Close Close

Financial Planning > College Planning

Tackling the Challenges

Your article was successfully shared with the contacts you provided.

What are the biggest challenges facing the profession in the years ahead? According to the 12 members of the IA Leaders’ Council, they are finding reliable income streams for clients in retirement, and nurturing the next generation of advisors. Those findings arose from a poll of the Leaders and an extensive conference call with the IA editorial staff on May 9.

Scott Hanson of Hanson McClain in Sacramento noted that when it comes to retirement income, “the insurance industry has made some strides, but there’s still work to be done,” particularly because many annuities still are “heavy commission products, with a lot of fees and too much fat,” so the “returns get stripped down too low.” Don Schreiber of Wealth Builders Inc. in Little Silver, New Jersey, worried that annuities can be really expensive despite guaranteeing income for life. Schreiber is a strong believer that “the markets–bond and equity–invested appropriately will help baby boomers invest as successfully as in the past.”

Lou Stanasolovich of Legend Financial in Pittsburgh said his firm is “completely on the other end of the spectrum.” He argued that there are lessons to be learned from the investing strategies of big college endowments and major institutions like Calpers. Those institutions “are continuing to move to investments other than U.S. stocks, bonds, and cash. In fact, some of them are in the 70% range in those nontraditional products,” such as commodities, managed futures, timberland, hedge funds, or emerging-market equities. But Deena Katz of Evensky & Katz in Coral Gables, Florida, brought the discussion back to earth by pointing out that unlike institutions such as endowment funds, “our clients have a specific period of time” in which they’ll need their money.

As for the next generation of advisors, Peggy Cabaniss of HC Financial Advisors in Lafayette, California, pointed out that many advisors entered planning later in life, but that they’re now “getting older, and we have to constantly nurture the new people coming in.” Mitch Kramer of Fluent Financial in Dallas pointed out that he had hired a recent graduate of Texas Tech University’s financial planning program as a paraplanner. He has clients who have asked that the paraplanner speak to their teenaged children about college. “There’s a lot of value there,” he points out, “and it’s going to help keep the assets in the practice when the clients pass.” That struck a chord with Katz, who teaches at Texas Tech, where there are 350 graduate and undergraduate students in the program. “It’s incumbent upon our generation to mentor these people,” she argued. “They’re our future.”

There’s another issue about the profession that troubles Percy Bolton of Percy E. Bolton Associates in Pasadena: “In California the population is 50% minority, but the diversity in the industry doesn’t reflect the diversity in the communities where we work.”–James J. Green

For a podcast of the Leaders discussing the younger generation and the competition for top staff, go to “Web Extras” at