FP+Careers - Part 8

Summer Reading List Of “Best Books” For Financial Advisors – 2023 Edition

June 12, 2023 07:07 am 0 Comments CATEGORY: Personal/Career Development

While 2023 got off to a bumpy start for many advisory firms, still smarting from a rough prior year of market returns (and volatile revenue), a relative return to ‘normalcy’ means that for most, the advisory business has reached whatever its new post-pandemic normal will be. Firms that were returning to the office have done so, those that are staying remote are remaining as such, and either way most advisory firms have figured out how to continue to service and retain clients, and are slowly adapting to finding new (or reinvigorating old) paths to grow at least slowly once again. For which the approaching summer season is once again providing its usual respite – a time when most advisors take more time off (if only because clients are harder to pin down for summer meetings as more once again take summer vacations away from home)… and find some time to read and catch up on a few good books!

For those who love to read, though (and especially for those who have limited time and will only get to read just 1 or 2 books over the summer), the perennial question is always “so… what’s a good book worth reading this summer?”

As a voracious reader myself, I’ve always been eager to hear suggestions from others of great books to read, whether it's something new that's just come out, or an "old classic" that I should go back and read (again or for the first time!). And so, in the spirit of sharing, a few years ago I launched my list of "Recommended (Book) Reading for Financial Advisors", and it was so well received that in 2013 I also started sharing my annual "Summer Reading List" for financial advisors of the best books I'd read in the preceding year. It quickly became a perennial favorite on Nerd's Eye View, and so I've updated it every year, with new lists of books in 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, and a fresh round last year in 2022.

And now, I'm now excited to share my latest Summer Reading list of top books for financial advisors in 2023, from a new framework in how to think about our “Geniuses” in where we do our best work at work, to how to restructure the way we work for a remote (or at least partially-remote) workplace, how to re-set the growth foundation of the advisory business to be more competitive in an increasingly crowded landscape, a masterpiece on best practices in how to scale a (multi-)professional services firm (remote or in-person!), learning to give better feedback to team members, or migrating our own role in the business to be less advisor and more instructor, manager, or executive leader.

So as the summer season and summer vacations get underway, I hope that you find this suggested summer reading list of books for financial planners to be helpful… and please do share your own suggestions in the comments at the end of the article about the best books you've read over the past year as well!

Weekend Reading For Financial Planners (June 10-11)

June 9, 2023 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the House has passed legislation that would expand the definition of who qualifies as an accredited investor eligible to invest in certain private investments to include those who pass an exam designed by the SEC, and those with certain licenses or educational backgrounds, including financial advisors. And given the opaque nature of many private investments, financial advisors could play an important role in helping their clients assess whether these opportunities make sense for their portfolio and broader financial plan.

Also in industry news this week:

A study has found that during the past several years, investors are not just bypassing mutual funds for ETFs, but are increasingly investing in individual equities, shaped by a new wave of younger market participants
Congressional leaders are planning to introduce legislation that would fix a variety of drafting errors in “SECURE Act 2.0”, including sections regarding RMDs and IRA contribution limits

From there, we have several articles on cash flow and wealth:

Why being ‘rich’ and being ‘wealthy’ are not necessarily the same thing and how advisors can help clients identify the differences
How a client might have hundreds, and not just 4, “money scripts” that drive their financial decision-making
How exploring a client’s social-emotional relationship with money can help explain their spending decisions and other financial choices

We also have a number of articles on retirement:

Why many retirees are choosing “semi-retirements”, continuing to work part-time well after traditional retirement age
Why the biggest challenge retirees face could be replacing the social networks they built during their careers
3 techniques advisors can use to help reluctant retirees spend more

We wrap up with 3 final articles, all about the path to career success:

Why it is important to recognize that even the most successful individuals typically have to make sacrifices both along the way and in their current positions
How to identify and mitigate the “microstresses” that build up throughout the work week
How cultivating a sense of moxie can help individuals address “impostor syndrome”

Enjoy the ‘light’ reading!

