The Financial Planning Career Path of the Future

Journal of Financial Planning: December 2020

 

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“Changing the world, one financial life at a time.” It’s what I say every morning when I wake up, and what every member of my team works for tirelessly. Humor me for a few minutes and I’ll share with you my vision for the future.

As co-founder and chief evangelist at Facet, I often am asked, “Brent, what is a chief evangelist?” I get it—it’s a new title in the profession. I break my role down into three parts: keeper of the cause, spreader of the word, and champion for financial empowerment. I don’t consider myself a visionary or a disruptor. I am simply a professional who has dedicated my career to a cause I believe in—making sure that, one day, every American household will have access to this life-changing thing we all call financial planning. (A quick thank you to all of you out there who do great work for your clients and communities).

We are living through a time of massive shift, on many levels. I believe it’s for the best and that it will position competent and ethical financial planners at the epicenter of our clients’ lives, if we are willing to evolve and adapt. I believe the next decade will usher in a new era of human-first advice in which technology plays a conflicting role—one in which it both destroys our existing beliefs of how value is defined and empowers planners to find entirely new avenues for value creation.

Welcome to the human revolution.

Full disclosure: I don’t know all the answers but I’ve devoted my life to the process of discovery, failure, learning, and moving our profession forward. Join me as I explore what’s possible if we ask better questions and challenge ourselves to reimagine what we do and how we will improve the financial health and wellness of a nation. Here are the questions that keep me up at night:

  • What do younger generations want in relationship with their finances?
  • How will the human element overcome the “tech”-tonic forces in motion?
  • What will the firm of the future look like and how should we define ‘best’ or ‘top’ firms?
  • What does the future of the workforce look like if we are going to serve all Americans?
  • What does quality financial advice really look like?

This article explores what the answers to these questions mean for the future of the profession.

What Do Younger Generations Want in Relationship with Their Finances?

Reimagining service models through a generational wealth transfer. Service models need to evolve to meet consumer demand. A more informed client will demand that adviser fee structures better align services and value.

The assets under management models will fade away as flat fee, subscription, and more on-demand pricing models emerge. Here is the bottom line: consumers want fair, transparent, and unconflicted pricing. Trends outside our profession show that younger consumers are living in a world where subscription fees are the norm. What would your business model look like if the focus was on helping people build wealth instead of just managing existing wealth?

From expertise to expression to experience. Millennials ushered in the age of the experience economy. Studies show that they would rather spend money on experiences than material goods. What does this mean for the future of advice? First, we need to redefine how we deliver it. Second, we need to redefine what our financial advice allows them to do. It’s no longer just about building wealth and retiring. Younger generations want to know how their finances will empower them to create experiences in their everyday lives, to invest in the causes they believe in, and to give back to their communities. How do you help your clients create impact with their plan and not just their investments?

On-demand and just-in-time advice. Amazon, Netflix, Venmo, Google, and the rest have changed the way we shop for products, pay for services, interact with content, and connect with the world around us. Financial planning hasn’t evolved to align with these trends. What would an Amazon Now or a Netflix on-demand financial planning solution look like? This is hyper-personalized planning with same-day service. Shifting consumer expectations will drive financial planners to be plugged into their clients’ needs and lives, at all times. “Hey Alexa” becomes “Hey [insert your name here].” Consumers will expect just-in-time advice for their everyday financial life decisions. How do you use data and technology to ease this burden while still providing an excellent customer experience (CX)?

How Will the Human Element Overcome the “Tech”-tonic Forces in Motion?

Technology as a tool for planner liberation. Humans and technology are on a collision course. Our role is to reimagine the human element of our business and let technology liberate us. Studies show planners spend less than 20 percent1 of their time where it matters most—with clients.

If I asked you what you love most about your day, my guess is that you would say something along the lines instead of “building relationships and using financial planning as a tool to create financial opportunities for clients.” Instead of technology platforms of tomorrow will play two roles: personal digital assistant and associate planner. What would you do if you got back 80 percent of your time?

Technology will shatter the price barrier to high-quality advice. The price barrier for financial planning will be shattered in the decade ahead, just like it was for investment management about a decade ago. The buzz words are efficiency and productivity. A friend of mine said recently that these words indicate that we are moving towards a commoditized planning experience. I disagree. The goal is not to be efficient with people; the goal is to eliminate the things that don’t add value but add cost. And with technology as the great equalizer of cost structures, planners will have to decide if they want to compete on cost or value. What is your value and how do you want to compete?

A digital financial planner brain passes the CFP exam. Within the next five years, someone will develop a financial planner brain powered through artificial intelligence that will pass the CFP exam. This isn’t a threat to our livelihoods. I see this as a positive event. Remember, exams are based on facts, data, and binary outcomes; the answer is either right or wrong. Real-life interactions have the added elements of emotion, psychology, and human behavior. Digital tools that can improve the quality of the advice that planners provide don’t replace us—they empower us if we evolve. How will you add value if your technical skills lose value?

What Will the Firm of the Future Look Like and How Should We Define ‘Best’ or ‘Top’ Firms?

