What Makes Financial Advisors Happy and The Second Kitces Research Study on Advisor Wellbeing

What Makes Financial Advisors Happy And The Second Kitces Research Study On Advisor Wellbeing

August 9, 2021 07:01 am 2 Comments CATEGORY: Nerd's Eye View

The financial services industry has long presented itself as one with high earning potential. As the saying goes, “there’s a lot of money in the money business”. For financial advisors, in particular, the career is often held out as one where advisors have ‘unlimited’ income potential… or at least, an earnings opportunity that is limited only by the hours of hustle that the advisor is willing to put in to build their book of clients.

Yet, while the average established financial advisor does earn significantly more than the median US household ($192,000 versus $68,700, respectively, according to the latest Kitces Research study), what’s even more notable is that when it comes to overall wellbeing, the average financial advisor actually outscores the typical American on all 18 subscales of the Comprehensive Inventory of Thriving! In other words, the career of being a financial advisor isn’t only one of above-average income, but it is rewarding across all domains of wellbeing, from relationships to engagement to mastery and meaning… with a particular focus on self-efficacy and accomplishment. In other words, the career of being a financial advisor is particularly conducive to those who are good at setting goals and being able to take action to achieve them… who then work with clients to help them set and achieve their own goals, too!

Unfortunately, though, one of the hardest aspects of being a financial advisor is simply figuring out what path to pursue to be a financial advisor, in an industry with choices from employee to independent, broker-dealer to RIA, large national firm to local boutique (or even just hanging one’s own shingle as a solo advisor!). For which it seems that every successful financial advisor says “their” channel and business model is the best… and in practice, relatively few advisors change channels at all throughout their careers!

However, as our 2020 Kitces Research study on Advisor Wellbeing reveals, not all advisor channels and business models are truly equal when it comes to advisor wellbeing. Instead, the reality is that the ‘best’ channel and business model for an advisor depends on their own intrinsic motivators and preferences. For instance, advisors who greatly value their autonomy may eschew the wirehouse model and pursue independence, while those who value income the most will tend to start their own firm (even though doing so is far more time-consuming), while those who value their time over just maximizing income may prefer an employee career path rather than trying to ‘eat-what-you-kill’ as an advisor who has to get their own client base.

In order to explore this further, we’re excited to announce our latest 2021 Kitces Research study on Advisor Wellbeing, specifically to delve more deeply into the intersection of what leads to the greatest levels of happiness and wellbeing as an advisor, and the motivators that lead us to become financial advisors (and to choose certain channels and business models over others). Notably, this year’s Wellbeing survey is shorter than our ‘typical’ Kitces Research study, and it’s our hope that every advisor will take a few minutes to share their own experiences and perspectives for this important research!

Thanks in advance for your participation and willingness to contribute!

#FA Success Ep 298: Navigating The Evolution From Broker-Dealer To RIA Platform Leadership, With Carolyn Armitage

September 13, 2022 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Carolyn Armitage Podcast Featured Image FAS

Welcome back to the 298th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Carolyn Armitage. Carolyn is the President of Thrivent Advisor Network, an RIA platform that offers partnership and affiliate models for financial advisors and oversees $6.5 billion in assets managed by over 20 affiliated independent advisor businesses.

What's unique about Carolyn, though, is how she quickly rose through the corporate ranks in the financial services industry to leadership positions for several major broker-dealers, where she developed and implemented strategies to facilitate their transition from brokerage to advisory models… giving her a unique first-hand perspective over the past several decades on the industry’s ongoing evolution from brokerage to RIA platforms.

In this episode, we talk in-depth about how Carolyn grew her career to become a leader in the financial services industry and made her mark by becoming an established executor for major broker-dealers that wanted to shift away from solely commission-based models and add advisory models, the paths that Carolyn navigated at companies like H.D. Vest and Financial Network to improve upon or outright establish new advisory platforms within their existing brokerage businesses, and how in three short years, Carolyn built a new training and development platform for LPL’s largest advisors – helping them recruit and retain advisors, create better compensation packages, and even build succession and continuity plans – to the point that the program was so successful LPL had to de-emphasize and eventually disband the program just to avoid creating an over-concentration of growth in that subset of firms Carolyn had developed!

We also talk about how, while Carolyn was first working in the broker-dealer space, it was the opportunity she received to explore and analyze the newly emerging advisory side of financial services that led her to truly appreciate the benefits of financial planning for not only the client relationship but also the steady revenue streams it created for advisory firms, how Carolyn faced head-on the internal setbacks and challenges that arose as she was building new kinds of advisory platforms within very large firms that were sometimes resistant to change, and why Carolyn was ultimately inspired to join and lead Thrivent Advisor Network because of their transparency, ethical standards, and their commitment to their mantra of living generously by dedicating volunteer time (and hundreds of millions of dollars in donations) to help improve the communities they operate in.

And be certain to listen to the end, where Carolyn shares why she believes that financial advisors can benefit from focusing on intentionality when managing their business so that they can create space for themselves to concentrate on the parts of the business they love (like working with clients rather than being entrenched in the operational demands needed to scale and grow their businesses), why Carolyn believes in the importance of truly taking the necessary time to find the right employees that align with the values of the firm and can help build a positive work culture, and how Carolyn got comfortable to view her own mistakes and failures in business as learning opportunities to reflect and improve… and now tries to instill that belief within her team so they can feel safe in a nurturing environment where they have room to experiment and ultimately help the firm grow.

