by Joe Pitzl, CFP®
As the pioneers of financial planning begin to plan for the next stage of their lives, there is a real threat that a vast amount of knowledge and wisdom may leave with them. While many planners have expressed an interest in continuing to work until they die, a large contingent have expressed plans to scale back or exit the profession altogether. In either event, the demographic makeup of the planning profession presents a steep challenge for the next generation.
This generation gap is not exclusive to financial planning. Many large corporations are seriously threatened by this phenomenon and are struggling to develop the necessary steps to ensure a smooth transition. A study by IBM Global Business Services found that the elements required to mitigate these challenges are identifying critical skills and capabilities of those exiting, transferring knowledge to their replacements and reducing the time-to-competency for newer professionals.
Understanding Generational Differences
For meaningful and harmonious transition to occur there has to be a more conscious effort to better understand one another. The differences between generations are often painted in broad brushstrokes, and that can lead to very unproductive conversations. However, each cohort has certain behavior patterns that can help us form a framework for learning, communicating and interacting effectively. In reality, these patters do not necessarily outline generation gaps-they reflect cultural gaps. Regardless of generation, those willing to learn and understand these differences have a much easier time engaging in meaningful, productive dialogue.
According to the TCB Research Working Group, a consortium of researchers dedicated to the study of multigenerational knowledge transfer, Generation X (those born in the 1960s and 1970s, although definitions vary) prefers action learning-they want to learn by solving real problems and gaining real-life experience. Generation Y (the generation following Gen X) places the highest emphasis on connectivity, exploration and trial-and-error methodology. Both generations X and Y prefer learning and communication to be autonomous, constant and free-flowing. Neither cohort likes to be told explicitly what to do; rather, they prefer to be challenged and mentored. As they try things, they prefer constant feedback and ongoing communication about what they are doing right or wrong.
The group went on to say that boomers, on the other hand, tend to prefer formal, face-to-face training and text-driven material focused on facts. They were brought up in systems that focused on guided, linear learning in specified periods of time. As such, they tend to prefer structure in the learning process. Boomers believe strongly in their ability to change things for the better. They also tend to be very optimistic, idealistic and like to be recognized for their wisdom.
Generational or Cultural Divide?
Based on this brief overview, it is evident there are drastic learning style preferences and disparity in communication methods in our society. That being said, we all know twenty-somethings that can not find the "on" switch on a computer, and boomers that travel the world while staying completely connected to their office and clients via their iPhone. When we discuss these differences as generation gaps, one could argue that we are ignoring the folks that have already figured it out. The underlying issue is not about one generation's style being superior to another, rather, it is putting our heads together to figure out how to coexist and flourish.
If we are careful not to apply the research outlined too literally, we can derive a great deal of useful information from it. For example, the "connectivity, exploration and trial-and-error methodology" preferred by the Generation Y planner might begin to explain why they are so eager to try out their planning knowledge with real clients. As a Gen Y planner myself, I certainly do not advocate unleashing a new planner on your established client base. However, there are creative ways to feed those cravings.
A simple example of this creativity can be seen in the efforts of the firm I joined out of college. The young planners on staff were coached by the firm principals under a "build it, try it, fix it" mentality for a number of years as the firm grew. This trial-and-error process, which focused on bolstering service offerings, creating new planning templates or attaining greater firm efficiencies, took place behind the scenes, but ultimately did have a meaningful impact on the client relationships.
Each young planner had ownership of specific projects, conducted his or her own research, and tested and refined their process. When each project was complete, the firm had a new, fully customized service offering that could be quickly integrated into any planning relationship across the firm. This work was real and meaningful without requiring a giant leap of faith from the firm owners. Further, it provided the means to develop training programs for new hires that greatly reduced the time-to-competency for new planners.
Much has been said about loyalty (or lack thereof) in the younger generations. Generally speaking, these generations are extremely loyal to people, places and things that they feel a strong connection with. Loyalty in these generations lies with the relationships in an organization, not to the organization itself. In other words, great mentors drive loyalty much more than a great brand.
