I’ve been reading a review copy of Julie Littlechild’s new book, “The Pursuit of Absolute Engagement,” and enjoying not just the way it’s written, but the way that it provides a workable blueprint for financial planners to change their lives. I approached this same practical “change your life” goal in my own (recently-published) book, “The New Profession,” by giving examples of successful advisors and describing their most powerful insights in multiple dimensions. Julie takes the approach of helping you change yourself, internally, step-by-step, so that you actually build from the inside out a better, more effective more engaged “you.”
While reading her book, I began to understand the odd divide between Generation X and Millennial planners—the latter the successors of the former. When the Generation X planners started out, they experienced a maximum of personal satisfaction as they engaged with clients who really needed help in their lives.
Inevitably, during this early time period, they experienced a minimum of prosperity. They needed to help their clients succeed financially before they, themselves, could achieve financial success.
Fast forward to today, and that’s exactly where Millennial planners are. That is, their natural evolution will be to start engaging with their unwealthy peers and experience that off-the-charts personal satisfaction that comes when you help people learn the ropes of financial success.
The problem is that many Gen X planners have gradually, incrementally, too-slowly-to-notice, traded personal satisfaction for prosperity. They’re running financially-successful business, but they’ve forgotten some of the financial pain and personal satisfaction of their early days. As a result, they’re impatient for Millennials to bring in “appropriate” clients who have substantial sums to invest.
This attempt to short-circuit the life-cycle of a financial planning career might work for an occasional advisor, but those will be the rare exceptions. When Millennials market themselves, they need to go through the process of building their client base one successful engagement at a time—and if they’re good, the net present value of those “inappropriate” younger clients will be as great or greater than the aging decumulators that the Gen X advisor is currently attracting.
In my book, I predict a lot of trends, helping advisors recognize where their profession is going to be ten years in the future. In Littlechild’s book, she advocates for absolute engagement, which means recapturing that personal satisfaction that has ebbed out of many Gen X advisors’ lives. Their Millennial successors can tell them where to find it, if the founder/advisor is willing to listen: it’s in recovering that incredible feeling where you help people who genuinely need your help get to where they want to go. If your clients are already there, then that engagement level has ebbed away.
The two books intersect in two ways. Both advocate that you identify a group of individuals that you really enjoy working with, where you know you can add remarkable value to their lives. For Millennials, this may be any of their peers—at least initially—whereas for a mature firm, it means defining a target market, a subset of those people who meet your minimums who happen to have specialized challenges where customized advice really makes a difference.
And both books point to a different revenue model. AUM has served the profession really really well, but it has too many conflicts of interest to be the model of the future. And AUM is a poor way for Millennial advisors to charge their peer clients for the services they provide, particularly if those clients have high incomes but are burdened by student debt.
Some years ago, I said that some of the energy had ebbed out of the financial planning profession. Littlechild’s Absolute Engagement book helped me see where that energy had been, and how to recover it. Few professions offer the level of personal satisfaction that you can get from being a financial planner. We just need to remember how important that satisfaction level is, and find ways to bring it back into our lives.
And, in the meantime, we need to let the Millennials have their turn at discovering the positive energy that fuels a career in financial planning. It’s our profession’s version of the circle of life.