Planners Blast Industry Leadership

MIAMI — The financial planning industry faces a number of major challenges — and advisors are unhappy with the way industry groups are responding.

In a frank discussion at a town hall meeting, and in other sessions at the FPA Retreat here this weekend, planners voiced a number of complaints. Planners are fed up with confusion surrounding labels used to describe what they do, they said; they also faulted the FPA's inability to "draw a line" between planners and salespeople and the lack of support in hiring and integrating the next generation of planners.

At the town hall meeting, one statistic intended as a rallying cry — the oft-cited need for 160,000 new advisors in the next decade — became instead a focal point of advisors' frustration. 

Veteran planner Dick Wagner of WorthLiving in Denver, Colo., told FPA board members on stage that the organization needed to stop "muddying the lines" between financial planners and other wealth managers. The number of "advisors" has no bearing on the number of "planners" in the industry, he argued.

WHO ARE WE?

Another well-known industry player chimed in. "Why do we not know our own numbers?" Michael Kitces, director of research for Pinnacle Advisory Group (and Financial Planning contributor), asked the board. "How many people actually practice financial planning?"

Kitces also pointed to the FPA's lack of enforcement regarding the standard of care planning members are supposed to adhere to. 

Current FPA president Janet Stanzak told planners, "we are focused on being the home for the CFP professional, let me leave no doubt about that." Yet she acknowledged that the association has never enforced the fiduciary standard of care and that it has always been done in good faith.  

That may not work so well in the future, Kitces warned: "If we don't enforce the standard of care we abide by, we're setting ourselves up for a big PR disaster down the road." 

In a separate session at the conference, Wagner voiced even more frustration. "We don't know what we're doing," he told a room full of other longtime planners. "What is our mission and purpose? I don't think that's been answered."

Not only did he criticize the "planner" label itself, saying it is insufficient to describe planners' role; he also faulted the industry from a practice standpoint as well. The current practice model is "expensive" and "inefficient," he said, and he called on advisors to figure out recruitment issues, make planning services available for the middle class and, at the same time, continue to be profitable.

Wagner did praise the positive impact that the CFP Board's code of ethics has had on the industry — although, he said, "I have a couple of issues with what's going on right now. Surprise, right, Kevin?" he cracked, drawing a nod from CFP Board CEO Kevin Keller, seated in the audience, and a few chuckles from the rest of the crowd. 

OPPORTUNITY SHORTAGE?

Back at the town hall, Kitces also took on the notion that the planning industry is facing a talent shortage. The real problem, he said, is that new planners face a dearth of jobs and internships available for them.

"The problem is not finding financial planners," Kitces said. "It's that they can't find a place to get the job experience. We should know our numbers and do our research — that's necessary."

Several planners stood up to offer their firms' help in developing an FPA-wide recruiting strategy. Elissa Buie, CFP and CEO of Yeske Buie, called for the creation of "internship-in-a-box, new-hire-in-a-box and succession-plan-in-a-box" programs to help grow and transition planners' firms.

"We would work with the FPA to do this, to make it a turnkey program," Buie said, speaking directly to FPA board members. As an advisor looking for new talent, she said, "I'm going to be so much more comfortable when you've told me, 'Here's what [the interns or new planners] have done, and here's what you offer them.'"

Despite the freewheeling and sometimes heated discussion, FPA executives said they were pleased with what they heard and appreciated the open dialogue. “We have never been more laser focused on the work that we do today,” Stanzak said.