From the February 2007 issue of Investment Advisor • Subscribe!

A Look Ahead, and Advice on Today

"We're under capacity by 60,000 planners," predicts Percy Bolton of Percy Bolton Associates in Pasadena, California, partly due to the creation of the "fiduciary advisor" under last year's Pension Protection Act. The shortage of planners will be exacerbated, suggests Bolton, when the U.S. government steps in as the financial planner of last resort for those who have failed to adequately save for retirement. Following the example of medicine, Bolton says the government is likely to take a capitation approach to retirement planning, paying the majority of planners a preset amount per head to provide advice. "You know what that approach did to medicine," he warns. Following stunned silence from advisors who know full well what the HMO/PPO model did to doctors' fees, it's Deena Katz of Evensky & Katz in Coral Gables, Florida, who responds. "Percy," Katz deadpans, "you're scaring the crap out of me!"

While that was perhaps the most sensational episode during the recent conference call of the Investment Advisor Leaders' Council, it was one of many examples of how successful advisors can yield insight into the issues facing the profession now and in the future.

The nine Leaders who spoke candidly on January 10 and the remainder who submitted written notes were generally optimistic--several reported achieving record results in terms of AUM, revenue, and numbers of clients. As Stuart Zimmerman of Buckingham Asset Management in St. Louis put it, "the demographics are terrific for our businesses for the next 10 years, so we should all do great because there are plenty of clients who need to be served and there aren't enough of us to serve them."

One of the greatest challenges, the Leaders agreed, is to attract more people to the profession as it ages and as demand for its services grows. "The profession is struggling around personnel issues," admitted Lou Stanasolovich of Legend Financial in Pittsburgh, and last year his firm focused on the issue, building "an employment classification for every position in the firm."

Katz, who spends much of her time teaching at Texas Tech University, says it the responsibility of the old hands to resolve the problem. "I believe that it takes an old doctor and a young physician to give good patient care," says Katz. "That's the way I feel about what's happening in our practices--we need to bring in the new people and let all of us work at our highest and best use."

Myra Salzer of the Wealth Conservancy in Boulder, Colorado, says that when her firm needs to add staff, "everyone spends a couple of weeks looking at how they're spending they're time and then writing down what they don't enjoy. We get this list from everyone, and it becomes the job description for out next employee." She says it can both "validate the people working with us that we care," while it also "cuts right to the chase on being clear on what we're looking for and finding someone who will enjoy doing that."

Mitch Kramer said he had "the best year ever" at his Dallas-based firm, Fluent Financial, despite a very "tough year personally" that involved not one but two terminal cancer cases within his immediate family." He credits his staff for the good year and extrapolates out to how other advisors can succeed. "You have to have the right people, the right clients--being very clear about who you want to work with. What's important comes into focus when you have these kinds of issues in front of you. Life is too short, and all of us have had one or two bad clients over the years, and they just suck so much of the energy and time away from the practice that you can't be there" for your other clients.

Peggy Cabaniss of HC Financial in Lafayette, California agrees that times are good and that finding "sustainable, viable business models" is just one of many challenges facing the industry, but worries about the lack of diversity in the profession, noting that while "25% of our profession is women, we have very low numbers for advisors when it comes to ethnicity."

When it comes to success, several Leaders championed the idea that success must be planned to be achieved and that, in the words of Scott Hanson of Hanson McClain Retirement Services in Sacramento, advisors "should build the business that works for them, not a business they're a slave to."

Don Schreiber of WBI Inc. in Little Silver, New Jersey, says success can come through a business plan, but in an often overlooked part of it. "Many people don't look at the personal vision statement [of a business plan] on what they want their life to look like. Because the business is supposed to facilitate more life, not take it away" Schreiber says that while "everybody talks about business planning, so few people actually do it," which is too bad, because "it's made such a difference in our business and for me in my life."

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