So, whether you’re interested in learning about how Carolyn navigated her career path through leadership roles as the financial services industry evolved and shifted toward adopting advisory models and focusing on financial planning, how Carolyn helped broker-dealers adopt RIA frameworks and enhance how they partner with financial advisors, or why Carolyn decided to lead an advisor network that aligns better with her values and focuses on living generously, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Carolyn Armitage.

Kitces & Carl Ep 91: Is It Better To Have Clear Goals Or ‘Just’ A Strong Sense Of Direction?

July 28, 2022 07:02 am 0 Comments CATEGORY: Kitces & Carl Podcast

Kitces Carl Ep Is It Better To Have Clear Goals Or Just A Strong Sense Of Direction Featured Image

Financial advisors are often innately inclined to set long-term goals and stay on the course to help their clients achieve their goals, as the advisor understands the bigger picture of having a financial roadmap and its benefits. However, when long-term goals in a financial plan are too rigid, many clients may not be naturally inclined to stick with those goals or even with the financial advisor. It can be especially difficult for clients to stick to a strict ‘goals-based’ approach when their long-term goals are likely to change, or when the goals that their financial advisor conveys as important are not clearly connected to the client’s bigger ‘why’.

In our 91st episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss why setting goals overall is an important step in developing a financial plan, but how structuring those goals around a broader sense of direction can guide the financial plan toward achieving more client satisfaction over time.

As a starting point, it’s important to recognize that goals are just guesses that are highly subject to change. Often, goals set in the initial stages of developing the financial plan do not end up being the goals achieved (which is okay!). While it is a good idea to create a roadmap for clients with long-term goals, leaving only a little room for flexibility and change can make it challenging for clients to commit, especially when they are unsure about why the goals are important in the first place. In reality, life will always change and nearly all goals will have to be adjusted at some point in time. A good way for advisors to meet the clients in the middle is to set smaller, more flexible goals that identify the clients’ desired "direction" so that they can set loose, adaptable "goals" and course-correct along the way.

Ultimately, the key point is that a ‘goals-based’ approach is not a one-size-fits-all solution. Because the future is uncertain, goals need to be reevaluated, clarified, and adjusted over time. And goals that are not based on a client’s current reality can be difficult for clients to connect to. Importantly, as the advisor/client relationship matures and goals are clarified, having flexibility allows for a deeper understanding by both advisor and client of why these goals are important. Furthermore, when the intent behind achieving the goals is understood, deeper trust – and longer-lasting relationships! – between the client and the advisor are established, instilling more confidence that goals will be achieved.

#FA Success Ep 290: Serving Neurodivergent Clients As A Financial Advisor With Autism, With Andrew Komarow

July 19, 2022 07:02 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Andrew Komarow Podcast Featured Image FAS

Welcome back to the 290th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Andrew Komarow. Andrew is the founder of Tenpath Financial Group and Planning Across the Spectrum, a hybrid firm based in Farmington, Connecticut that oversees $100 million in assets under management for 100 client households.

What's unique about Andrew, though, is how he, as a financial advisor with autism, has built a firm with a specialized niche of autistic and other neurodivergent clients, helping them navigate their unique and complex financial planning challenges.

In this episode, we talk in-depth about how being diagnosed with autism as an adult helped Andrew understand himself better and realize he had an opportunity to niche-focus his firm to serve clients who are also neurodivergent adults, how the combination of creating a separate website for Planning Across the Spectrum and leveraging a Facebook group for the special needs community has helped Andrew develop a steady path for growth in his specialization, and how Andrew created an impact investing index that he labeled as a “Neurodiversity Index,” with 79 companies that embrace neurodiversity and inclusion (because on the periodic table, gold is represented by the letters AU, and its atomic number is 79).

We also talk about how, despite never graduating high school (but gaining a GED later), Andrew credits his autism and the hyperfocus that comes along with it for helping him to ultimately earn more than 16 professional financial planning designations, how working at an insurance company early in his career and getting frustrated with adhering to large-firm corporate rules helped Andrew realize he liked giving financial advice to clients but was going to need to be more independent to have the control to serve his unique clients the way they need to be served, and how an unexpected separation from that insurance company ended up being a blessing in disguise as it forced Andrew to find a new growth path that led him to focus into his ideal client type and ultimately fueled the launch his own firm.

And be certain to listen to the end, where Andrew shares how he was surprised by how much he actually enjoyed building his own firm and having the flexibility to decide for himself what procedures and roles are put in place, why Andrew believes we are too hard on ourselves and how important it is to be kinder to ourselves about the challenges we face, and why Andrew feels the best business decision he ever made was hiring his first team member to assist him even before he really had the revenue to afford it… because it was the only way he’d be able to grow and scale further.

So, whether you’re interested in learning about how Andrew took advantage of the separation from his former firm as an opportunity to serve the types of clients he preferred and in the way he wanted, how receiving an autism diagnosis as an adult not only gave Andrew a better understanding of himself, but also how he could help other neurodivergent adults navigate their financial challenges, or how Andrew leverages educational tools on his website, along with Facebook groups, to maintain a steady path of growth, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Andrew Komarow.