PANC 2013: Team/Practice Building

Having a support group is key to building an adviser’s practice.

John Upham, president at SageView Advisory Group, told attendees of the 2013 PLANADVISER Conference in Orlando, Florida, that most advisers got into the business because they love being with clients. So, a firm must have support in-house such as billing, administration to put reports together and maybe even staff that just handles requests for proposals (RFPs). As the business grows, it will need human resources (HR), research, sales and relationship management staff. His firm believes in feet-on-the-ground, local advisers.

Michael Goss, executive vice president at Fiduciary Investment Advisors, said his firm has a dedicated sales team to bring in business, and then advisers serve clients. They do not want advisers to spend time pulling and binding reports, so the firm employs adviser analysts who specialize in the same market as the advisers—defined benefit (DB), defined contribution (DC), nonprofit, etc.—for support services.

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According to J. Fielding Miller, co-founder and CEO at CAPTRUST Financial Advisors, while his firm’s advisers also source relationships, it has support and research groups so advisers can be out in the market pursuing opportunities and serving clients.

Miller said the bedrock values of an adviser’s business should be complete objectivity and shared ownership, which is key for workplace culture.

According to Goss, growth of the business occurs through a combination of a tactical response to market changes and strategic decisions about where advisers want to go in the market. Upham added that as the business evolves through tactical approaches, advisers must make strategic decisions, such as whether to hire an actuary or expand to a new market.

Miller explained that the retirement advisory business is smaller than people think, so there’s not a lot of acquisition potential. Businesses grow more by hiring and training advisers. However, he does see acquisition potential in the wealth management space.

According to Upham, there is a dilemma for entrepreneurs who move to working for larger firms, and to survive the change, they must keep their entrepreneurial spirit while seeing the advantages of association with an established firm.

Chepeni(k)’s Thoughts: A Call to Action

Our industry has a golden opportunity to do something incredibly important for our country.

We have missed the boat for far too many years. It is so obvious and yet…we aren’t doing it. We can teach our children about money and change the fate of our “mostly” financially illiterate country.

The United Kingdom, this past February, announced that personal finance instruction will be mandatory throughout their school system beginning in 2014. This is an important development that largely fell on deaf ears in the U.S., where we cannot seem to get our act together.   According to the Jump$tart Coalition, only 24 states actually require some sort of financial literacy course as part of their curriculum. It is a sad state of affairs.

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It is my proposal  that every licensed financial adviser, securities broker, and insurance agent be required to provide at least 10 community service hours each year to teaching others about money.  It is so simple and extremely impactful.

According the U.S. Bureau of Labor Statistics, the United States has approximately 175,000 licensed investment professionals and more than 325,000 insurance focused professionals. That’s 500,000 people…real intellectual capital…that can and should be required to provide such community service as part of their regular CPE credits.

Even our attorney friends recognize the importance of community service work. A majority of the state bar associations across the country require some sort of annual pro bono work to remain in good standing. Additionally, members of the American Bar Association are called to a higher standard as a public citizen and, as such, should participate in activities for improving the law, the legal system or the legal profession!

If they can do it…so can we!!   We can improve our profession, the education system, and our children’s understanding of basic financial decisions. Almost every child will be forced to make financial decisions in the future. Why not help them understand those decisions today? 

According to The National Center for Education Statistics, there are more than 50 million children enrolled in U.S. public schools and another five million in private schools, but there are only 3.3 million elementary and secondary public teachers. That’s a ratio of 15 to 1, students over teachers. These students are spread across approximately 100,000 schools around our country. We have 500,000 licensed professionals that can help make a meaningful difference.

I am well aware that many of you, like me, have supported, with your money or your time, various community programs, projects or organizations. I continue to do so, but firmly believe that we must do more.  We can be a collective and organized voice. Our industry, unfortunately, has and continues to receive too much negative press.  Whether it was the 1990’s Enron or Worldcom scandals, Bernie Madoff’s Ponzi scheme, or even the recent focus on our retirement-centric practices regarding fee disclosure!  This will not only help change the course of our country, it will give us bragging rights about how our industry collectively spends millions of hours in our school systems.  Good press for all of us!

April is National Financial Literacy month…but how many of you actually devote resources to help promote these efforts? There are many organizations that have developed successful programs to advance this cause…Jump$tart Coalition, Junior Achievement and The Boys and Girls Clubs of America.   Imagine if they had 500,000 volunteers to help deploy these wonderful programs…

Thank you.

Jason K. Chepenik, CFP®, AIF®, CkP

 

Securities are offered through LPL Financial, Inc. an independent, registered broker/dealer. Member FINRA/SIPC. Advisory services provided by Independent Financial Partners

 

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