Young Planners and Old Clients

Welcome to my first LinkedIn newsletter! Although I’m a longtime journalist and now publisher of Rethinking65, a website for advisors who help clients 50-plus plan for a great second half of life, I won’t be “reporting” in my newsletter. I’ll be sharing my ideas as well as those of influential people who are involved with and care about personal financial planning.

?Today I had a chat with Dr. Preston D. Cherry, who has a doctorate in personal financial planning and heads up the PFP program at the University of Wisconsin in Green Bay. He also has his own firm, Concurrent Financial Planning.

?It was a wide-ranging conversation. But the two questions I kept coming back to were: How do his students view the personal financial planning profession??Why don’t more affluent baby boomers and older Gen Xers, many of whom could benefit greatly from financial advice, work with planners?

?Our exchange about his students left me feeling hopeful and inspired. Our talk about affluent older people, not so much.

?His students see so many more options in personal financial planning. They might be a financial planner, a financial coach, a financial therapist, a financial counselor, a behavioral finance expert, a compliance specialist, a life coach — the list goes on. There’s no question that personal financial planning involves money psychology, financial wellness and aligning life with money.

?So many opportunities, so many choices! These students don’t want to be boxed in. They are taking more control over their professional journey and a lot are envisioning how they want to build their own businesses. If they are leaning toward being an employee, they want to work for firms that offer comprehensive planning to clients. And they want a firm that will offer them work-life balance.

?Basically, what it means to be a personal financial advisor is being disrupted. But as Dr. Cherry pointed out, what’s happening is not an “invention,” but an “extension.” Decades ago there were individuals that began the vision, people like Harold Evensky, Deena Katz, Mitch Anthony, George Kinder, the late Dick Wagner and many others. They were a minority of personal financial advisors back then. Today, many established advisory firms have added comprehensive financial planning.

?Many younger planners have taken to social media to spread the message. They are offering subscriptions, flat fees, advice only — they are coming up with lots of ways to connect with potential clients. They are building their firms in much more varied ways than their predecessors.

?A lot of these newer planners, however, aren’t targeting affluent boomers and Gen Xers.

Although a LOT of advisory clients are 50 plus, a LOT of affluent people 50 plus don’t use financial advisors. A lot of them who know something about investing wonder why they need to go to a financial advisor to pick index funds? They think advisors cost too much.

?Yet these people need help with complicated Social Security and Medicare decisions. They need advice on how to get caregiving for their 90-year-old mother. They need advice on how to sell their business. On how to start a new business. On how much money they need so they don’t run out. On how much income they can expect. On how to help an adult child with special needs. On how to finance a grandchild’s education. On how to help a 30-year-old child become more financially stable. On setting up a trust. On making sense of a trust. On what they want to leave to their kids or charity.

?Dr. Cherry thinks the children of boomers in general have a better understanding of the value of financial planning than their parents. Those young Gen Xers and millennial children could be the ones who get the message through.

?He and I also agree that financial advisors themselves need to do a much better job of conveying the value of financial planning, especially to older people who can afford and need their services.?

?For many older people, financial advisor = broker or insurance agent. And you can’t blame them. That’s pretty much what most “advisors” did 20 years ago. Today, you can find advisors at RIAs, broker-dealers and wirehouses who do financial planning.

?The financial advisory industry needs to be more committed to and louder about showing older people that it has “come a long way, baby.” That means not always tying financial planning to investment management. It also means clearly explaining the price and value of financial planning and the myriad ways it can help with major life decisions.

?What are your opinions and ideas? Keep up with Rethinking65 through our newsletter!