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Financial Planning > Behavioral Finance

FPA: The Next Generation

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In your article “A Full Plate for the FPA” (June 2005), you indicated that the establishment of NexGen is a major reason why the FPA decided to open its Retreat to planners “with less than eight years of experience.” To the FPA’s credit, the truth is actually the opposite.

Instead, the FPA’s excellent decision to open the doors of Retreat to planners with fewer years of experience actually gave a group of young planners who “only” averaged 4-5 years as financial planning professionals the opportunity to form a supporting sub-community of our own. Our group shares common experiences about growing up in the ’80s and ’90s in a time when our parents showed us that the markets only go up, and then entering the financial services industry in the era of 9/11, the do-not-call list, and a market that is still down 20%-40% from when many of us began our careers.

As Elizabeth Jetton said about the emerging generation of young planners, “We see them coming,” and the vision of FPA leadership to make the financial planning community more welcoming to its younger members was what actually allowed NexGen to come into being. As our group finds its own voice in the coming years, I look forward to a time when NexGen can share its own ideas about how to continue the development and integration of the next generation of financial planners to continue the growth of the Financial Planning Association. But opening the doors of Retreat was not our contribution–credit must go where it is due: to the current leadership of the FPA, with its eye toward the future.

Michael E. Kitces

Co-Founder, NexGen and Director of Financial Planning

Pinnacle Advisory Group, Inc.

Columbia, Maryland

Aaron S. Coates

Co-Founder, President NexGen andPartner

Compass Wealth Advisors, LLC

Elkhart, Indiana

Wanna Buy a Bridge in Brooklyn?

From “Your New Partners?” [story on limited partnerships; June 2005]:”These investments can be particularly attractive to the baby boomer generation, since their focus is more on income than total return.”

Another way to put it is: Income = Good, Total Return = Irrelevant

Horsepucky and balderdash! What kind of nonsense is this in a professional publication? I have an even better investment; it pays 10% per year. Unfortunately, the total return is zero and the investment runs out in 10 years. Next we’ll be reading about how attractive it is to “lose money but make it up in volume.”

Harold Evensky

Evensky & Katz

Coral Gables, Florida

Corrections from June

“Catching Up With Christopher Tsai” should have said that Tsai Capital’s large-cap equity growth account outperformed the S&P 500 by 1,300 basis points over the past five years. The firm manages 18 accounts with $15 million in assets and numbers non-income-producing real estate among the indicators it uses to determine equity valuations. The founder of Fidelity Investments should have been identified as Edward Johnson II.

“A Full Plate for the FPA” should have said that while the group plans to invite lawyers, accountants, and others to join FPA members in “communities of practice,” it won’t offer them planner memberships.

In “Coast to Coast,” we misidentified the publisher of Norm Boone’s and Linda Lubitz’s The Investment Policy Statement Guidebook. It was published by Ibbotson Associates.


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