Words of Wisdom

Like many baby boomer financial advisors today, a number of my clients are approaching what you might call retirement age. Of course, these days, that doesn’t mean they want to quit working; just that they no longer need to work from a financial perspective, and they’re starting to think about devoting their time and still-abundant energies to other things they really want to do. They’re just not quite sure yet what those things are.

But again, like many advisors, they are sure that they want to spend a portion of their time and energy on some kind of a continuing relationship with their practices and/or the independent advisory community–to “give back” if you will, or at least use the knowledge, and experience, and possible wisdom that they’ve gained over years as advisors to help the firms they founded and the profession they helped create. Problem is, the existing opportunities to utilize their collective wisdom are rather meager. And if we don’t do something to rectify this situation sooner rather than later, we face the prospect of watching the experience of a whole generation literally walk out the door.

On an industry-wide front, there are many more ways to involve older advisors that so far have been unexplored. Currently, we have the well-publicized programs: mentoring through the FPA, boards of organizations, writing books, teaching local CFP programs, speaking at conferences, and management or marketing consulting. And these are all fine, as far as they go. But there are only so many seats on a national board, the mentoring program has limited capacity, ditto for CFP programs, being a consultant requires starting up another business (no party, let me tell you), and damn, do we really need another book on financial planning? Here’s a tip to would-be authors: Please be sure to have a truly unique message that other advisors both need–and want–to hear.

I’d like to suggest that the independent advisory community greatly expand its efforts to keep older advisors involved. On a small scale, “best practices” panels are always among the best attended sessions at industry conferences. I’d like to see the concept greatly expanded to more panels, forums, webcasts, etc. on specific topics such as ways to (and not to) grow a practice, buy a practice, manage employees, pick a partner, leave a partner–the list could go on and on. The tighter the focus, the more valuable, and useful the panels will be.

I’d also like to see our national organizations make a concerted effort to retain retired and older members. Perhaps discounted or even free memberships, and waived fees for attending industry conferences would reflect a small part of the value we put on their wisdom and experience. In fact, sessions at national conferences tailored to the needs and interests of older advisors would help to keep them coming. And then their attendance could be leveraged with programs where younger advisors could tap into their expertise. I’m sure there are a lot better ideas out there if we just put our minds to it. And I believe we really should.

One thing that’s always baffled me is why more industry organizations, broker/dealers, custodians, and product and service providers don’t make more of an effort to solicit the wants and needs of practicing advisors. Tapping into the retired, or nearly retired, advisor market with focus groups and advisory counsels, would be an excellent way to do this. For one thing, they have the time and the energy to be thoughtful in their responses. And for another, older folks tend to have far less inclination to pull their punches, or water down their responses, than do advisors who feel they have a relationship to protect. For organizations and companies who could benefit from honest feedback (and whether you know it or not, you could), older advisors could be a font of useful information.

At the advisory firm level, I realize that there are plenty of “good reasons” for why things are the way they are. We have a whole generation of mid-level financial advisors (folks with the experience and skills to work with their own clients) who have spent years watching their firm owners take the proverbial two-steps-forward-and one-step-back as they guided their practices to their current level of success. I know for a fact that for the most part, they are very grateful for the opportunity they’ve been given and for the success of their firms. But the world is changing, and strategies that have worked in the past will not necessarily be so effective in the high-tech, low-cost, ultra-competitive financial services industry of the future. Still, like every generation does, today’s junior partners and lead advisors are eager to take their turn at the helm, and make mistakes and successes of their own. So, in many cases, they’re not heartbroken to see the “old man” or “old lady” heading for greener pastures, as in out to pasture.

For their part, today’s owner/advisors contribute to being politely, but firmly, shown the door by their almost compulsive clinging to the lion’s share of firm equity and profits, while at the same time, doing less and less to generate firm revenues. This, of course, leads to the economic imbalance that causes junior advisors to leave and start their own firms, ill-will and distrust between generations of advisors, and the hastening of owner/advisors out the door. Call me crazy, but it seems to me that there has to be a better way to do business than this current dysfunctional situation, before the profession loses this current generation of venerable advisors forever.