The Value Of Advisor Study Groups – Not Just Studying Financial Planning, But Mastermind Your Business And Career

Author: Michael Kitces

Team Kitces

Michael Kitces is Head of Planning Strategy at Buckingham Strategic Wealth, which provides an evidence-based approach to private wealth management for near- and current retirees, and Buckingham Strategic Partners, a turnkey wealth management services provider supporting thousands of independent financial advisors through the scaling phase of growth.

In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.

Read all of Michael’s articles here.

What Is An Advisor Study Group?

Given the flexibility and varying nature of groups in general, there really is no specific or consistent definition of an advisor study group. At the most basic level, an advisor study group is simply about a group of advisors who come together to meet on a regular basis to discuss, analyze, and come up with solutions to the challenges they face.

While the study groups that most are familiar with from their high school or college days may have studied matters of an academic nature, in practice it seems that most financial advisor study groups focus more on practice management and personal career development than discussing technical financial planning tools and strategies. In fact, such groups are sometimes dubbed "Mastermind" groups in recognition of the more advanced concepts and focus - typically going far beyond "just" studying financial planning topics and strategies.

Thus, for instance, some advisor study/mastermind groups might talk about the challenges occurring in their financial planning business. Others even require all members to openly share their business books, creating a level of transparency that makes it feasible to discuss even the stickiest of business issues with the group (and have group members analyze and constructively critique your business decisions!). Though notably, the focus does not have to be solely on the challenges of owning a business. There are also study groups that share investment ideas across investment teams, some that bring together Operations Managers to discuss operational issues, and some that form amongst advisor employees to discuss their own personal career track and how to advance themselves.

How Do Advisor Study Groups Form?

While some study groups to analyze technical planning issues may form locally, most study groups that focus on business and career issues seem to be geographically distributed across the country. The reason, in large part, is because it can be awkward to discuss issues like staffing problems with a local competitor who could actually then poach your staff members, or marketing challenges with a firm that is pursuing the same target clientele. Given that most advisory firms are confined to their local geographic market, a nationally-dispersed study group generally eliminates any risk that the firms will feel like they’re competitors.

Given this dynamic, most study or mastermind groups seem to form through connections/relationships made via joining professional associations (e.g., the FPA or NAPFA) and getting involved as a volunteer or by attending national conferences (which provides the opportunity to meet non-local advisors), or by seeking out such connections through the advisor’s custodian or broker-dealer. As the advisor’s personal network grows, and he/she meets more and more advisors who are at a similar point in their career/business, the core membership for a potential study group emerges.

And notably, the reality is that it is generally the similarities that drive the group formation – I find most are created and populated specifically by people who found themselves in very similar circumstances, and as a result were seeking out others facing similar challenges to gain insight, ideas, and a supporting community. Some groups as they form will go so far as to make very specific participation requirements, such as that the advisors have a:

- Certain number of years of experience (e.g., 10+ years, or <3 years)

- Specific role role (e.g., partners, advisors completing a succession plan, operations staff, etc.)

- Particular business model (e.g., fee-only, monthly retainer, insurance-based)

- Specific amount of revenue (e.g., only those with at least $500,000 of gross revenue, or no more than $200,000 who are trying to cross that line)

- Certain size of business and staff (e.g., only those firms who have at least 2 partners and 5 staff).

The idea, with all of these requirements, is to ensure that all the advisors of the group are at a similar point in their career/business and face similar challenges by which they can learn and share with each other.

What Do Advisor Study Or Mastermind Groups Actually DO?

So once an advisor study or mastermind group forms, what does it actually do? Not surprisingly, this too varies a lot depending on the group, its members, and what they’re looking to accomplish and gain from each other.

Most study groups will create a message board or email listserv for themselves (e.g., using Google Groups for an email list, or by creating a Google+ Community or a private LinkedIn Group). This forms the hub for (private) group communication.

Next, most groups establish some kind of “meeting” process. The meetings might vary from gathering in person once or twice a year at a central location (e.g., at a hotel, at a member’s house or office, as an extension to an existing conference they’re all planning to attend anyway, etc.), to doing monthly or quarterly conference calls, to doing a weekly Google group Hangout on video.

Agendas for these meetings will vary by format, but typically involve one or several study group members bringing a business/career/client challenge to the group to share openly, and receive candid feedback, constructive criticism, and group wisdom. Some groups have a specific rotation where each person shares (e.g., for 1 hour each at an in-person meeting, or to focus on one member’s business each conference call), while others may simply keep the floor open for anyone who wants to bring up a recent client or business issue.

