Leave a comment

A Concise History of Diversity Programs at FPA and Looking to the Future

It was the FPA annual conference in Nashville in 2006. Lee Baker, CFP®, counted maybe 30 other African American attendees out of around 3,000.

In one intimate conference session, Baker, who said he was in a good—but flippant mood—said to the group: “My name is Lee. I’m from Georgia and from the looks of things I’m here to add a little color to the conversation.”

This sparked a few nervous chuckles. After the session, Ed Gjertsen, CFP®, walked over to him and the pair struck up a conversation about the lack of diversity at that conference and in the profession.

Signs depicting diverse people—Black, Asian, Latino—were posted up around the meeting space with the message, “We are FPA.”

The pair approached a then-staff member and told her that the signs represented where FPA aspires to be, but not where we are.

Gjertsen and Baker connected with Trudy Turner and formed what would in 2007 become the FPA Diversity Task Force in the hopes that one day it would become a permanent committee.

“Part of our thought process was, let’s make this part of our DNA and part of our infrastructure,” Baker said.

Later in 2007, the task force organized the inaugural invitation-only Diversity Summit pre-conference to the FPA Annual Conference.

In 2008, the task force established the Diversity Scholarship. The next year, it officially became the FPA Diversity Committee, chaired today by Charles Adi, CFP®, and later in 2009 created and adopted the FPA Diversity Statement.

Turner grew up in the FPA, she said, being a member before FPA was FPA (back before the merger). Turner recalled during her time at FPA Residency in Denver, the late Dick Wagner came up to her and asked, “Where are the rest of the people who look like you?”

“I so appreciated and have always appreciated that,” Turner said. “Dick was always so good at encouraging, supporting and challenging people to make this a better profession.”

It is people like Wagner and like Louis Barajas, EA, CFP®, who paved the way, Turner said.

Barajas said that he’d been talking about diversity since before his time on the FPA Board, which started in 2004.

“I started paying attention to the demographics and realized how fast we were growing and saw what the needs were,” Barajas said. “I felt like I was just talking and what I was saying was going in one ear and out the other.”

Turner heard him.

“I credit and stand on the shoulders of people in FPA who were beating the drum but weren’t getting anywhere,” Turner said. “I stand on the shoulders of Dick Wagner, I stand on the shoulders of Louis Barajas, who were talking about diversity, but it wasn’t going anywhere.”

Renewed Commitment to Diversity

In the past few years, the profession has seen a renewed interest in increasing diversity in the profession, an interest Turner said FPA has always had.

“FPA has very much been at the forefront,” when it comes to diversity and inclusion work, she said. This interest manifested in strategic partnerships with Quad-A and PridePlanners, which have both had pre-conference events to FPA’s Annual Conference.

So far in 2019, FPA launched the FPA Latino Knowledge Circle, a community for Latino financial planners to engage in professional development and networking, thanks to the help of Barajas. Along with partner CFP Board, FPA launched the Dick Wagner Scholarship. Lastly, FPA’s membership publication, the Journal of Financial Planning, had its first-ever diversity issue this month.

The early contributors to the Diversity Task Force and later Diversity Committee have said they are proud of the work FPA has done in this realm.

When Turner looks at what has come out of the diversity task force, it’s almost like she’s a proud mom, she said.

“I think the single best thing that we did was create the Diversity Scholarship,” Turner said. “When you see the talent that has come about—when you see Rianka [Dorsainvil], when you see Lazetta [Rainey Braxton], when you see Marguerita [Chang], those are diversity winners and they have come into the profession and started engaging.”

The scholarship, which includes one free conference admission, one-year membership dues, one-year chapter meeting fees, and support to thrive personally and professionally at FPA, has been awarded to 42 individuals.

Looking to the Future: What Can You Do?

The time of the frustrating “business case for diversity” conversation is gone. Now is the time for action. Oftentimes people ask, why care about diversity? For people of color, there is no choice but to care about it.

“When you’re born into things, you don’t have the luxury to sit back and go, ‘I wonder if that’s important?’” Turner said. “I am a person of color. I am a woman and it’s always been important for me.”