Kitces & Carl Ep 113: What Does It Really Mean To Be A Lead Advisor?

June 1, 2023 07:01 am 0 Comments CATEGORY: Kitces & Carl Podcast

Kitces Carl Ep What Does It Really Mean To Be A Lead Advisor

While advancing a career in any industry can be challenging, the lack of formal career development programs offered in the workplace for associate advisors can make it particularly difficult for them to gain the experience they need to become lead financial advisors. And since managing the client relationship – a key responsibility for lead advisors – relies so heavily on nuanced ‘soft’ skills that are gained only through direct experience, finding ways to get hands-on experience is crucial for associate advisors to demonstrate their value and gain the skills to advance in their careers.

In our 113th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss what it means to be a lead advisor, the paths associate advisors can take to advance into a lead advisor role, and how to communicate career growth goals with senior advisors.

While different firms may use different titles, the common theme of all lead advisor roles goes beyond providing advice to the client to managing the client relationship. This means actively engaging with clients to create an exceptional client experience, managing expectations, ensuring that questions are answered, and resolving issues in a timely manner. And even though there may be numerous books on managing relationships, there are few resources that actually offer associate advisors the opportunity to apply the information in the workplace. Which means it’s essential for them to take a proactive approach to find those opportunities, most often in the forms of hands-on experience (e.g., working with clients directly) and observation (e.g., participating in client meetings led by senior advisors).

For associate advisors who don’t (yet) have the opportunity to work directly with clients, communicating their career goals and positioning themselves as an asset that lead advisors find valuable can benefit both the associate and lead advisor. For example, the associate can ask to gain experience by attending meetings and taking meeting notes; this allows the lead to focus more on the client, who can also ask the associate to draft follow-up emails. And by asking for increasing responsibility to handle tasks that smaller clients may need, associate advisors can eventually gain the confidence of lead advisors to be permitted to gradually take over those relationships, freeing the lead advisor’s time to focus on the more complex needs of larger clients.

Ultimately, the key point is that a proactive approach to seek hands-on experience can position associate advisors for a successful transition into the role of a lead advisor. Becoming more involved in client relationships can demonstrate their dedication to the firm while gaining the valuable experience they need to advance in their careers. And by clarifying and communicating their goals for professional growth, associate advisors can also assess how the firm will support their growth aspirations or whether considering opportunities elsewhere might make more sense… helping them to create a better, more fulfilling career as a financial advisor!

#FA Success Ep 335: Systematizing Succession And New Partner Transitions In A $1.5B Ensemble Enterprise, With Timothy Wyman

May 30, 2023 07:03 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Timothy Wyman Podcast Featured Image FAS

Welcome back to the 335th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Tim Wyman. Tim is a Managing Partner for the Center for Financial Planning, a hybrid advisory firm based in Southfield, Michigan, that oversees $1.5 billion in assets under management for 1,000 client households.

What's unique about Tim, though, is how, as a second-generation partner, he helped redesign the firm’s organizational structure from siloed advisors to an ensemble practice, both restructuring the firm’s compensation, and in the process systematizing future partnership opportunities to both next-generation financial advisors and key non-advisory team members to ensure continuous internal ownership of the firm for the long term.

In this episode, we talk in-depth about why Tim and another G2 partner decided to transition the firm from a siloed advisor structure to an ensemble to both fulfill the vision of first-generation partners to evolve the firm into an enterprise and also create equitable partnership opportunities for all employees of the firm, how Tim and his firm worked with Philip Palaveev to develop their "Center for Financial Planning Path to Partnership" document to outline buy-in options and the quantitative and qualitative criteria employees must meet to become a partner, and why Tim and his firm implement a monthly scorecard called the "State of the Center" and a bi-annual report using Moss Adams benchmarking ratios to monitor the financial health and productivity of the firm.