A Look in the Mirror
Several years ago, a handful of young, aspiring planners met at an FPA Retreat and naturally banded together as the only attendees under age 35. Wanting to keep in touch after the event, these planners established an online community for shared, ongoing conversations. Out of their efforts, the FPA NexGen community was born.
FPA's NexGen community has evolved into a vibrant group of bright, young planners with a passion for advancing the profession. The vision statement of NexGen is "to ensure the transference of wisdom, tradition and integrity from the pioneers of financial planning to the next generation of our profession." As I gaze into the mirror and ponder what our community must do to realize that vision, it is evident that we ought to be doing more instead of waiting for it to happen.
Best-selling author Stephen Covey's primary principle of mutual understanding is to "seek first to understand, then to be understood." In the very early stages of my career, I often violated this principle. I could not wait to try out everything I had learned in my CFP certification classes and when I thought I had a better way of doing things, I was going to make sure it was heard. While the message l was trying to convey may have been on point at times, the delivery was off-putting. Fortunately, I had some great mentors inside and outside of the organization to steer me back on course. Similarly, the growth of NexGen and its members can be attributed to similar relationships with individuals and communities across the country.
Building Bridges
The NexGen community alone can not achieve our vision. We remain committed, but are lacking a critically important element to making it a reality-partners to share in that vision. The conversations on our message board and taking place at our gatherings closely mirror those shared under the trees at Retreat and the hallways of the national conference, both in format and content. However, as a community, we ought to work harder to contribute to these conversations outside of our bubble and invite all planners to join in the conversation at the NexGen Gathering in Estes Park in May.
While we are all in different stages of our lives, we have a shared responsibility to guide this profession in the right direction. As FPA President-elect, Marty Kurtz, CFP®, recently told me, being a young planner or an old planner is just a place. It does not define who we are and does not limit what we can be. We need each other and the future of the profession is brighter if we progress toward it stride-for-stride.
A critical element to achieving this harmony is finding more ways to connect and communicate with one another. Whether your preferred method is talking, listening, writing, texting, meditating or just starting at each other, we ought make all of these options a possibility.
NexGenners are working on numerous initiatives within our community to invite and encourage these conversations; however, we need partners willing to share their wisdom and experiences. You may begin to see notices of NexGen gatherings in your local chapters, so please take a moment to reach out to these folks and perhaps request an opportunity to share what you have learned over the years at one of their events. One of my most influential mentors volunteered her time to speak at our event years ago and we still get together monthly to this day. Our relationship has been invaluable to me throughout my career and she has picked up a few useful nuggets along the way as well.
One of our members is creating a think tank dedicated to helping industry thought leaders figure out how to turn their great ideas into reality more efficiently and effectively. Great idea people often struggle with implementation, so this project is an effort to provide the support needed to ensure those great ideas do not get lost. This think tank is in not exclusive to NexGen members, but there is a great deal of energy surrounding this project as a way to support those who have supported us.
As we push this profession forward, we can achieve our common goals more quickly through connectivity and shared experiences. We all believe financial planning is destined to be an authentic profession and through collaborate effort, we can be.
Joe Pitzl, CFP®, is a financial planner with Mindful Asset Planning in Apple Valley, Minn., and the current president of FPA NexGen. Contact him at joe@mindfulplanning.com .
Attend the NexGen Gathering: May 21-23
Planners of all generations are welcome to attend the NexGen Gathering in Estes Park, Colo. May 21-23, where some of the industry's brightest young planners will spend the weekend sharing ideas, concerns and visions of the future of financial planning. It's one of the least expensive conferences you'll attend this year, at $175 for registration fees and shared lodging (add $80 for private accommodations) at the YMCA of the Rockies. Contact Jude Boudreaux at jude.boudreaux@gmail.com for more information and a registration form.
