onboarding is never the same, and so this is giving you more of that pathway to come up with a consistent message.

Kate:                     And also as you’re talking to, when we’re talking to that next generation, and again, the next generation isn’t just millennials, it’s people who aren’t in the profession yet. So it’s minorities, it’s women, it’s people who are returning to work from raising families or the military, being able to show them this is what a day in the life of this role would look like. Here’s the qualifications you need to get it and here’s what you get paid. That’s so powerful and something that we haven’t had in this industry forever. So I think the CF people, the Center for Financial Planning, this is the combination of the research that we’ve been doing over the past four years. It’s come out of the workforce development committee, but it’s really, it’s just the seminal piece that I think is really powerful and it’s going to just help propel this industry into a profession.

Nathan:                Yeah. David Grau in his book, I was looking up this quote while you were talking. David Grau in his book, Succession Planning for Financial Advisors says it this way, when young advisors are successfully recruited into a practice that has no future beyond the life of its owner and the founder is in the last 10 years of his or her career, the natural tendency is for the new recruits to build their own practices, there is no better choice. If you don’t have, one, a long-term continuity or succession plan and two, a pathway to growth within a firm, then the only choice is for me to go build that myself. I think that having those pathways to growth or maybe a career map is a better way of saying that, that career map, I find that students find themselves somewhat listless. I’ve even said it sometimes this way that entitlement is sometimes mislabeled with this next generation because they have tons of passion, but they’re struggling to have directed purpose with that passion.

Nathan:                And when you have a lot of passion and not a lot of directed purpose, it’s like having a map without a destination, it creates a conundrum for individuals. So I think this career map helps people understand where their passion fits into a firm and it’s going to increase retention. It’s going to help people understand where their value proposition fits in and it’s gonna allow you to scale a firm. So that study is amazing. It’s long, but it’s amazing that pieces that you can chunk out as a student thinking about what firm you want to go to work for or as a firm who maybe was a sole operator for years and years and now you’re beginning to think, I need to add another or another.

Nathan:                How do I do that? What are … I get people calling me as a professor all the time, how much should I pay this person? What is the value of X? Or what is the value of Y? And the only reason they ask me is because they see that I have seen a lot of people come in but I’m Texas bias, versus somebody out of New Jersey or New York or California. So I think there’s a lot of value in going through studies like that.

Hannah:               And so Nathan there is the paths of financial planning, I know you’ve done some work on that. So can you talk a little bit about what are those different paths?

Nathan:                Sure. Luke Dean out of UVU is one of the first to try to get himself out of trouble, if you know Luke that’ll come across well. Try to get himself out of trouble because he found that he was focusing his conversation into very directed areas of financial planning and so he wanted to remove some of his own bias and say, how can I articulate to students all the entry points that they can have in financial planning? So that the beauty of this pathway is to planning is, four of us faculty got together and began to look at all of our students and say, where are they going? So we just got on a conference call and said, where did your students go? Where did your students go?

Nathan:                And we begin to build out this pathway, the circle of all the areas that students could go. And beyond that we said, what are the attributes of these areas? So that we can help students self-select if they knew themselves and they knew the attributes of different generally firms that were out there, they could self-select into the areas that they wanted to fit or choose internships in those areas so they could see the goodness of fit that was there.

Nathan:                So for me, I use this as well to help students understand if you go to work for a particular firm and you’re not successful there, it does not mean that this industry is not for you. It means that one specific area inside of planning was in one specific firm inside of that area was not the right fit.

Nathan:                So that’s how all this came together. The passive planning takes up about 12, it depends on who’s presenting it. We’ve allowed this to be open for any university or frankly any recruiter from other areas to use. It’s for anybody that wants to use the circle. So what we have is, entrepreneurial types of firms that have attributes, so these would be warehouse, property and casualty firms, life and disability firms. And to some extent the bleed over into franchise used to be independent or hybrid broker dealers. The attributes of those particular firms, traditionally, they’re very high entrepreneur, they have high risk but tend to be higher reward from a payment standpoint.

Nathan:                These are the names that you probably know. And so when students come to me who’ve never heard of planning before, they oftentimes come in that quadrant because that’s where the big marketing dollars are. They’ve heard those names in television ads before. So there’s high name recognition. Typically you have to come into positions like that and work through developing a book of business. And oftentimes you do it on your own, you’re developing your own business. So there could be a strong mentorship because there’s traditional training programs but there might not be as well. You might be on your own sink or swim sort of environment.

Nathan:                Now where we see another quadrant is in the RA space, the Niche RA or accounting tax RA, sort of the counseling area in what we called GARQ, which was the Government Academia and Research Quadrant. That particular quadrant has pretty defined career paths a little bit less name recognition. My students, when somebody asks, where do a lot of your students go to work? And I give them a name in small town Texas they’ve never heard of it before, so they don’t know that that’s an opportunity for them to go to work in those places. Now the custodian of those RA’s, they’ve heard that brand before, they’ve heard those big names, tends to be salaried positions.

Nathan:                And so what I’m finding and what I’m trying to push back up channel to employers is students just like your clients want to have some sense of security in the first several years of working with you because they’re developing trust. So as they come to work for you, they’re looking for a salary position. And I realize there is a conundrum and a cost associated with making that investment, but a lot of students end up looking for salary positions for their first several years at least. So that they can develop a framework of being able to develop trust, of being able to articulate their value well, of being able to produce ROI in a firm in a very measurable way as you’re making the investment in them. So a lot of students tend to gravitate towards salary positions.