We also talk about why Tim and the firm don’t assign a dedicated CSA for each lead advisor but instead ensure that each client has a dedicated CSA to keep the client relationship consistent (even and especially as planner and ownership transitions occur), why Tim and the firm ensure their newer associate planners are involved in all client-facing activities instead of just working on back office support so that they can learn different relationship-management skills in real-time from the senior advisors themselves, and how Tim leverages the firm’s proprietary CRM and its integration into Tamarac to automate tasks and compile data for their Annual Review Reports for clients – cutting down his total meeting prep time to just 15 minutes per client.

And be certain to listen to the end, where Tim shares how he was surprised by how much complexity is involved in growing and scaling a firm past 10 and then 20 employees but feels rewarded by seeing how much of an impact the firm makes, why Tim feels that it’s important for younger, newer advisors to find a mentor they truly respect as a person and as an advisor early in their careers (even if it’s not a formal mentorship) to build better career opportunities for themselves, and why Tim believes that developing a successful career path doesn’t always have to be complicated and can be built upon working just a little bit harder than others and focusing on mastering a few core skills like writing, speaking, and treating clients well.

So, whether you’re interested in learning about why Tim is considering instituting lower capacity limits for CSAs than lead planners, how Tim and the firm’s other partners structured partnership opportunities and buy-ins, or how 2 of the Center for Financial Planning’s founding partners, 3 of the current partners, and 40% of financial advisors are women, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Tim Wyman.

Accelerating Firm Growth With A Niche: How I Built A $48M AUM Advisory Firm In 3 Years

May 29, 2023 07:03 am 0 Comments CATEGORY: Practice Management

When a financial advisor starts their own firm, they face many important choices. One of the key decisions is determining the type of clients they want to serve. Some advisors may choose to take a generalist approach that leaves the door open to working with the broadest possible pool of prospective clients. But with hundreds of thousands of financial advisors competing for the same prospects, it can be challenging to build a generalist advisory business from scratch. Alternatively, many advisors select a client niche to serve and specialize in these individuals’ specific needs, which not only helps clients feel understood but also helps the advisor improve the efficiency of their practice.

In this guest post, Ryan Townsley, founder of Town Capital, an independent RIA, explains how he made the transition from nuclear power plant employee to financial advisor and the process he went through starting out as a generalist who transitioned into a niche where he now works with clients from his former profession.

When Ryan first opened his firm after 15 years in the nuclear power industry, and only a few months working as an advisor, he marketed himself to the broadest range of potential clients possible, using generic marketing and content creation. But after experiencing tepid business growth, he soon realized that he did not stand out in the sea of generalist advisors. So he decided to pivot and serve a niche with which he had significant experience: the nuclear power industry. As a former nuclear engineer, Ryan’s access to specialized knowledge – from understanding how workers in the industry think, to the challenges of their careers, and the financial considerations that come with employment in the industry – helped him decide that this was a niche market he could serve very well.

Ryan’s first step was to redesign his website. He replaced his generic graphics with themes that would be relevant to nuclear power plant employees and made it clear that he would be the go-to planner for those in the industry. His next step was to systematize his planning process to help him work more efficiently as a solo firm owner. And because nuclear power is a process-driven industry, the use of standard workflows was familiar ground for many of his prospective clients. He also built redundancies into his planning process (e.g., using two different risk tolerance assessments), which resonated with his target clients accustomed to built-in redundancies as a key part of operating nuclear power plants. Finally, Ryan created a private Facebook group exclusively for nuclear power workers, where he posts webinars that demonstrate his expertise in addressing the group members’ specific financial needs. And while many members view the free content for their own educational purposes, nearly 20% of the group’s members have become clients!

Ultimately, the key point is that serving a niche has allowed Ryan to build a growing solo practice that allows him to have a solid work-life balance. His experience demonstrates the benefits of using specialized knowledge to create a planning experience that resonates with a firm owner’s target market and creates a more efficient and enjoyable practice!

