September is one of those months when there are almost too many great conferences to attend, with too many helpful topics to choose from. There were two I attended in September 2009, one a financial planning conference for divorce and the other a summit on practice management. These two subjects might seem to have little in common with each other, yet this year, a lot of the talk at both conferences was about the same thing: the poor economy.

So why is the economic downturn important to divorce planners? In her opening address to the Association of Divorce Financial Planners' conference in New Rochelle, N.Y., association President Lili A. Vasileff, CFP, CDFA, somberly detailed many of the financial challenges facing divorce financial planners this year. For one thing, it's been difficult to afford a marital split in the current financial circumstances. However, Vasileff's comments were not all doom and gloom, and advisors are hopeful about the recovery of the financial markets, which would signal a return of their own business as well. (The association's Web site is

The conference focused on many aspects of divorce specialization among financial planners. This includes, but is not limited to, an emphasis on collaborative divorce, in which family law attorneys, divorce attorneys, therapists, forensic accountants and others join together with the couple in a true group effort to end a marriage under the most favorable financial terms to all parties involved. The idea is to create a winning situation for the client as well as the advisor. In a true collaborative environment, no one person is higher in stature or control than another. This arrangement offers a great opportunity to share information and advice in an unbiased environment, although the cooperation can be tough to achieve given the desire of attorneys to control most negotiations.

Collaborative divorce requires the advisor to work with both clients. Once the marriage is dissolved, the advisor cannot manage the assets of either spouse, which would be an ethical breach. (How, after all, can an advisor suggest an impartial solution if he or she might be managing the money after the fact?) However, the advisor is not prohibited from offering service later to one party if the collaborative divorce efforts break down. The advisor must simply end the engagement and refrain from working with either party in the divorce itself.

The fee for the advisor in this type of divorce is limited to the billable hours associated with the divorce itself. While this may seem like slight compensation, it does have an upside-in complex cases, where representation is needed at mediation hearings, in depositions or at trial, the financial planner can and often does charge additional hourly fees. And again, there is a possibility the mediation efforts will fail, which allows the advisor to manage assets later.

Clearly, people who want a divorce will seek one out regardless of the current economic conditions. But a contested divorce might be unaffordable in difficult times, and collaborative divorce (though perhaps not as attractive to one or both spouses) might be more practical. At least in a collaborative divorce, the advisor can help limit the economic damage.

Putting aside what the economic climate has done for divorcing couples, it has also crimped financial advisors' revenue, a subject discussed at the Schwab Impact conference in San Diego.

This economic pressure on advisory firms has forced them to put more focus on cutting costs and boosting their efficiency. Schwab's practice management and technology sessions stressed the continued adoption and use of software and other technology solutions to increase practice efficiency. In other sessions, discussions were held on alternative fee structures. Those practices whose fees come almost solely from a percentage of assets under management were hit hardest by the stock market declines. In some cases, practices experienced as much as 40%-45% declines.

One way of fighting back is to revisit how you charge for your services. More practices are adopting hybrid pricing models-fee structures with both fixed and variable elements involved. Maybe the financial advice component could be restructured as an annualized flat fee (one still billed quarterly) based on estimates of the actual work performed, while some percentage of assets under management still draw a fee. In some cases, advisors who have adopted such structures have reduced the AUM fee percentages to become more competitive with other firms, while not actually hurting their gross revenue.

One Schwab productivity session covered techniques to improve employee productivity and accountability through management reports. Such reports measure a firm's revenue per employee and its profits per employee, particularly in practices where multiple staffers perform similar functions, so that an advisor can uncover wasteful and unproductive activity. The key is understanding the relationship of your human capital and technology, not to mention your financial capital, to your revenue and profitability.

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