May 28, 2013

Michael Kitces: The 2013 IA 25 Extended Profile

Director of research, Pinnacle Advisory Group; publisher, The Kitces Report and Nerd’s Eye View

Michael Kitces' self-professed nerdiness is the industry's gain Michael Kitces' self-professed nerdiness is the industry's gain

This is Michael Kitces’ second appearance on the IA 25. Read his extended profile from 2012 IA 25 here. Click here to view the complete list and Special Report schedule for extended profiles for each of the 2013 IA 25 honorees.

As he ticks off trends he sees in the advisor industry, Michael Kitces, publisher of the e-newsletter The Kitces Report and the blog Nerd’s Eye View, envisions that technology-augmented advisors will trump traditional advisors over the next 10 years. Indeed, Kitces foresees that society is headed toward a central computer experience where all the world will be a supercomputer – and, no surprise, he proudly lays claim to being a big nerd.

“I’m a Star Trek fan, a Star Wars fan, a Firefly fan. I’m a nerd,” said the 35-year-old, two-time IA 25 winner. (Kitces, whose thoughts appear frequently in the pages of Investment Advisor as well as on sister website AdvisorOne.com, also was an IA 25 honoree last year).

Kitces’ nerd-dom is the advisor industry’s gain. His thoroughness when studying financial planning has not only led to his earning a string of designations – MSFS, MTAX, CFP, CLU, ChFC, RHU, REBC, CASL – but has allowed him to bring his knowledge to the conference circuit as a sought-after speaker. In the last year, Kitces has completed 55 speaking engagements.

The Financial Planning Association (FPA) gave him a “Heart of Financial Planning” award in 2010 for his dedication to advancing the financial planning profession, and in April, financial information firm BrightScope announced that Kitces has joined its advisory board to help bring more fee transparency to the advisor world.

Certainly, he appreciates the flexibility afforded to him in his position as director of research for Pinnacle Advisory Group, a private wealth management firm located in Columbia, Md. This year, Pinnacle made Kitces a partner at the same time that his career has led him to become the practitioner editor at the FPA’s Journal of Financial Planning and to publish a new edition of his annuities textbook.

Yet true to his nerdy nature, Kitces takes equal pride in the growing metrics of his website, Kitces.com, and his blog, which has seen between five times and seven times traffic growth in the last year.

“One of the most noticeable things in the digital world is its wealth of analytics,” he said. “I can measure exactly how many readers I got from a particular article, which helps everything from measuring the efficacy of marketing and making good strategic decisions to doing good time management. These are things we couldn’t measure effectively in the past. That‘s one of the hidden virtues to the business being more digital. We can track and measure in a way we couldn’t before.”

Looking to the broader financial planning arena, Kitces said that as advisors gain greater professional recognition, along with all the complications of regulations and standards that accompany that success, changing technology will only highlight the need for the human connection between advisors and their clients.

“While I’m upbeat for the future of advisors, especially as technology advances, it’s not easy to be an advisor now, especially with the stresses and strains of our turbulent markets exacerbating the issue,” Kitces said. “You can make an algorithm to figure out an asset allocation, but you can’t make an algorithm to figure out a way to distribute your estate to two spendthrift children.”

So enthusiastic is Kitces about the future of technology for advisors that he’s taking the nerd’s way around the topic and writing a book about it: “The Future of Financial Planning in the Digital Age.”

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