It's not easy to be young in the financial planning industry.
Younger planners have a lot to offer, but can face numerous hurdles to success, said Joseph D. Pitzl, director of financial planning at Intelligent Financial Strategies in Edina, Minn. Pitzl, 30, is the national chairman of NextGen, a collection of 300 planners under 36 that is part of the Financial Planning Association of Denver.
"The generations prior have all had the ability to come into the field and make their own path," Pitzl said. These older advisers "developed their own philosophies" and were able to put them into practice by starting their own firms.
Pitzl said that for a young planner, just coming into the profession, there is "a constant evaluation — do my philosophies actually match those of the firm that I'm working for?"
A peer group, NextGen holds various events, including several in concert with FPA retreats and meetings. For example, at an event in July, the FPA's leadership will meet with NextGen members to answer questions and discuss issues about the profession.
"There are some interesting challenges for a young adviser," Pitzl said. For example, younger planners do not have the life experience that the older generation has, and some clients may find that difficult.
Also, "young advisers have a real tendency to cling to the technical side, demonstrating knowledge and ability rather than actually focusing on the client," Pitzl said. While technological expertise can be a standout skill for a younger generation planner, client focus is still crucial, he said.
At the same time, youth can also be an advantage — as long as the previous generation of planners is willing to give up the reins.
Many clients are "looking for someone who is going to be around for a long time," Pitzl said, so a firm that has younger planners to carry the torch can use that as a selling point.
And older planners are facing their own challenges, too, Pitzl said, including succession issues. Many financial advisory firms are still essentially solo practices, run by the people who build them. Now, approaching their own retirement, these planners are "forced to have to start to think about converting the practice they've built into an actual business."
Some will sell. But others who would like to see their firms continue to grow and prosper need to turn to the next generation of advisers, Pitzl said. These young people must be permitted to "grow and mature in the firm," and become leaders in their own right. Unfortunately, he said, "there just isn't a set path for that" at many firms. "A lot of it depends on who is running the firm today and their ability to, perhaps, give up certain controls."
Pitzl said that the lack of a clear career path in financial planning is "a turnoff to a lot of people coming into the industry."
"All of your peers that you're graduating with that are going into different fields, they all have a track and a career path. If they put in their time doing X, Y and Z, then they'll take the next step."
There's just not that level of clarity for young financial planners. Some of these younger planners have moved on and started their own firms, including Pitzl and the president of his firm, Jason Good, who is also in his 30s. Intelligent Financial Strategies has between 80 and 85 clients and manages about $130 million.
Lee Gjertsen is a freelance writer based in Boston, Mass.
