Serve emerging clients with emerging planners

When it comes to the next generation, the financial planning profession has failed to solve two major issues: how to serve emerging clients effectively and profitably, and how to build career tracks that will set up emerging planners for success. These are issues that the pioneers of the profession didn't have to worry about until now because they were mostly career changers focusing on clients their own age and simply trying to survive in the industry. Now that the profession is more established, it is more critical than ever to figure this out. We've found at my financial planning firm that the solutions may be interrelated. Our pursuit of this business model — linking emerging clients with emerging planners — was primarily the vision of our founder, Marty Kurtz, who said that in 50 years, he hoped our company would have different planners talking to different clients about the same pool of money. As he hired younger planners, we discussed questions such as: How do we serve our peers? Can we work with young professionals before they meet minimums? How do we better price and serve children of clients? Serving young clients is difficult because our profession has built pricing models tailored toward households with high assets. Yet ironically, most major financial decisions happen before we turn 40. Since most young clients lack high assets or high income, we knew we would need to find a way not only to reduce fees and services but also best utilize our time and technology. Our brainstorming led us to research what young clients are willing to pay for other types of services — such as cable bills, gym memberships and cellphones — and then set a comparable price. With pricing in hand, we had to determine the most effective services we could provide this demographic. The fundamentals of cash-flow coaching, debt management and building emergency funds became the logical essentials to help clients build a good foundation. We also knew that for them to see the benefits of the financial planning process, we needed to help them establish and track both net worth and their goals. With the creation of this introductory service model, we were able to take on young clients and help them grow into our ideal client. Finally, as we set out to implement this strategy, we stumbled upon the final piece of the puzzle. Emerging planners come out of their certified financial planner programs full of technical knowledge, but still need about 10,000 hours to master their relational skills as a financial planner. While building our career tracks, we realized we could use our younger planners that were lower paid not only to reduce our expenses but also to give them valuable skills to be successful planners. We've found our young planners have increased fulfillment and loyalty to the firm in the process, which is a win-win for the profession in regard to serving the next generation of planners and clients. Andrew Sivertsen is a fee-only financial planner at The Planning Center and president-elect for FPA NexGen.