Practice Management Issues
In 2004 Hughes is confronting some of the typical management problems of the successful one-person practice. As someone who cares deeply about the larger world and the public good, he is also challenged by a paradox common to many advisors: Those who need his services the most tend not to obtain it. And those who already have considerable assets and need the services the least are usually the ones who do.
Hughes acknowledges the paradox, but says it will take a while to correct itself. "The fact that more young people are interested in getting financial planning training is good. So they will more easily dialogue with their contemporaries about the problems of planning," Hughes says. He notes with delight that his teenage son, Charles, is considering pursuing a joint CFP/law degree. His daughter, Kelly, has no interest in planning, but expects to pursue a journalism career.
Like many solo practitioners, he's not hunting for prospective client these days. "We've come to the limits of our growth cycle. It would be difficult to take on more clients," he says.
Today, new clients come through referrals. He has about 75 who use comprehensive financial services, while about another two dozen use piecemeal services. Hughes has some $50 million in assets under management. His clients tend to be well off, although the practice was never set up to serve the affluent. Hughes' clients tend to be approaching retirement and often are considering buyout packages or need his advice on whether they can afford retirement.
Hughes, who has been a fee-only planner since 1987, usually charges on an hourly basis for planning services and doesn't require income or asset minimums. However, for clients seeking soup-to-nuts planning and asset management, he stipulates that they must have a quarter of a million dollars in investable assets. For those with whom he has a long-term relationship, he charges a fee for assets under management.
Concerned that he might fail to keep up with all the changes in the profession, Hughes is actually thinking of adding another CFP licensee to his practice after 25 years of resisting it. His wife, Katie, who is not a CFP, runs the two-person office and, according to friends, organizes her husband's high-energy activities. Her friendly phone manner is usually the first voice one hears when one calls. "She has been so important because I can leave the office and go out of state on business and know that everything will be taken care of," Hughes says.
Hughes And Planning's Big Picture
Larry Carroll, a long-time CFP licensee who heads his own firm in Charlotte, N.C., says he always found Hughes to be "a high-integrity guy." "He's not the first guy whose name comes to mind when you think about the start of this profession," Carroll continues, "but his quiet, effective leadership has made a big difference."
Hughes became an ICFP board member shortly after he started his advisory firm in 1981. He also served as president and later as executive director of the ICFP in the 1980s.
Hughes is happy about the progress his profession and business have made in the past three decades. That's because his practice is thriving at the same time that the profession today is finally recognized in the mainstream of the securities industry. "The public and media now recognize financial planning and the certified financial planner as part of a legitimate profession," says Hughes. He adds that the problems of the profession were more difficult than just the lack of public recognition.
"It used to be that the wirehouse officials wouldn't let you put a CFP on your business card. Today, they are pushing more and more of their people to get the CFP. They've given the people every incentive to do it," Hughes says with quiet satisfaction. He adds that he was "cynical about those people ten or 15 years ago because the CFP just didn't seem to fit in for them then."