At the TD Ameritrade National LINC conference in Orlando, a panel of financial planning students, veteran advisors and career changers convened on Thursday to discuss ways the industry can attract younger advisors to the business.
Liz Butler, director of TD Ameritrade, moderated the discussion.
What drew you to the financial planning profession?
Daniel Wendt, executive student assistant of the CFP Board-registered program at Louisiana State University, was drawn to the relationship side of the profession after a certified financial planner spoke to the Student Financial Association where he was a member.
“When he spoke about it, it really resonated with me,” he said. “Helping people throughout their lives achieve their goals is something I’m very interested in.”
Satish Dharwadkar, who started his career in education and engineering before founding MangoTree Capital, an RIA firm based in Sterling Heights, Michigan, said that after ending up in corporate finance, he decided to move to “where the real money management is.” He joined a wirehouse for about eight years, then launched his firm in 2012.
Martie Tullis, student leader, had a passion for education and wanted to be a high school math teacher, but decided to go into financial planning to be better able to support a family someday.
Dennis Markway, president of Iron Horse Wealth Management, said he “entered the profession out of spite” after spending the “first decade or so” of his financial services career doing ethics training and “getting sick of what I saw in terms of a lot of self-dealing, not really a planning focus.”
He launched Iron Horse, an RIA, three and a half years ago.
After making the decision, what were the first steps to joining the industry?
Dharwadkar was familiar with the business side of the financial industry from his time at Merrill Lynch, but he said educating himself about the planning side was more difficult because he wasn’t familiar with agencies like the Financial Industry Regulatory Authority or the Securities and Exchange Commission, or the difference between a fiduciary and a broker.
He said the broker-dealer industry “does a disservice” to itself in recruiting because it relies on “fearmongering” to sway advisors away from independence.
Tullis noted other students’ willingness to encourage her to join the financial planning program. After a couple of weeks in an introductory course, she switched her major from accounting and started attending conferences where she could interact with professional advisors.
“What got me here was the fact that I was so well received and I was able to get involved,” she said. “Now, a year later, I’ve been in an internship for about 10 months.”
Markway said he sought out more experienced advisors, “people who were smarter than me,” when he started as an advisor at an independent broker-dealer. “Find someone you can trust who will bring you along, who won’t abuse your trust and I would work at getting to scale in an independent business,” he said.
He said that deciding to be a fee-only advisor is often seen as a compensation decision, which is “absolutely incorrect.” He said that for him, “it’s an absolute lifestyle and ethical and moral choice” to be a fiduciary.
What do you wish you’d known before you became an advisor?
Tullis said she wished there had been more financial literacy education in high school to start a passion and an awareness of the industry, and that it was a way to “help people with something they’re going to use their entire lives.”
Butler asked if the tendency for women to be afraid of math contributed to the lack of women in the industry. Tullis agreed, saying, “It can be a little daunting, coming into the more analytical side rather than the emotional compassionate side.”
She said, yes, the analytical side is important, but it’s the connection with clients where advisors show their value.
Wendt said the compliance factor needs more emphasis in the classroom. “Compliance is a huge deal with the industry, and it’s hard to teach that.”
Do high school students know that financial planning is an option?
Wendt said that in Louisiana at least, financial literacy at the high school level is not standardized, and at most school those classes don’t exist. LSU’s financial planning program, which was launched in 2011, has more than 70 students. Part of Wendt’s job is to go to local schools to talk about financial planning and the CFP program.
What lessons have you learned since becoming an advisor?
“You can find your niche in this industry,” Tullis noted. “Whatever your passion is, you can do that.” She added that young advisors shouldn’t be afraid to try something and change it if they don’t like it.
Wendt said he heard a guest speaker describe the client relationship as “a soul, not a sale.’” He said he’s not going to do anything his grandmother wouldn’t approve of.
Markway said it’s easy to get caught up chasing what looks like opportunities, but it’s better to focus on what you know you do best and what you can do for your clients.
He added that it’s important to change the “color, complexion and gender” of the industry to align with that of the client population.
— Read Cybersecurity ‘Not Designed for the Human Psyche’ on ThinkAdvisor.