I know that bigness doesn't mean badness and that just because a firm grows doesn't mean clients are treated worse. It's just this irrational fear I have that planning will lose the personal part, the part where you know the client's dearest dream for his life-to live on a lake or collect miniature trains or go into the Peace Corps. For me, that's what makes financial planning magical. The planner doesn't believe that the answer to every question is: Make more money. Save for retirement. Pick out a cemetery plot.
I don't think I've covered any other profession that has worked so hard to raise and polish its image rather than try to get more money by blurring its image. But you never want to get to the place where you're looking back on your moment of glory. You always want to be looking ahead at your next goal. Is industry consolidation the only answer- or the best answer-to survival?
A couple of years ago, I wrote a book called In Search of the Perfect Model in which I intended to outline two or three models for a financial advisory service that were emerging as the best and most successful choices for the future.
As it turned out, each successful practitioner who I interviewed had developed his own model. I couldn't categorize them or suggest one as the best bet. There was Janet Briaud's work with professors in Bryan, Texas, the Sheryl Garrett fee-by-the-hour model, which Garrett franchised, the Harold and Deena design in Miami.
At the time, I still thought that being a sole practitioner was an option-that it hadn't gone the way of other mom-and-pop operations. And best of all, it had romance, just like Charles Lindbergh. I couldn't let go of that model. But in the last year, some of my favorite solo planners-Judy Shine and Bob Wacker and Judy Lau-have decided that size matters and that joining a big planning organization is the best answer. "The thing is that financial planners are getting smarter and the banks are getting smarter," Judy Shine says.
Mergers and acquisitions are an important discussion point in every firm's growth plans. "Part of my own study group's discussion-and everybody else's discussion now-has to do with growth of the business and succession planning," said Wacker.
Of course I know many planners with large firms who have clung to their values-Tim Kochis in San Francisco and Peggy Ruhlin in Columbus and Charlie Haines in Birmingham, and Jack Blankinship, among others. But I also know Tom Connelly, a top planner in Phoenix who left the growing firm he founded with Bob Keats to return to a solo practice.
So I'm having trouble connecting the dots. When planners say that industry consolidation is the only solution to shrinking profit margins, I dig in my heels. How does a solo practitioner stay in the game? How does a firm preserve the core values when it must begin hiring?