This week the Financial Planning Association and SoFi, a leading provider of financial planning tools to a primarily post-college membership, announced a partnership to give financial planners, especially those new to the industry, access to a suite of financial solutions, services, and educational resources at preferred rates.
“For a new planner, it’s a nice start. We know that, statistically, about half of newly minted CFPs go to larger firms, and about half go to smaller firms or hang out their own shingle. But how do they get started?” queried Patrick Mahoney, the association’s CEO. “The larger firms have their own proprietary systems, but the independent practitioners don’t have to capacity to operate at that level on their own, especially at the beginning. We want to give the independent practitioner a little leg up.”
The FPA has been expanding the services it can connect its roughly 19,000 members to at a discount, and the SoFi partnership is just the latest. In the last year, the FPA has offered education and tools in cybersecurity, digital currency and social security benefits.
“We just added the Chalice Network, which gives our members discounts in business, but those can also be used personally. We have access to Chalice’s technical stack, but also to Verizon and Staples,” Mahoney said. “Everything that makes an office run.”
What made SoFi so attractive as a strategic partner was the financial services company’s focus on the youngest of the Millennials and on Gen Z, whose oldest cohorts are at most a year or two out of college right now.
“We have a very documented student debt crisis. Any family with kids in their late 20s or early 30s, those kids cannot tell you what their plan is to buy a home because they’re saddled with so much debt,” Mahoney said. “A lot of CFPs are trying to negotiate loan consolidation for their clients, getting them on a payment plan, and getting them disciplined in paying it off as fast as possible.”
SoFi, with the discounts the company can offer with student debt consolidation and free tools to help assess levels of debt, was a natural fit. “We actually had approached them on a different business venture that didn’t pan out but that led to other conversations, and this was one of them,” Mahoney said.
At the same time, he continued, the FPA has been on a mission to increase its relevancy among its membership, and offering meaningful benefits is a critical part of that relevancy.
“We have to pull ourselves into the 21st Century, too,” Mahoney said. “The more benefits we offer our members, the better our members do and the more members we attract. A rising tide raises all ships.”
SoFi CEO Anthony Noto said the company sees itself in alignment with financial planners, not in competition.