“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.”