Many financial services groups in New York, New Jersey and Connecticut have programs for their membrs to connect with those in allied professions. But the Greater Hudson Valley and Westchester County (NY) chapters of the Financial Planning Associatiion (FPA) and the NYS Society of CPAs have taken this to a higher level, which raises all kinds of questions and challenges.
Talk To Each Other
Financial service professionals in Westchester County (NY) are setting in motion a vehicle for practitioners in all disciplines -- investments, estate planning, insurance, accounting and the law -- to come together in meaningful ways that can help themselves -- and their clients.
More and more these days, financial strategies have to be coordinated to provide maximum benefit for the client. When a client's investment advisor, insurance advisor, accountant and attorney never talk to each other, it can be counter-productive at best, disastrous at worst. The financial service industry needs to change the culture of turf battles, petty jealousies, compensation issues and fear of losing clients.
Both Marcia Kaplan, CFP®, CRPC (center in above photo), an advisor representing Ameriprise Financial and Robert Ecker, an attorney/CPA (right) had the same idea when they met with FPA Chapter President Mark Brownstein (left) on separate ocassions.
They wanted a formal and permanent vehicle for financial professionals to come together -- build relationships, share ideas and get/give referrals.
"Professionals work together when they know each other," said Kaplan.
"This is something we don't have and we need," said Ecker.
So an "inaugural event" was held last month at the Scarsdale Golf Club. It attracted nearly 100 professionals from all the financial disciplines.
"Next time we'll have 200," Ecker said confidently.
It's Who You Know
Befittingingly for the inaugural event, Kaplan and Ecker brought in a team from Fireball Network, a New York City coaching firm that teaches how to "build the relationships that will build your business."
They were Chief Strategy Officer Erik Dowling (left), Community Outreach Director Timothy Callahan (right) and Chief Networking Director Deena Baikowitz.
Dowling said it is "essential to have a team that collaborates with each other for the benefit of the client" and "baby boomers are forcing advisors to bring the right people to the table."
He told how he built his own network of 6,000 after a previous employer wouldn't pay the dues needed for him to join professional organizations. Thirty people showed up at his first event in a NYC restaurant; the second event attracted 150. Then he got a website and his network grew exponenteially.
Over the years, he's seen how "terrible" many people are at networking.
"They'll show up at an event, hang out at the bar and leave without getting a single business card." he said.
Dowling then reeled off a string of personal experiences to show how contacts made 3, 5, 10 years ago can one day pay off handsomely "if you keep in touch. You need to work at expanding your network."
Callahan emphasized the importance of having people of different professions in your network. "You don't use the same golf club at every hole. Pay attention to what's in your bag," he said.
Callahan also urged his listeners to get serious about "personal networking. Get involved with your children's after school activities, your community charities and those week-end running events."
Baikowitz concluded the session with networking exercises at each table where participants told about themselves in 60-second talks.
No Easy Road
These three professionals -- CPA Mark Leeds (l),Wins Property Inc.; Attorney Daniel Timins (c), Timins & LaMagna, White Plains and Financial Planner Anthony Leonardi, MBA, CFP®, CRPC(r), Sagemark Consulting, Rye Brook -- show the diversity that marked the inaugural event.
Throw in an insurance advisor and a banker and you have all the major financial disciplines that serve consumers in this age of highly complex tax, investment, legal and planning challenges and rules. Although the need for coordination is critical, it is woefully infrequent. Some would say non-existent.
Why is this?
Ed Drake, MSFP, CFP®, director of private client services at Wipfli Hewins of Minneapolis, MN, one of the nation's largest accounting and business consulting firms, described six reasons in a communique to clients.
1. Many advisors have specialized education and training in one financial discipline and know little about areas outside their specialty. Thus, they don't understand the reasoning behind recommendations from other advisors.
2. Success or failure for most financial advisors depends on how they use their time. The time to coordinate with other professionals is, or perceived to be, not billable.
3. Financial professionals are compensated under vastly different systems. Many investment advisors and virtually all insurance advisors are paid only if they sell a product, while attorneys and accountants bill on an hourly basis. This could be a deterent to cooperation. A commonly-cited example is the accountant or attorney reviewing a complex insurance policy for an hourly rate that pales in the face of the insurance agent's $20,000 commission. Conversely, the insurance agent could spend hours selling a policy that is ultimately rejected by the client on advice from the accountant or attorney.
4. The financial professions are constrained by different laws and regulations. Hence, practitioners often avoid coordination to avoid inadvertent legal obligations or unanticipated liability for providing advice in areas for which they are not trained.
5. At the same time, lines between the professions are becoming increasingly blurred. Investment advisors are preparing tax retrurnss; insurance agents are giving investment advice; accountants and bankers are selling insurance and attorneys are doing it all. This overlap of services can create distrust and fear of losing clients to another advisor in any coordination arrangement.
6. Finally, there is professional elitism that breeds distrust. For example, many accountants, attorneys and fee-only financial advisors view themselves as professionals providing purely objective advice. They distrust commission-based investment advisors, insurance agents and bankers. Anyone whose livelihood depends on selling products cannot possibly be objective, they argue.
Leaders of the cooperation/coordination movement in Westchester acknowledge these conditions, but believe the deterrents to their mission are waning.
"I think we can change the culture," said accountant/attorney Robert Ecker.
Celebrity On Board
Vern Hayden of Westport, CT, (r) a nationally-known financial advisor who served on the powerful CFP® Board of Standards and chaired the National Endowment for Financial Education, was among the notables at the cooperation/coordination inaugural event.
Here, he is briefed by FPA chapter president Mark Brownstein. Later, Hayden told FA Digital:
"This social gathering of allied professionals was a huge success. It facilitated effective networking and communication. If this same spirit translates to a team effort on behalf of clients, it will be a significant milestone in financial planning. The overlapping of egos must be subordinated and synthesized for the benefit of the clients who are the ultimate quarterbacks and decision-makers for their financial future.
Hayden, who has been active in financial planning circles for more than 40 years, conducts financial education programs for companies and charities and is a sought-after speaker at financial and industry conventions. He is a regular commentator on national news and financial TV programs. CNBC praised him as "one of the country's leading financial planners" and branded him "Mr. Mutual Fund." He is an author and contributor to the leading financial journals.
Hayden's firm, Hayden Wealth Management Group, already does much of what the Westchester event organizers are preaching. Its wide variety of services, ranging from investment and insurance management to estate planning and resolving money issues surrounding divorces, frequently require working with allied professionals.
Where It Goes From Here
The steering committee charged with getting some kind of alliance rolling and growing meets October 24. Its members are shown above, left to right:
1. Rodney H. Ertischek, attorney and CPA, Briarcliff Manor: (914) 762-5018; rodneyh@optonline.net
7. Mark G. Leeds, CFA, chief financial officer, Win Properties, Inc., Rye Brook; (914) 468-7300; mleeds@winprop.com
8. Mark Brownstein, regional field support manager, CPS Elite Advisors Insuance Services, LLC, Mamaroneck: (914) 752-4469 x108; mbrownstein@cpseainsurance.com
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