This week, we sat down with Luke Dean, CFP®, Program Director at Utah Valley University; Nathan Harness, Ph.D., CFP®, Program Director at Texas A&M; and Craig Lemoine, Ph.D., CFP®, Program Director at the University of Illinois. Phew!
As you can see from their credentials, Craig, Nathan, and Luke had a lot of experience and wisdom to share about the financial planning profession, including their creation of the 12 Tribes of Financial Planning. We spoke about what financial planning might look like in each tribe, how their tribe model helps students, and how companies responded to their analysis of the profession.
Big brand names are high risk, high reward
It’s important to remember that the 12 Tribes are not cut-and-dry. The diagram our guest hosts created is a circle divided into three sections of four tribes. (You can see it here.) As Luke mentioned, there are many nuanced differences between each tribe. They also share similarities, too, which can make it difficult to generalize and characterize.
In the first grouping of four tribes, you have wirehouse brokerage, property & casualty (P&C) multi-line agency, life & disability (L&D) insurance, and franchise or independent broker-dealer. Nathan explained that in this group, you’ll find big, nationally recognized brand names. Ask a student in the financial planning program the question “What is financial planning?” and they’d throw out names that are grouped in this quartet.
They have big budgets, high sales, formalized training, and national advertising. Think Merrill Lynch (wirehouse brokerage), Allstate (P&C), and Northwestern Mutual (L&D). You may have little to no salary incoming, and you’ll have to work hard to generate your income in this grouping. High risk, but high reward.
Look to RIA, counseling, or GAR if you’re a people person
Luke explained the next quartet of tribes that include registered investment advisors (RIA); accounting and tax RIA; counseling; and government, academia, and research (GAR). These tribes are well suited for “minders” rather than “finders,” as Luke put it.
Finders are hunters; they’re motivated by seeking opportunities and sales. In comparison, minders are operators, people-persons, and project managers. Because these tribes are often client-focused or student-focused, minders can find jobs that suit their people skills in this grouping.
The future is in robo and fintech firms
We handed it over to Craig to talk about the final quartet of tribes: robo advisors and fintech (financial technology); banking, credit union, trust company; discount brokerage; and product distribution. He had a great visualization to sum up the third group, as well as the 12 Tribes overall.
The first grouping of tribes can be looked at as the past, where the financial planning profession found its roots. The second grouping can be looked at as the present, where students today find plenty of job opportunities and can get their foot in the door. Where do we go from here? The third grouping. Craig predicted that students will start gravitating towards fintech firms and careers as robo advisors. Plus, many companies have gotten more aggressive and competitive in recruiting; big RIA custodian firms like Schwab, TD, Vanguard, and Fidelity tend to lure and hire young CFP professionals with attractive benefits packages and salaries.
Let’s find unity across the profession
The 12 Tribes is clearly an excellent resource for young professionals or students looking for direction. But what do companies in our profession think of Luke, Nathan, and Craig’s work? Their response was...interesting. Craig explained that many people in the profession get into this mindset of “what is planning and what isn’t.” People can have very passionate opinions about what constitutes financial planning and what doesn’t. And they’re not afraid to voice those opinions.
While the 12 Tribes model does label and group career paths, it’s not meant to segregate the professions and spark more competition between tribes. In fact, Luke pointed out that financial planners are already on the “lower end of trust” in financial services. What good does attacking your competitors do in advertising? Ultimately, it just inspires less trust in financial advisors in general.
There’s a tribe for everyone
Craig and Luke talked about how financial planning can vary wildly from tribe to tribe. In P&C, you may be selling products. At trust companies, your main focus might be estate planning. As a robo advisor, you may focus on mass market. And each company within each tribe may focus on different areas of financial planning itself. Nathan likened it to asking what the difference was between two pro baseball teams. There clearly are differences, but they’re both playing baseball.
You might feel overwhelmed by all the choices of profession out there. Ultimately, the key to finding the right tribe or profession for you is to ask the right questions. Where can I be mentored so I can grow into the best version of myself? What opportunities exist in this profession if I work there? What will my role be, and will it fit with my long-term career plan?
We learned quite a bit from Luke, Nathan, and Craig in this episode. If you’re curious about the nuances and different cultures of the profession, don’t miss out and tune in.
What You’ll Learn:
- How the 12 Tribes of Financial Planning was created
- What the 12 Tribes mean for students
- How many tribes have you been in for your career?
- What each section of the 12 Tribes diagram means
- The past, present, and future of the profession
- How to find your tribe
- How companies have responded to the 12 Tribes
- What financial planning looks like in each tribe
- The importance of having a mentor
In this episode of YAFPNW, we spoke to Luke Dean, CFP®, Program Director at Utah Valley University; Nathan Harness, Ph.D., CFP®, Program Director at Texas A&M; and Craig Lemoine, Ph.D., CFP®, Program Director at the University of Illinois.
Here’s what we chatted about:
- Twelve Tribes of Israel
- The 12 Tribes of Financial Planning diagram
- The Securities Exchange Act of 1934
- Fran Lawrence, Professor and Department Chair at University of Missouri
- Setu Mazumdar, student mentor and president of Physician Wealth Solutions