And it appears as though it’s becoming important to others and that people are listening.

“We’re talking honestly about [diversity] now,” said Saundra Davis, MSFP, APFC®, FBS®. “We’re not tip-toeing around it anymore, it’s not filtered conversation anymore.”

Also, Turner added, “People are listening.” However, the problem of genuine inclusion and implementation remain.

Focus on human resources.

Turner said this is the biggest area we should be focusing on. A strong human resources team can help retain talent. Good HR professionals versed in diversity can help foster a culture of genuine inclusion.

Ensure you are recruiting diverse candidates.

The excuse that you can’t find qualified candidates of color is outdated. They’re out there. And they’re highly qualified. You just have to know where to look, where to post your job descriptions and how to write those job descriptions to attract them.

Get comfortable with being uncomfortable.

People in the profession want to move the needle on diversity, Gjertsen said, but oftentimes they don’t want to say something offensive or be uncomfortable.

“That is one of the elements that is truly challenging for those not engaging,” Gjertsen said.

For Gjertsen, it wasn’t always the most comfortable thing to try to talk about diversity with people from underrepresented groups, however he got comfortable with being uncomfortable and his colleagues gave him grace, he said.

Listen to employees of marginalized communities.

If you don’t have the human resources in place, and an employee tells you about something, believe them and work to make their environment a safe space.

Work to fix the problem.

Doing exit interviews with diverse employees who leave your firm or company can help unearth some issues. Identify those and work to address them.

Advice for Planners

For planners from underrepresented groups, a few bits of advice stood out in our interviews:

Pause your movie.

Baker thought back to that conference in 2006. Though he said he never felt anybody treated him differently, there is still a truth as a person from a marginalized group any time you are in a space with thousands of people from the majority group: It’s lonely. There is a movie playing in your head about why people are not engaging with you, Baker said.

“You have to navigate that dynamic that says, ‘Am I being ignored because I’m Black or am I being ignored because they don’t care?’” Baker explained.

Represent. Another truth people from marginalized communities realize is that when they are at events, they aren’t just representing themselves, but also their groups. For instance, Baker said, recalling a conversation he had with Dick Wagner, if he were to have a few too many drinks at Annual Conference, it might lead to people judging his entire ethnic group.

“There’s a kind of pressure for me—not that it’s intentional—but if I screw something up, it is not Lee did this, it becomes they did this,” Baker said.

Make the most of your memberships. Baker said to take advantage of what’s available to you. Apply for the scholarships, join the webinars, attend local meetings and go to the conferences.

“It’s expensive to take days, hop on a plane, but it’s incredibly important to your future,” Baker said.

Find what Davis calls safe and sacred spaces to participate—whether that be Quad-A, PridePlanners or FPA Latino—and make them your own.

Don’t be afraid to make space if you can’t find it.

Davis said there are so many firm owners of diverse backgrounds because sometimes they can’t find their space in more established firms.

“People come in and they have high hopes,” Davis explained. “They’re welcomed at the beginning, but as soon as the microaggressions kick in, they try to talk about it,” but oftentimes they are not heard or helped.

Be yourself.

Davis said that she didn’t do the work she did in this arena for minority professionals to not show up in this profession as themselves.

“We shouldn’t have to not be ourselves to fit in,” Davis said. “We are equally as competent and sometimes even more so. Don’t think for one minute you’re not doing something significant.”

Ana TL Headshot_Cropped

Ana Trujillo Limón is senior editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org, or connect with her on LinkedIn


1 Comment

Even Cowboys Need Financial Advisers: What We Can Learn from Songwriters

I recently spent time with seasoned financial advisers at a business development conference in Nashville. We had a lot of fun sampling Tennessee whiskey and biscuits, walking around and, of course, enjoying the vibrant music scene.

Also learning. One of the keynote topics was a discussion and music session with some famous songwriters, Tom Douglas and Allen Shamblin, who have written music for Tim McGraw, Miranda Lambert and many other stars. Also on the panel was the president of Sony/ATV, Troy Tomlinson, who discussed the business aspects of the music arena.