Weekend Reading For Financial Planners (May 27-28)

May 26, 2023 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that while banks have been able to attract a younger and more diverse set of financial advisors compared to the rest of the industry, thanks in part to their built-in referral stream, a relative lack of independence and dated technology could lead some of their advisors to explore options with independent RIAs.

Also in industry news this week:

How consumer concerns about the stability of the banking industry could present independent advisors with an opportunity to add value by managing client cash
Why an advisor’s fiduciary duty can sometimes come into conflict with the best insurance options for their clients

From there, we have several articles on marketing:

While many firms have grown in the past several years thanks to market performance and M&A, a recent study shows that the average RIA had negative organic growth during the past 5 years
How firm owners can develop a “business development culture” throughout their firms
The differences between client referrals and word-of-mouth marketing and how advisors can use each to attract prospective clients

We also have a number of articles on retirement:

How retirees (and their advisors) can use “mastermind” groups to learn from and build a community with their peers
A survey of what people tend to care about less as they age, from trying to impress others to prioritizing their career over other interests
How the choice of where to live in retirement can impact a retiree’s longevity

We wrap up with 3 final articles, all about creativity:

How the most effective companies encourage innovative ideas among their employees
Why better sleep might be the ultimate ‘hack’ for achieving better productivity and creativity
Why persistence can be the key to turning a good idea into a great one

Enjoy the ‘light’ reading!

#FA Success Ep 334: Finding Clarity On Fees And Clients By Allowing The Business To Evolve Over Time, With Meg Bartelt

May 23, 2023 07:07 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 334th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Meg Bartelt. Meg is the Founder and Lead Financial Planner for Flow Financial Planning, a virtual RIA serving mid-career women in tech that oversees almost $60 million in assets under management for 60 client households.

What's unique about Meg, though, is how, over the span of 7 years since launching her firm, she has evolved the business by repeatedly adapting her niche focus, iterating on different fee models, experimenting with various client meeting cadences, and both increasing and decreasing her staff headcount with various support team structures, all in the journey of honing in on the ‘right’ type of practice that Meg will enjoy running, and serving clients with, on an ongoing basis.

In this episode, we talk in-depth about how, when Meg launched her firm, she began with a $150 per month minimum fee but quickly realized that it was not enough to sustain the business she wanted to build and began to raise her fee minimums to what ultimately became $10,000 per year minimum (after her business coach helped her realize that is what her financial planning is really worth to her clients), why Meg evolved her niche focus from working mothers in tech to early to mid-career women in tech with a specialization in pre-IPO and IPO planning as she realized by being more specific, she could create better efficiencies in her own practice by simplifying what she did (and didn’t) need to focus on for her clients, and how, after a year of experimenting with surge meetings, Meg decided to go back to annual review meetings because she found the structure didn’t allow enough flexibility for the unique complexity of her clientele… and created challenges in finding the ‘right’ time to take on new clients.

We also talk about why Meg chose her niche focus of women in tech because she believes that what makes a niche market really powerful is finding clients with a shared identity (as that makes it easier to find where they gather to reach them), why Meg feels strongly about setting fees in explicit dollar amounts and actually locks her clients’ annual AUM fees at a fixed dollar amount that resets once each year, and why Meg views evolving her firm over time as a comfort, not a frustration, because it allows her to keep finding better ways to serve her clients while also creating more space for herself and a better experience in managing her practice.

And be certain to listen to the end, where Meg shares how she sought advice from her business coach, therapist, and colleagues to come to terms with having to let a staff member go to relieve some of the economic constraints her practice was experiencing after a year of market volatility and changes in the tech industry in 2022, why Meg feels comfortable with evolving her fee model, service model, and other aspects of her business because she feels that as long as she holds true to being there for her clients when they need her, she is continually building a successful business despite any ongoing changes, and why Meg feels that she is now transitioning to a second stage of her life where she prioritizes less on maximizing the income of the business and more on creating more space and freedom in her business to foster deeper relationships with her clients, those around her, and especially, her 2 daughters.