Nathan:                There’s a lot of development and training, a little bit less brand recognition, but most of those areas you end up owning your clients. Those are … That’s not the right way of saying that. You end up with a business or a part of a business that you have ownership in rather than a book, a business.

Nathan:                Then we presented another quadrant, which tends to be this Robo Fintech, which when I started teaching, I had zero students go to work in that quadrant, nobody was looking at that. Now it’s still a relatively small percentage of my students, but more and more are wanting to get into full time or at least part time work where they’re in their podcast space or their writing or the interesting thing about our program is we have students across all majors coming into planning. And so we have some who want to, I had one who is a journalism student who wants to be a journalist in financial planning. I mean, who would’ve thought of that 10 years ago that that would be a pathway in. Banks, credit unions, discount brokers, and then in the product distribution, which will be large distribution channels.

Nathan:                That’s a whole other area that tends to be more in a corporate setting, blended compensation. It’s relatively structured and there’s lots of development and training. So what we do, that’s the 10,000 foot view, but with my students I do a whole lecture where we break down every one of those jobs and we say, what would you be doing? What’s a day look like in those jobs? What would be the obstacles in working inside and what would be the opportunities in working inside each one of these areas? And then we talk about how some firms are, many of these, let’s use Merrill Lynch. Merrill Lynch fits in as a wire house, but they’re also in product distribution side. They also technically have an RA and they’re in the Robo space as well. So they fit into a lot of these different attributes or planning areas, which muddies the water more.

Nathan:                So when a student asked me, where does Merrill Lynch or where does Northwestern Mutual or where does Raymond James Fit in, they can be a lot of these areas. We found this to be a tool to help explain what financial planning is in the landscape that’s out there today. And it seems to be open architecture enough that it allows for the evolution of some of these firms as they become something else or as the majority of what they are moves into different quadrants.

Hannah:               And I love that everything continues to change, the landscape keeps changing and evolving and it’s only going to keep going faster.

Nathan:                Whenever I came into the profession, it was about 20 years ago and whenever I came in, I came out with an undergraduate degree in finance and I thought, I’m fully prepared for this profession. I’m going to do so well because I know how to value a stock and a bond. Clients are going to come pouring in the doors whenever I open up my doors. And I started my first day of work and i remember in training, this is literally the training process. Somebody, one of the trainers bosses telling me or telling the entire group, you do not have value, that must be earned here, and the way that that’s earned is through production and bringing more people in the door, I.E. The only value that you have in our value chain is to be a salesperson. And there is nothing else that you can do and coffee is for closers. You must earn the right to be able to have that.

Nathan:                It was a brutal entry point. And frankly, whenever that occurred, I thought, I don’t know that I’m a good fit for this industry, maybe I’m not hungry enough. I began to question myself and say, what’s wrong with me if I don’t fit with the value that I think I bring? ‘Cause remember I always saw myself as an educator then maybe this isn’t the right place for me. And I sat on that for a while and almost left our industry. It was later on as an educator watching new generations come into financial planning, that I begin to see that new people have value. Frankly, everyone in our industry has value, from those who’ve been in here, have been in the profession for 60 years, to those who’ve been in the profession for six minutes. The paradigm that they bring of understanding into the equation is so valuable, but more than that, it’s the passion that they bring.

Nathan:                Ultimately, I hope what connects us is back to that letter that I keep in my wallet. The value is that we make people’s lives better so that they can live fully in their lives. If that’s at the nucleus of why you do what you do, then I can tell you automatically you have value. But it’s more than that, don’t stop there, because your value is in the technical, it’s in the emotional, it’s in the social. Each one of these areas that you can branch into, you can articulate the value that you’re bringing into the equation of a firm, of you as an individual and specifically down to your clients. So spend some time thinking about that, you are valuable. How do you begin to put that down on paper and be able to visualize that and ultimately put it into spoken word so that it can be easily retold? To me, that’s how you create circles of influence by the way.

Nathan:                If you have a message that is so concise, that it can be told in a sentence or two and it’s not fake, it’s not an outside consulting firm or marketing firm coming in and tell you what those two sentences are. If they’re really you and you’re able to articulate that in a way in which it can be easily retold, once you communicate that to your clients, they become circles of influence because they can then share the same message that you did because it’s real, because it’s true. Whenever you can do that well, I think we begin to change to where I hope in my lifetime, people go and see a financial planner just like they go to see a doctor. I don’t question the doctors model of how they get paid. I don’t question whether or not a doctor is going to prescribe the right medication. I go to a doctor because they take the Hippocratic Oath and they desire to put me in a better place than when I walked in the door.

Nathan:                My hope is that our profession is seen at the same stature and the same light, that we are helping people to live better lives, but it extends beyond them, it’s the legacy of their children and their grandchildren as well. I hope that we are seen in that light and I think the way that we’re going to do that is when we come back to the reason that we have passion. And it’s not because I make six figures a year, that’s a great sidebar, it’s because I love people and I want to see them in a better financial condition, making wise decisions than they were before they met me.

Hannah:               I love that.

Nathan:                I like to rant.

Hannah:               Well, thank you both for being here, for being our guest on the podcast, for being here at Gathering and for everything that you guys are doing to help really push this profession forward. We’re glad to be in this with you, so thank you guys.

Nathan:                Thank you.

Kate:                     Thank you.

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