I feel it is worth highlighting from the outset that the phrase ‘LastGen’ sounds rather harsh and dismissive of the generation of financial planners who are soon to leave the profession. This isn’t my intention whatsoever – I am actually a huge fan of the departing generation. As this article will explain, I feel we all have a lot to learn from experienced financial planners who may be looking to enjoy the type of retirement they’ve spent a lifetime helping their clients to achieve.
It has been a decade since I joined the financial planning profession as a keen-eyed teenager, books in hand, ready to learn. It’s remarkably easy for me to list things that have changed since 2010 – but one that hasn’t – is the staggering statistics which state the high proportion of financial planners who expect to depart the profession within five years. Until now, they haven’t really been leaving but my gut instinct says that this will start to change very soon.
I believe that financial planners who are happy and willing to sell their clients to an acquirer either have sold, or will sell, very soon. There are plenty of offers in the marketplace, offering up to 8x ongoing revenue. For a typical experienced financial planner, who looks after 100 clients, each with £500,000 invested, charging 1%, this is a staggering £4,000,000 retirement payout spread over an 18 month handover period.
The offer is there. But they are not taking it. So… why not?
I was given the opportunity last Autumn to speak to the finance students of Sussex University about the financial planning profession and why they may want to consider it for their own career. I painted the picture of the dilemma our profession faces, whereby stalwarts of the profession are keen to move into retirement but hang on for years longer than they had planned to, because they cannot or do not wish to sell their clients. Quite simply, they care too much about their clients and can have difficulty letting go.
With regret, I think that there is an entire cohort of experienced Financial Planners, either working solo or within a small or medium sized firm, that will finally make their decision to leave the profession very soon. For some, COVID will have shown them what retirement could look like – and they’re now making plans to transition out. For others, maybe a succession plan is lined up and ready to give an escape route with happy clients being supported by a new team they have recruited. Sadly, there will of course have been some financial planners in their late 50’s and early 60’s in 2010 who expected to retire within a few years and are now in their late 60’s / early 70’s and may be forced into retirement by poor health.
To understand how we can work with and learn from the ‘LastGen’, I think it’s useful to understand the journey they have been on and the challenges they have faced.
For every successful IFA in the late 1980’s, there were another ten failures who lost their job as they couldn’t meet the targets of the direct sales force they worked for. This was a harsh and competitive environment where only the best salespeople survived and thrived.
Working for a financial advice company in that era demanded hard graft, long hours, steely determination and acceptance of a self-employed contract with no guaranteed income. Whilst this is clearly adrift of the financial planning profession today, we must acknowledge that to go from that environment to an excellent financial planner in 2020, these are people who have shown incredible adaptability and have gained their experience and wisdom across four decades.
If you ask them to compare themselves today to their former selves in the late 80’s, I would suggest they have progressed by light years and are unrecognisable from their former selves.
They have seen so much
As a result of the journey they have been on, there is a lot that we as the ‘NextGen’ can learn from the outgoing ‘LastGen’.
Here at boosst, Keith brings an unbelievable amount of wisdom, creativity and experience to our leadership team. He has supported clients through multiple recessions, seen house prices fall by 30% and defiantly kept clients invested through market downturns. Having seen every product provider sales tactic since 1987, he is blessed with a cynical side that can spot a false promise from a mile away. He brings a wise head to our leadership team meetings and adds remarkable intuition that guides the direction of our business and ensures we take measured risks whilst seeking a return on all spending.
If you have the opportunity to work alongside somebody like this, grasp it.
You may have boundless energy, enthusiasm and a new direction you want to take things, but I urge you to embrace the opportunity to work with the ‘LastGen’ – to understand their outlook and work together collaboratively. Your business will benefit from both views of the world and cognitive diversity amongst your decision-makers is bound to improve both your business and client outcomes.
If you do not work with somebody like this, go and find them.
They’re surprisingly easy to find – and very often willing to help. I was taught from a young age that the best way to learn is to socialise with the very best. Technology and social networks make people even more accessible today than ever before, but I would encourage you to go out and meet people face-to-face.
There is a growing range of financial planning conferences and I would encourage you to invest in yourself and attend a few each year (once it is safe to do so!). Set aside the conference programme and the speaker list – the real reason to attend is so you can bump into people at the check-in queue, have a chat in the coffee break, be sat next to new people at the gala dinner and have breakfast the next day with new faces at the hotel buffet.
Many of the best ‘LastGen’ planners I have encountered are keen to develop young people and ensure the profession is in a great place after they depart. Absorb all that you can. The ‘LastGen’ simply won’t be as accessible in five years’ time.
The Special Recipe
At boosst, we are very fortunate to have a ‘LastGen’ planner who wants the business to succeed beyond his own career. Keith cares about his clients, their children and the level of service their future generations will receive in the future. He is certainly not alone and over the last ten years I have met many other great financial planners like him, who are building businesses that play The Infinite Game. The combination of a forward-thinking ‘LastGen’ planner and a youthful NextGen team that share the same values is what I like to call the ‘special recipe’. Both ends of the spectrum have unique attributes to give and together they can carry the business onwards to greater heights.
I do not want our profession to lose these fantastically talented people – but equally they deserve to enjoy a long and happy retirement. Their numbers will slowly fade in our profession in the coming years and I urge you to embrace them whilst they are available, learn all that you can from them and wherever possible, work with them.