It was a fascinating conversation for many reasons—not least because the music industry is facing challenges and transitions that parallel those in the financial services industry. I thought I’d share some of the panel’s insights with you, as well as the key takeaways for advisers looking to grow their practices.

Stay True to Your Voice

In songwriting, that means writing songs for and about the people you most value. Songwriters bring their own experiences, history and expertise to the music—and that’s what shapes their songs.

For financial advisers, there’s an obvious parallel. In the beginning, when you’re building your business, you tend to work with everyone who is willing to become a client. But as you mature, you start to think more carefully about who you take on. You realize that there are people you can really help a lot—who can benefit from working with you—and there are others who would be better served working with someone else. That’s where segmenting and finding a niche can really come into play.

Your business philosophy, mission and even the experiences you create for clients are other ways you show your voice. At its core, your business should reflect your convictions about taking care of people and doing what’s best for them. Does your value proposition accurately reflect your mission and voice?

Be the Guide

The songwriters discussed how important “positioning” is when writing country music. The best songs, they said, allow someone else to be the hero—the singer is merely the guide. That’s a great takeaway for financial advisers because, in most cases, you really are the guide.

Your clients come to you with worries, issues or anxieties about their finances. They can’t resolve their concerns on their own. They need someone they can trust and depend upon to help them make sense of the complexity. And you do that.

Whether it’s advising them as they accumulate money for retirement, setting up a plan to fund their children’s (or grandchildren’s) college education or preparing a retirement income plan for them, advisers guide clients every step of the way. You help them be the hero to their families. How often do your clients tell you that they feel so much better when they leave your office? It’s because you, and the work you do, help relieve them of their financial burdens.

Think about your role as a guide and work this concept into your conversations with clients. If you’ve been hesitant to ask for referrals or to be introduced to prospects, see if it’s easier to discuss your services in terms of the guidance you offer. You might say something like, “As you know, I act as a guide for my clients to help them make smart decisions with their finances. Is there a colleague at your company whom you think could benefit from sitting down with someone to make sense of the company’s stock option program or retirement plan?”

Be Creative to Connect with People

The music folks on the panel discussed the power of video and Instagram to enhance the music experience, as well as concerts and social media. The more the listeners know about the artists, their music and the stories behind the songs, the larger the artists’ following and the more enjoyable the fans’ experience.

It’s the same for you. Your clients love to hear the personal stories about what you and your family are doing, just as you delight in hearing what’s going on in their lives. The people, and their stories, come first, and that’s how you forge deeper connections.

It also pays to leverage technology and new marketing approaches. Your clients don’t have to live near you anymore. Technology allows them access to their accounts anytime, and you can interact with them via Skype or FaceTime with ease. One adviser I work with wanted to start spending a few months each year in Florida but was nervous about doing so. She worried about what her clients would think—but it turned out to be a nonevent. Her clients didn’t really care where she was physically because they knew that they could get access to her when needed. She discovered that many of her clients also wanted to escape the winter weather, and she was able to add insights to their discussions.

Even local clients and prospects might not want to travel to your office, especially if it means a nasty commute to get there. You can still reach them through newsletters and social media and engage them digitally.

How often do you post? And do you reply to your clients’ posts? Webinars, podcasts and videos are all inexpensive ways to reach clients and prospects and to convey your brand, messaging and expertise. Have you tried any of these new methods of communication? A little creativity could have a big impact on the growth of your practice.

Find New Opportunities to Monetize Your Businesses

The musicians discussed how their industry has been greatly stressed by streaming and video services. As a result, their business models and bottom lines have suffered. They said that they had been slow to react to the new competition. And they realized that they had to be creative and look for other opportunities to showcase their music and value.

The same is true for us. The financial services industry has experienced fee compression for years, and robo-advisers and others seem to arrive regularly and to take clients away. I work with advisers on growing their revenue and I see and hear the impact of so many new entrants to our arena. Here are a few key points to keep in mind:

  • Have you priced your services appropriately? Many advisers haven’t looked at their fees in years. Consider what a blended vs. breakpoint fee structure could do or look carefully at what you charge. Your operational costs have probably climbed, but you may not have realized that it’s been many years since you increased fees.