Current measures of ‘top’ or ‘best’ are broken. We need to reimagine the health and sustainability of planning firms. Every year, I read the list of the ‘best’ or ‘top’ advisory firms that are measured by their assets under management (AUM) or revenue, and I ask myself why these are the metrics we use to define ‘good.’ Those metrics tell us nothing about the quality of advice or the impact they have on the lives of their clients. I know a lot of world-class  planners who charge a flat fee, don’t manage assets, or who work with populations that don’t have assets to manage yet. They will never show up on a list, and I am sure that is not their goal.

What if we were able to measure firms based on how many goals their clients achieved, or how much debt they helped their clients pay down? What if we could measure how firms tangibly change lives, incorporate diversity, operate sustainably, and invest in the next generation of planners?

A virtual reality. I promise, I had this idea before the pandemic. As proof, we started Facet Wealth in 2016 with a completely remote workforce and with all planning meetings held via video conference. No longer are geographical barriers an issue in financial planning as remote jobs become more widely accepted. There is a very positive second-order consequence from this as well. You get access to a deeper talent pool. Some firms will thrive by being hyper focused on their local markets and their face-to-face interactions, and this is a decision that firms will make, based upon their purpose as an organization.

Financial planners actually do financial planning. So you want to be a financial planner, build meaningful relationships with clients, deliver world-class advice, and change lives? Good, now go gather assets and sell some products. Sound familiar? I can’t tell you how many times I hear from planners that they joined a firm that told them they could do real planning only to find that their sales quota became the primary measuring stick for success.

The best firms of the future will value what we as planners value: quality advice and relationships with clients. And if referrals are the top driver of firm growth then why don’t we place more value on the frontline people who create raving fans of our clients? How would you build a business around this central point of value?

What Does the Future of the Workforce Look Like if We Are Going to Serve All Americans?

A diverse and inclusive work environment. We need to reimagine the workforce. Diversity isn’t about checking a box. Inclusivity isn’t an option. Inclusivity—when you’re striving to put a CFP® professional in every household in the country one day—is a necessity. Thinking about it in any other way is simply obsolete. Your clients need to see themselves reflected in you. Other than diversity and inclusion simply being the right thing, there are clear business benefits. Want to outperform your competitors, accelerate your ability to innovate, provide a better overall client experience, and improve your firm’s profitability? Invest in and develop a more diverse and inclusive workforce. Full stop.

New languages and the half-life of value. This goes beyond how we think of language in the traditional sense. The workforce of tomorrow must be fluent in the languages of financial life planning, emotional intelligence, and technology. As technology accelerates the rate of change, we need to learn new skills that focus on the human element and the rapid change in our operating environment. Think of it as the acceleration of the destruction of value. An evolving intelligence will be required that can adapt to changes in consumer preferences, business models, and the unique services that we deliver. The key language will be the ability to communicate to the human side of the relationship in areas such as life planning, behavior change, self-efficacy, and overall well-being. What language do you need to learn to remain competitive?

What Does Quality Financial Advice Really Look Like?

If we want to become a true profession, we need to define the standard of care that we expect from financial planners and that consumers deserve. Today, there isn’t one. What is the Hippocratic oath for financial planners? At the very least, it should start with a clear fiduciary standard. The regulations as of late are a joke (it’s taking a lot of effort to keep this part PG-13). Our profession and everyday Americans deserve better. Real financial planning is built on a fiduciary foundation, is personalized to the client, and looks at all facets of one’s financial life. What is keeping us from getting here as an profession?

Redefining ‘wealth.’ The term ‘wealth management’ elicits feelings of exclusivity or that someone has achieved some level of accomplishment or ‘made it.’ Monetary wealth is something that our profession has worked to help people create, and our business models reflect this. But times are changing. Our job is to help our clients redefine success and what wealth means to them. Most Americans don’t define their financial success by the amount of money they have. Wealth is an abundance of opportunity, experiences, and sharing life with those we care about most. It’s our job to stand for that and do better for our clients. How do you help your clients define wealth and what it means to them?

In Closing...

Before I leave you with one final question, let me share a story. A few years back, the Financial Planning Association held a mini-TED Talk session at their annual conference. I had the honor of being selected to give a talk on the one thing I cared most about: my mission of putting a CFP® professional in every household in America.

I believe we are standing at the precipice of change. I believe we have an opportunity and a responsibility to work together to find a way to make sure every American household has access to personalized and high-quality financial advice, at an affordable price. If you believe what I believe, join me. I can’t do this alone.

Now, I’ll leave you with that one final question: how do we change the world, one financial life at a time? 

Brent Weiss, CFP®, ChFC®, is the co-founder and chief evangelist for Facet Wealth. He has dedicated his career to the mission of democratizing financial planning. His passion for financial health and wellness guides the mission and vision of Facet, while his insight informs the innovative, next-generation planning solutions, and technology that will enable greater access.

Endnote

  1. 1. See “How Do Financial Advisors Actually Spend Their Time and the Limitations of Productivity,” at www.kitces.com/blog/how-do-financial-advisors-spend-time-research-study-productivity-capacity-efficiency/#:~:text=Notably%2C%20this%20detailed%20breakdown%20of,tasks%20%E2%80%93%20and%20less%20than%2020%25.