So, whether you’re interested in learning about how Meg adjusted to changing family dynamics when she became a business owner, how Meg handled the unfortunate situation of having to let a staff member go which was not due to performance issues, or why, as a business owner, Meg feels it’s sometimes better to experience when something doesn’t work to better understand why, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Meg Bartelt.

Best Practices For Running A Financial Planning Internship Program (And Creating A More Productive Outlook)

May 22, 2023 07:07 am 0 Comments CATEGORY: Planning Profession

Traditionally, financial planning internship programs have offered students who are aspiring financial planners a way to prepare for entering the workforce by gaining real-world experience in advisory firm settings (as well as a way to get their foot in the door with prospective employers). But when the COVID-19 pandemic arrived in 2020, many firms shut their offices and went fully remote, which forced them to either rapidly reconfigure their internship programs or – as was more commonly the case – to suspend their internships or end them entirely.

Recognizing the potential impact that a lack of internships for a generation of planners could have on the industry, in 2020 the Financial Planning Association (FPA) launched "The Externship", a virtual program that provided participants with access to mentorships with financial planning practitioners, technology commonly used in financial planning, and the opportunity to apply hours from the program towards the experience requirement for CFP certification. And while the original vision for The Externship was to provide a 1-year stopgap solution for a few hundred attendees, ultimately over a thousand students signed up in 2020 – because as it turned out, the virtual structure of The Externship opened up opportunities to participate not only for students whose internship opportunities had been disrupted by the pandemic, but also for those who (due to working, caretaking, and other commitments) would have never had the ability to participate in a traditional internship in the first place!

In this Guest Post, Hannah Moore, the creator of The Externship, offers her perspective on how lessons learned from The Externship (which is now entering its 4th year) can inform advisory firm leaders on how they structure and implement their own internship programs to create potentially better outcomes for interns, employees, the firms themselves, and the industry as a whole.

In the wake of the pandemic, many advisory firms have adopted a ‘new normal’ of either hybrid or fully-remote work, providing an opportunity for them to rethink how they conduct their internship programs. While adopting a ‘business-as-usual’ mindset towards internships makes little sense when business as usual has changed so dramatically since 2020, the success and growing popularity of The Externship has suggested that even before the pandemic, the traditional internship model wasn’t working as well as it could have, either for interns or the firms they worked for.

For interns, a good internship can increase the chances of getting a job offer, from either the firm that they interned with or other firms who value the experience that the intern received from the program. But firms benefit as well, with the opportunity to thoroughly vet and observe potential employees and to showcase themselves to prospective talent. And there are even advantages for the firm’s existing employees who mentor the interns: the opportunity to train, teach, and manage interns can provide valuable leadership experience to benefit their own career development.

Ultimately, the key point is that today’s interns – whether they participate in industrywide programs like The Externship or in internships at the individual firm level – represent future generations of leaders in the financial planning industry. The ways that firms implement their financial planning internship programs not only influence the financial planning philosophies and practices that interns develop throughout their careers, but can also impact how diverse and equitable the profession will be in the future. Which means that internships play an instrumental role in moving the profession forward, and by creating internships that are better, more intentional, and more accessible, firms can make for a more productive outlook not just for the benefit of their own businesses and employees, but also for students and the industry at large!

Weekend Reading For Financial Planners (May 20-21)

May 19, 2023 02:00 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news of a recent survey indicating that investors overwhelmingly believe that Artificial Intelligence (AI) will help financial advisors better serve their clients and would like to work with an advisor who leverages AI tools. And despite some industry observers’ concerns that AI tools could eventually replace human advisors, a strong majority of those surveyed said they do not expect AI to replace advice from humans. And amid this backdrop, several AdvisorTech tools have added AI capabilities that could further streamline advisory firms’ middle- and back-office tasks and processes.

