Lessons from America

Roger Kennedy has recently returned from Dallas, Texas, where he’d been attending XYPN17. If you’ve previously only thought of Dallas as the home of J.R. Ewing, shoulder pads and cowboy boots then think again, this was a four day conference for the next generation of financial planners.

Billed as the ‘unconferency conference’, the event was attended by 500 financial planners from all over the States with just two people from the UK (one of whom was Roger!). Firms ranged from the small to the large, with one having funds under management of 1 billion USD and a turnover of 15 million USD.

Eminent keynote speakers from within the industry included Michael Kitces, co-founder of the XY Planning Network and the editor of the Journal of Financial Planning network and Mitch Antony, founder of Advisor Insights and The Financial Life Planning Institute, famous for describing financial planning as returning ‘life’ not ‘investments’. Andre Novaes also gave an impassioned speech about transforming the lives of 1 million Brazilians, despite the fact that 99% of the population have never heard about financial planning.

It was also an opportunity to see some of the new technology available to help financial planners deliver their services to Gen X or Gen Y clients. Options included instant messaging, video conferencing and also assessment tools to predict wealth and build client behaviour.

Roger wanted to go over to America to see what they were doing in terms of client service proposition and technology as initiatives there can often be a precursor to what will happen in the UK.

In terms of key observations, Roger highlighted the following:

  1. America may be ahead of the UK on the technology front but while it’s true some systems are more integrated, they still share similar frustrations in that there is not one single bit of software that everybody uses. As a result, they still have to input data in more than one place.
  2. Everything is digital in the States – it was completely alien to them that ‘wet’ signatures would still be required for documents.
  3. As you’d expect, everything in the States is service driven so service delivery to clients is very good.
  4. Regulation is not as far ahead as it is here. Much as advisers may moan about the FCA, it does have the advantage of being one single regulator. In America, each financial planner has to register with each separate State if they have more than 5 clients in that State. It would be like an adviser having to register in Co Antrim and Co Down, too!
  5. They share the same challenge that there is not one term that clearly explains to the public what a financial planner does – they too use IFA, adviser, wealth manager and financial planner.
  6. The fee-based structure is similar to the UK but in America it’s the custom to pay up front, not when the work is delivered.

The particular requirements of millennials were highlighted; many have a negative view of financial services, particularly those whose parents were hit by the 2008 financial crisis and so advisers need to work hard to win back their trust. They are also likely to be more tech savvy and cost conscious.

Roger found the conference an inspiring experience and well worth attending. It was gratifying to have it confirmed that all the work AKFP have been doing on the client proposition, on marketing and on their systems is along the right lines. It was also encouraging to meet with other Life Planners and share ideas for best practice.