Meetings of the Mind

If you’re an independent financial planner, it can get pretty lonely out there. The more independent, the more likely are your chances of working in the dark, sometimes devoid of peer contact entirely. Frank Presson of Presson Financial Associates in Tucson knows the feeling. “You start your own business, you’re running around having a great time, and at some point you start wondering, ‘Gee, am I doing something right? I’d really like somebody to talk to.’”

Sentiments like these induce planners to join trade organizations such as the National Association of Personal Financial Advisors and the Financial Planning Association, which offer members plenty of resources, support, and a chance periodically to get together. As an adjunct to trade association benefits, however, an increasing number of advisors is discovering the value in local study groups. We hope that by sharing the experiences–from start-up to follow- through–of financial advisors who are local study group members or leaders, you may consider becoming involved, too.

My Place or Yours?

The study group trend applies naturally to small shops, but also benefits firms that have grown so large that not all employees can attend a given national or regional trade group conference. Formal or informal in structure, large or small in size, study groups afford like-minded advisors the opportunity to trade war stories, share vision and purpose, network, learn from one another, and have a good time together when they meet. As Dick Sawyer, president of Norton Financial Services in Portland, Maine, says of his eight-member New England-based study group: “It’s not that we would have failed without the group, but we’ve all improved because of it–personally, professionally, and monetarily.”

Some study groups are organized under the auspices of trade organizations. As such, they are a component formed by the natural hierarchical breakdown of a large national association into regional sections and sub-regional groups. They go by various names including chapters, societies, and study groups. Presson, for example, who runs a 10-person study group in Tucson that meets monthly, is a member of NAPFA and serves as the fee-only organization’s liaison to some 30 NAPFA-sanctioned study groups nationwide. Sanctioned, in this case, means completing a certification process and “signing on” to the mission of NAPFA. It also means adhering to operational guidelines necessary to uphold the group’s–and NAPFA’s–integrity. “As always,” he says, “the definition of what is a study group–open to others versus a private periodic gab fest among friends–caused NAPFA to establish some basic criteria for the group to be eligible for recognition and resources.” Taking this step, he adds, has caused some groups to question their raison d’?tre while helping them solidify their own image.

The NAPFA study groups range in size from three to four persons to over 50. It’s up to each local group to make decisions concerning matters such as dues, reimbursement of group-related expenses, and meeting schedules and logistics. Within NAPFA’s Web site (www.napfa.org) is a private section set up expressly for study group leaders. It helps them solve problems they may not want to share with the entire NAPFA membership. Presson cites the instance of a study group wrestling with a member who was wreaking havoc through his chronic negativity. The question on how best to handle the matter was posted on the Web site, where it generated answers from other study groups across the country. “That sort of advice is worth its weight in gold,” says Presson.

Unlike NAPFA, the Financial Planning Association–a much larger trade group, with 30,000-plus members compared to fewer than 800 for NAPFA–does not have affiliated study groups. “In a sense,” explains FPA Director of Community Sean Walters, “NAPFA encourages or helps organize study groups in the same way that FPA encourag

es or helps organize chapters. It’s just a matter of scale.” FPA has a nationwide network of 100 such local chapters, each promoting the “advancement of knowledge in financial planning, supporting programs and projects that enable members to better serve their clients.” Nearly all members are assigned a chapter. But Walters estimates that between six and 12 chapters have some type of study group or special interest group associated with them. Like NAPFA, participation is not required, but it is encouraged. “We can’t force community. We can only create environments for it to occur,” he says. As for benefits, study groups “connect participants around areas of knowledge, interest,” notes Walters, “and that tends to build relationships that help cement loyalty to the organization as a whole and to the profession as a whole.”

Despite the panoply of programs and special events FPA sponsors nationally, regionally, and at the chapter level, Walters maintains that there is “a certain value that you get out of that study group involvement that’s hard to get other ways.” Study groups, too, became a focus of recent FPA research to learn the secrets of these groups’ effectiveness, and as Walters says, “to apply that same sense of community to other endeavors we’re starting up.”

Same Head, Different Hats

Financial advisors come in many guises, and study groups affiliated with industry trade groups aren’t the only ones flourishing. Take Boston-based Commonwealth Financial Network. With more than 800 broker/dealer reps nationwide–each with a minimum of $50,000 in gross commissions–it’s a large firm with hefty resources that’s nonetheless big on small study groups. Why? Because most of its reps are proudly independent–and many came from wirehouses and don’t want to be told what to do. As Joni Youngwirth, Commonwealth’s vice president of practice management, says, “Individuals off on their own and by themselves out there need someone.” Part of her job is getting those individuals together.

Youngwirth says most Commonwealth reps are financial advisors and planners, with the majority holding RIA status. Although Commonwealth does not demand that its reps obtain planning-specific designations, such as the CFP, many do, in addition to normal NASD requirements. Thus far, about 75 Commonwealth reps have joined study groups, a number Youngwirth expects to grow as reps become more aware of their existence and benefits. A call to join can be found on the Commonwealth Web site (www.commonwealth.com), facilitated by Youngwirth’s expertise in helping fledgling groups get up and running.

In terms of practice management strategies, study groups are hardly new. Youngwirth cites one such group in Massachusetts composed of broker/dealers from several different companies that has been meeting regularly for the past 10 years. But there’s more and more talk about study groups, she says, “and when they work, they are exceedingly powerful.”

A case in point would be the group launched by Dick Sawyer, the Portland, Maine, planner and Commonwealth rep. Like a lot of advisors, Sawyer, a CFP, CLU, and ChFC, has an insurance background, entering the field 25 years back as a MassMutual career agent. While there, he earned membership in the industry’s prestigious Million Dollar Round Table and was invited to join an MDRT study group. That group became the genesis of his present study group, consisting now, as it did originally, of eight or nine members from New England. What’s unusual about Sawyer’s study group, apart from its longevity–12 years and running–is that the members rep for different broker/dealers. But they share in common a former life as insurance agents who have evolved into financial advisors “with some different orientations,” each following his entrepreneurial bent.

Sawyer’s group meets three times a year, for two days, at rotating locations. Two months ago the group was in Maine; in midwinter members will get together in Vermont. “So you know what that means–we’re skiing,” says Sawyer, adding that the group is “as much about male bonding as it is anything,” along with entrepreneurial and personal growth.

If there’s a problem with any study group, it often centers around issues of commitment. “I have to always stress that there is an obligation to participate,” explains Youngwirth. “You can’t make excuses to get out of a meeting. People have to be equally committed for it to work.” Sawyer’s group offers members a special incentive: The cost of each meeting is split evenly “whether you show up or not.” Expenses typically include lodging, meals, entertainment, and an occasional guest speaker. This might be an attorney, or an accountant or vendor. Joni Youngwirth, for example, presented a session on best practices. As a rule, each member is responsible for his own travel, which, since members live in neighboring states, needn’t require airfare. It’s another advantage that local study groups have over trade association conferences, which can require expensive airfare, lodging, and related expenses, and are usually longer in duration.

Meeting agendas are set by the member host, a rotating position that the host may opt to share. “We try to commit to bringing to the table one good solid sales idea,” notes Sawyer, “and so we’ll spend one session focused on that, on what we’re doing in our respective business, and another session, the next day, might be a presentation from an outside person.” As for that one good sales idea, at one of the meetings, Sawyer was able to convince a member to rep for Commonwealth. “I got one of the guys to sign up, and I felt like saying, ‘You get it?’”