FPA programs aim to build the profession of the future.
In the fast-changing world of financial planning,
the Financial Planning Association is partnering with planning firms
and financial corporations to keep pace with the changes and promote
the profession. In the end, both financial planners and their clients
benefit, according to the many organizations and individuals involved
with the varied programs.
The newest promotion to be added to the FPA portfolio is the Alliance program, designed to recognize an outstanding large firm that promotes the high standards espoused by the FPA. But this is only the latest effort, which joins others such as the two-decade-old residency program, designed to foster passion and insight into the professional lives of planners, as well as the opportunities for national sponsorships.
Each is orchestrated to promote the FPA in its leadership and advocacy role while promoting best practices among members. At the same time the FPA is expanding the existing efforts, it is looking for new ways to promote and elevate the profession, says Marvin W. Tuttle Jr., CAE, executive director and CEO of the professional association.
"If the FPA is to be successful, we need to engage major firms in our activities," explains Tuttle. "We not only want firms that support our campaign to attract FPA members, but we want to align ourselves with firms that promote our principles and we want to recognize firms that live up to those principles.
"By the same token firms, such as Lincoln Financial, want to be known as financial planning organizations that promote a high standard of performance and put clients' interests first," he adds.
Lincoln Financial Advisors, based in Philadelphia, became the first and so far only FPA Alliance firm, although the FPA is hoping to add more in the future. To qualify, a firm must have at least 50 CFPs and 90% of them must be FPA members. Beyond those nuts-and-bolts issues, the more philosophical goals are to promote an atmosphere of "lifelong learning and leadership initiatives within the organization to further exemplary financial planning practices for the ultimate benefit of the client," according to the promotional material for the Alliance program. The Alliance firm also must "support FPA's commitment to pro bono efforts by providing community service to the public in need."
Rich Rojeck, who is based in the San Diego office of Lincoln Financial Advisors, notes that his firm is more than proud to be the first Alliance member and attributes their selection to the standards Lincoln Financial practices. "The Alliance program is only open to firms that meet the numbers criteria, but the firm also must support the FPA code of ethics, which is that financial planning is a client-centric process. We also have a strong commitment to training and continuing education."
In return, the Alliance firm earns the bragging rights to the title and gains exposure through FPA. "The major financial services firms have obviously focused their message on the need for planning and, of course, the value of their advice in helping people achieve financial security," says Rojeck, managing director of Sagemark Consulting-Lincoln Financial Advisors and head of the Pacific southwest region. "Consumer confidence is vital to their use of these services, and the FPA's Alliance program can be instrumental in encouraging firms to deliver quality advice. As a firm that has been committed to the financial planning process as the basis for providing advice for over 60 years, and now with the CFP mark, we were honored to be selected as the first FPA Alliance firm."
In the past, FPA did not have a lot of programs designed, like the Alliance program, to nurture large firms that exhibited high standards, says Sean Walters, FPA managing director of knowledge and market development and the liaison to the large firm advisory team. "We don't have a catchy name for our overall large-firm outreach effort, but the Alliance program is part of that and it is a recognition of a large firm that delivers high-quality financial planning. We want to be a lot more active in the next few years in promoting these large firms," Walters says.
In the near future, the FPA also plans to roll out a program designed to recognize and assist smaller firms. Any firm selected for the Alliance program has to have a strong commitment to continuing education, one such program being the FPA Residency program, which was originally conceived of by a predecessor organization two decades ago and then revitalized in the late 1990s. The Residency program is a week-long boot camp designed to help relatively new financial planners-those with less than three year's experience who are sitting for their CFP license or have recently obtained it-transcend the science of financial planning and learn the art of the profession.
"Good financial planners come out of college knowing how to use things such as tax analysis tools and estate planning tools, but we want to stretch them, to show them how to use their best tool, which is themselves," says Krya Morris, founder of Morris Financial Concepts Inc. in Charleston, S.C., and a major force behind the Residency program. "Good financial planners really know themselves. Through the Residency program, we want to plant the seeds in new financial planners to take them beyond the numbers, to show them the part of the profession that is above the bottom line."
Going through the Residency program instils a passion for the profession in participants, who are presented with real world case studies by mentors and told to come up with a financial plan. "They always want us to come up with a plan for them, but we refuse to do that," Morris says. "We want them to bring a lot of thought to the process, which creates a bubbling dialogue among the participants."