You should also keep a careful eye on the competitive landscape. As an example, Charles Schwab’s recent announcement about offering subscription models is bound to affect pricing across the board. You might do well to consider a subscription option in your own practice to help high earners who don’t yet have considerable assets to manage.

  • Are there opportunities to charge for additional services? A good place to start might be with the financial plan itself. Some advisers charge separately for creating a financial plan, while others roll it in as part of their service offering. What makes sense for your practice?
  • Can you charge fees for consulting? There may be times when it makes sense to charge an additional fee for out-of-the-ordinary services you provide. Perhaps you helped a business owner with valuations for pricing the sale of her business or may you have done some retirement consulting for a 401(k) plan. There could be additional revenue waiting to be garnered from existing clients, as well as prospects.

At the end of the panel session, the consensus from participants was that it’s crucial to let people know who you are and what you’re all about. Sound familiar? It’s nice to know there’s one constant, no matter what industry you work in!

Often, we can’t see changes in our own industry because they evolve over time and we’ve been living and working in the throes of those changes. Yet the trends and changes in a different industry can be very apparent to us. There’s a lot we can learn from the music industry and to share with our staff and colleagues to help us in achieving future growth.

Kristine_McManus_2_lg

Kristine McManus is chief business development officer, practice management, at Commonwealth Financial Network®, member FINRA/SIPC, the nation’s largest privately held Registered Investment Adviser—independent broker/dealer. Since joining the firm in April 2014, she has been working with affiliated advisers to grow their top line through the introduction of various programs, tools and coaching. Kristine holds the Chartered Retirement Planning CounselorSM designation, a master’s degree from Pennsylvania State University, and a BFA from Adelphi University. 


Leave a comment

Are You and Your Clients Making These Estate Planning Mistakes?

A recent survey by Caring.com found that only 42 percent of U.S. adults have estate planning documents in place.

The survey asked participants why estate planning documents hadn’t been established yet. Twenty-nine percent said they have no one to leave assets to, and 47 percent said they simply hadn’t gotten around to it yet, according to the AARP article, “Haven’t Done A Will Yet?”

Not Having a Will

“The biggest estate planning mistake I see people make is not having a plan at all,” Eric Roberge, CFP®, founder of Beyond Your Hammock, told U.S. News and World Report.

About 52 percent of U.S. adults have not made a will, according to BMO Wealth Management. A will is essential to an estate plan, but it’s not enough, writes Bob Carlson in the Forbes article, “7 Big Estate Planning Mistakes.”

Only Having a Will

In addition to a will, other documents need to be in place for an estate plan to be thorough. These include power of attorney, trusts and advanced medical directives.

Neglecting health care power of attorney is also a common estate planning mistake. A health care power of attorney is “all about you, before you die. A will is only about dividing up your property when you’re not around,” lawyer and author Sally Hurme said in the AARP article.

Without determining the person who can make decisions upon incapacity, or stating your wishes in a legal document, state or local law will determine who gets to make these decisions.

Not Updating Beneficiaries

Estate planning mistakes aren’t reserved only for clients, as Nancy L. Anderson, CFP®, wrote in Forbes. Anderson shared how she had divorced her husband when her children were ages 2 and 4, and changed her IRA beneficiary to her father. Twenty years later, she realized she hadn’t updated that, despite her kids being grown.

“If I’d passed away before making a change, it could have been a disaster for my family,” Anderson wrote.

Neglecting Digital Assets

This has been on the radar for a few years, but recently came to the forefront when the CEO of QuadrigaCX, a Canadian crypto exchange, died in December without giving the password to offline cryptocurrency wallets to anyone. Customers with $190 million in cryptocurrency stored with QuadrigaCX might not see their investments again. While neglecting digital assets likely won’t cause your clients’ heirs millions, this is a reminder to not ignore them.

Ana TL Headshot_Cropped

Ana Trujillo Limón is senior editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org, or connect with her on LinkedIn