XYPN Live celebrates growth of fee-for-service financial planning

The XY Planning Network celebrated the ongoing growth of independent fee-for-service financial planning at its 8^th annual conference, which took place this week in Denver.

The network added 186 new registered investment advisers to its ranks in 2021, bringing its total membership for more than 1,200 firms. The XYPN now represents nearly 11% of all state-registered RIAs offering financial planning services, the group said.

Not only is the network growing its ranks, but also the number of clients those RIAs serve. XYPN member firms collective brought on more than 20,000 new clients in 2021, with the average firm growing client head count by 36%, according to XYPN’s benchmarking study.

This is faster client growth than the average Charles Schwab advisers, said XYPN CEO and co-founder Alan Moore, citing data from Schwab’s latest RIA Benchmarking Study.

“The fastest growing advisers in the industry are doing fee-for-service planning,” Moore told InvestmentNews. “It’s a testament to consumers looking for financial planners, as well as our advisers having a service model that meets the needs of these clients.”

While many of XYPN’s member firms are just launching or still small, which may make it easier to achieve large growth figures, the media member already has several dozen clients, said XYPN co-founder Michael Kitces. Even scaling firms -- XYPN members with 75 client households or more -- grew their client books by an average of 28%.

“This speaks to the sheer level of consumer demand for people who don’t want to buy a product or don’t have assets to invest, they just want to pay for advice,” Kitces said. “I don’t think it’s a new demand for advice, it’s that people seeking it weren’t getting it before.

Moore said that the 2022 edition of XYPN Live was the conference's largest yet, with 20% more attendees than last year. It attracted about 950 total attendees, with about 650 of them being financial advisers.

Just under 100 of those attendees dialed in virtually, compared to the 2021 event that was more of a 50-50 split with live attendance.

A key theme of the conference was the emergence of micro-communities among XYPN members, Moore said. While the network has always stressed the importance of finding a business niche, there used to be just a single adviser or two focused on a certain area. Now dozens are starting to group together and share business practices.

The co-founders also outlined some of their technology goals for the future, such as building a more integrated tech stack for advisers and expanding the virtual assistant that is currently in pilot to help advisers with meeting preparation, client follow-ups and compliance.

“Our XYPN benchmarking study shows a clear trend that members are scaling themselves up through outsourcing, with 63% of scaling members using external provides to support their bookkeeping and administrative tasks,” Moore said in a statement.

A big focus for XYPN will be on benchmarking data, which will be brought into the XYPN adviser portal next year, Moore told InvestmentNews. The goal is to give advisers real-time data on their own firm as well on other firms like their own because even advisers going independent still want to create connections within the network.

“We want them to be a part of a group,” Moore said.

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