Some study groups will occasionally bring in an outside expert to share as well. This may be via participation in a group conference call, or even bringing an outside expert to speak to the group. For groups that mix in some technical planning content and strategies, outside experts are also popular, and some groups will invite certain expert vendors or wholesalers to speak to the group as well (especially if the group includes “larger” firms that may be prospective clients for the vendor/wholesaler’s company). In one group I know, they decided to vet rebalancing software packages for the entire group by assigning each group member to do due diligence on one solution and present to the group, and the group then voted for the leading two vendors that would come out to the next in-person study group meeting to make final presentations and group members could decide for themselves which they wanted to implement in their own practices.

For a few of the largest and longest-standing study groups, the group actually becomes a platform to engage in thought leadership for the entire industry, as has been done by “famous” industry study groups like Zero Alpha Group, and the Alliance for RIAs Study Group. Though for many others, the purpose is simply focused solely on the members and their own success.

Requirements To Participate In An Advisor Study Group

While there aren’t a lot of “requirements” to create and/or participate in an advisor study group, without a doubt the key starting point is that it’s absolutely essential that the groupmates trust each other – or have the opportunity to bond and connect enough to trust each other. If the study group participants don’t feel they can openly share and communicate, most of the value of the advisor study group disappears. In some cases, study groups will even require that members sign a confidentiality or nondisclosure agreement for what is discussed in the group, while others it’s simply part of the acknowledged code of conduct (but not a signed obligation).

Generally, most study groups will need at least one person to be the organizer and driver to get it started, especially in the beginning in doing outreach to prospective members, and creating a means for group members to communicate (e.g., creating a listserv or message forum). For groups that meet in person, there are some additional organizing responsibilities necessary; for some study groups, that may be done by one person in particular (and/or with support from his/her staff), while others rotate the responsibility. Still others require members to contribute some dollars into a common pool that is used to cover everything from administration to software to the facilities for the group meetings themselves (or in some cases, to pay an executive director to handle those tasks!).

Most groups also have – or end out creating – some process to add and remove group members. Generally, most groups only ever add a member based on the unanimous agreement of the group, as if there’s not comfort from everyone about a particular member, the group communication can be significantly damaged. Most groups, once formed, seem to add or change members relatively infrequently, although in some cases a “problematic” member may be removed and replaced, and in other times a member simply decides that the group is no longer a fit and decides to move on (and is replaced).

Anecdotally, study groups seem to vary in size from a minimum of about 5 members to a maximum of around a dozen (as too many more makes it difficult to communicate effectively, and for everyone to get a turn sharing their challenges).

Benefits Of Joining An Advisor Study Group

So what is it about advisor study/mastermind groups that makes them so popular?

Ultimately, it seems to come down to the benefit of having a group of professionals peers with whom you can be completely open and transparent, to receive the kind of feedback and advice – whether it’s constructive criticism or a friendly push – that’s difficult to deliver until all the facts are on the table. In practice, many advisors I know in study groups are so engaged with the study group that going to each of the group gathering(s) are their can’t-miss meetings of the year. (Although to ensure continued group intimacy, some study groups actually require a high level of ongoing attendance/participation.)

While sometimes the study group “breakthough” is simply how to implement a particular advanced planning strategy, personally I’ve known advisors in study groups broach issues from leaving their job/firm, to firing a key employee, to negotiating a succession plan (as either the buyer or the seller), and making various big business or career strategic changes. For one advisor I knew, his study group was the support he needed to break out of a business partnership that had turned sour. For another, his study group was where he first raised the awkward issue of how to manage his business going forward if he divorced his wife for cheating on him… an especially difficult issue given that she was also the current office manager!

In other words, the reality is that for many successful study groups, it really is more about a "mastermind" group to advance your business or personal career, and the name “study group” alone can understate the significance of personal breakthroughs that can be achieved by having a group of like-minded peers who can provide the crucial feedback necessary to really move forward.

Creating Or Joining A Study Or Mastermind Group

For most, it seems the hardest part of creating or joining a study or mastermind group is just getting started. Fortunately, there are some resources to help.

For those who are NAPFA members, the national organization has some resources to help organize a study group with other members. Many study groups have also self-formed from gatherings at national conferences, from FPA to various custodians and broker-dealers, and the latter often have their own additional resources to help create study groups. If you reach out to peers to potentially a study group, and find out they’re already a member of one, you might also ask them what’s involved to join (but don’t be offended if they say there are no openings, as again I’ve found that most study groups don’t add/change members very often after forming!).

Alternatively, for those who are interested but know of no other paths, feel free to leave a comment to the post below, with a little bit about your background and what you’re looking for in a study/mastermind group. If enough people are interested, perhaps you can get your first study group kickstarted right here!

So what do you think? Are you looking to join a study/mastermind group? Are you already a member of one? How does your group meet, and what do they talk about? What are you study group “best practices”?