Morris wrote the curriculum for the Residency program when it was revived in 1997 by an FPA predecessor, the Institute for Financial Planners, where she served on the board of directors. The first year there was one program and only broke even. By the next year, the participation level doubled and there was a waiting list. Tuition fees for the Residency program are paid for by the participants' firms or by the individuals. Many of the mentors, who are the Residency teachers and have at least ten years' experience in financial planning, return year after year. Some, like Mike Ryan of Paragon Asset Management in Wilmette, Ill., and author of the recently published Colors of Money: Finding Your Money Force, started as participants and later become mentors.
"At this time, there are a lot of firms looking to hire financial planners and there are a lot of new planners, either just out of school or people starting second careers," Ryan says. "The Residency program is the way to learn about the heart of financial planning. We always say, 'Clients do not care how much you know until they know how much you care.' Instead of the technical aspects of the profession, the Residency program, among other things, teaches you how to really listen. It is a wonderful experience that helps planners create a sustained relationship with clients and it is a way of starting off a career in a way that will guide you for the rest of your professional life.
"We recognized that a program is driven by personalities and we knew there could be problems when those original personalities leave," Ryan says. "So we worked hard to set up a mission statement so that the program can be continued and it will generate its own enthusiasm."
The Residency program grew from ten mentors to the current 40 to 50, each of whom is required to go back through training once every two years. The program is now offered several times a year, including one session at State Farm in Bloomington, Ill., that is offered strictly for State Farm investment advisors, the first, and so far the only, Residency program offered as a collaboration between FPA and a corporation.
A desire to find out more about the financial planning industry as a whole motivated State Farm to bring a Residency program in-house. State Farm has 260 financial planning agents throughout the country, and a group of 26 to 30 has participated in a Residency program for each of the last four years. A fifth program is in the planning stages.
"We have a closed system of agents and we wanted our agents, particularly new agents who were entering the profession, to see what it was like from an industry perspective, rather than from just a State Farm perspective. We purposely did not want to make the program a State Farm program. We wanted it to be an outside program. The FPA hires the mentors and arranges the program for us and it has been a great success," says Frank Moore, State Farm program manager for the corporation's personal financial planning program. "At first there was some concern that exposing our agents to products that we could not provide might be upsetting to them, but we found it was just the opposite. We are good at providing what we can. Our clients are from middle America, and people in middle America need help. There is plenty of room in the financial planning industry for growth for everyone.
"The Residency program was successful because the traditional role playing is a technique that works," Moore adds. "It teaches our agents to ask the tough questions they might not otherwise ask."
Another collaboration between FPA and large corporations exists with Thornburg Investment Management, based in Santa Fe, N.M., and Nationwide Financial Services, based in Columbus, Ohio, the two companies that are national sponsors of the professional organization. Both have long histories with the FPA and its predecessor organizations and have, within the past few years, increased their involvement to become national sponsors of the organization and its events.
"Every year we find more value in working with FPA. Members recognize us as a partner in finding solutions to guild their practices and better serve their clients," says Leigh Moiola, managing director of Thornburg Investment Management, a national sponsor for the past three years. "We believe in the process of financial planning and we are concerned about the financial well being of Americans. We want to help people reach their financial goals and any organization that supports that, such as the FPA, is one we want to support. This is a way to give something back to the financial planning community. It is also a branding opportunity for us to be recognized as a resource and recognized for our expertise in a niche market for creating focused equity portfolios and laddered bond portfolios."
Nationwide had served as a regional FPA sponsor and sponsor of the virtual learning center before becoming a national sponsor last fall. "We are committed to the same solutions for investment professionals and for consumers as the FPA and we are aligned with their educational goals and with their focus on client-centered financial planning," says Jeff Whetzel, a spokesman for Nationwide Financial Services. "We get some exposure from the sponsorship, but we also get to participate in the FPA education programs, which are important to us. Financial planning is for everyone-for today's college graduate who is mired in debt, for a country with a savings rate that is at a historical low, and for people who are contemplating retirement readiness. Being a national sponsor gives us a nice platform for our financial planning service."
The idea that financial planning is not just for the wealthy is a central theme being championed now by the FPA and is an idea the organization wants to popularize. "We have been pigeon-holed by some who think financial planning is only for the affluent," says Tuttle. "We do not believe that. Financial planning can be for everyone and we are working through corporations to develop business models to demonstrate that concept."