Also in industry news this week:

CFP Board adopted a set of revised procedural rules, including establishing the ability to conduct “informal inquiries” in response to complaints to better identify potential wrongdoing
A patent that allowed Vanguard to launch ETFs as share classes of its existing mutual funds expired this week, but it is unclear whether other asset managers will take advantage of the new opportunity

From there, we have several articles on practice management:

What actions advisory firm owners can take when they find they have too much work on their plate
How advisors can explore different paths for their firms once they have been in a robust client pipeline
How one advisory firm owner made changes to ensure her business serves her rather than the other way around

We also have a number of articles on cash flow and wealth:

One potential framework to describe levels of wealth, from not stressing about debt to not worrying how much is spent on a vacation
Why having “FU” money is not necessarily the key to freedom and happiness
While it has long been assumed that buying ‘experiences’ typically make individuals happier than purchasing ‘things’, recent research suggests a more nuanced view might be warranted

We wrap up with 3 final articles, all about gender and money:

Why men and women often have different views of what retirement means to them
Why telling women to act more confidently is unlikely to improve the gender pay gap, and what employers can do to even the playing field
While prior research has found that women report poorer mental health than men, a new study suggests the reality might be more nuanced

Enjoy the ‘light’ reading!

Offering Tax Preparation As A Solo Advisor: How To Attain Designations And Create A Schedule By Next Tax Season

May 8, 2023 07:04 am 0 Comments CATEGORY: Practice Management

Traditionally, financial advice and tax preparation have existed as 2 related, but separate, services. Besides the fact that many financial advisors don’t hold the necessary credentials (e.g., CPA, EA, or JD) to prepare tax returns and represent clients before the IRS, there has also been the impression that there is simply not enough time for one person to do both. This means that, while many advisory firms have in-house tax preparers (and vice versa), it is relatively uncommon for financial advisors to be the ones doing tax preparation themselves.

For solo advisory firm owners, however, who are largely able to decide for themselves how to provide value for their clients, offering tax preparation can be a way to provide a service that is in demand from many clients (particularly at a time when there is an acute shortage of available tax preparers on the market), while adding to the year-round value the advisor is providing and deepening the client-advisor relationship.

In this post, Kitces.com Senior Financial Planning Nerd Ben Henry-Moreland writes about how he went from being hesitant to offer tax preparation at his solo RIA (given how common it is for tax preparers to work long hours throughout tax season) to embracing it as a core part of the business’ service offering.

One of the keys to this shift in thinking was the realization that, rather than preparing taxes on top of and alongside the ongoing advisory schedule of financial planning updates and client meetings, it could instead occupy its own slot on the ongoing client service calendar. In other words, by clearing space during tax season to focus full-time on tax preparation, it was possible for Ben to contain tax prep work to a reasonable number of hours. Furthermore, similarly structuring the client service calendar for the remainder of the year to focus on specific topics at set times (e.g., investment reviews in the summer, retirement projection updates in the fall, and year-end tax planning in the winter) created enough efficiency through systematizing the ongoing financial planning process that allowed him to fit in tax preparation without reducing any of his other service offerings!

Although it can take as long as a year to get fully set up to prepare tax returns – from obtaining a designation such as the EA to deciding on pricing and software, to developing processes and workflows to streamline tax season as much as possible – advisors may find that many of the tools they use for their advisory business (such as CRM, data gathering, and electronic signature software) can also be used for tax preparation, and that the advisor’s existing knowledge of their clients’ financial and tax situations makes it possible to streamline the process even further (e.g., by tailoring client data-gathering worksheets to focus on the information that is relevant to a client’s tax situation).

The key point is that, offering tax preparation can be seen as a way for solo advisors to use their existing tools and expertise to enhance the year-round value they provide. Which ultimately means that it can be well worth the investment in time and resources given how valuable of a service tax preparation is to many clients!