CFP Board conference explores multigenerational RIAs

Financial advisors can guide clients’ families toward their dreams, but they must first understand their role in driving difficult conversations about money and wealth.

And those discussions can take some surprising forms, according to speakers and a panel of planners at this week’s CFP Board Connections Conference in Chicago. 

For example, baby boomers currently control the most wealth, but many are trying to “make sure that the next generation is taken care of, without giving the foundation of having a conversation about the money,” according to Angie Ribuffo, the president of Anchorage, Alaska-based advisory practice Raion Financial Strategies. She shared the story of an 80-year-old client who saw a video on TikTok suggesting that viewers cash out their whole portfolio to go into gold and “asked me, luckily, what I thought about that.” Rather than dismissing the idea entirely, Ribuffo asked the client more questions about how she would handle the gold after acquiring it.

“I said, ‘I’m not trying to dissuade you from putting some of your assets in gold if you feel that is important,” Ribuffo said. “‘But let’s look at ways that you can do that that are going to be able to be managed, not digging it up in the backyard.’ And remember, I’m from Alaska, so there are eight months out of the year that she couldn’t even dig it up. So we didn’t even go there.”

The industry must address its succession challenges internally with founders handing over their businesses one day to lesser tenured advisors or acquiring firms and externally through engaging younger clients set to inherit and generate their own wealth. At its current rate of hiring, wealth management firms could fall behind the demand for comprehensive advice. 

Part of the solution will come from advisors’ own internal inspiration for their professional calling, according to Brett Danko, the founder and managing partner of Newtown, Pennsylvania-based registered investment advisory firm Main Street Financial Solutions and a trainer of aspiring planners with Danko Education.

“I see a lot of younger people here, which I love,” Danko said. “So your impact sets the tone and shapes the financial futures of your clients. Now you have to understand, it’s not just them, it’s not just your clients, it’s their children, it’s their grandchildren. I’m not good enough to say I can get you beyond that, but if I can do three generations, that’s pretty darn cool. It’s amazing, and it’s the greatest thing when you’re actually, truly helping people to realize their short-, mid- and long-term goals. And as we’ve been talking about, as our other speakers were saying, wait a minute, what are those goals? What are they trying to do? Not what we want. What do they want?”

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The difficult conversations

But those basic questions can prove complicated when there are so many issues tied into generational wealth. Sometimes, it amounts to “a tale of two haves,” said Charles Adi, the founder of Houston-based RIA firm Blueprint 360 and the moderator of the panel.

“You have some individuals who have accumulated a significant amount of wealth, who are in the baby boomer generation, but others who don’t have it,” Adi said. “You have the baby boomers who are supporting the millennial kids and even the grandchildren. So let’s talk about those conversations as the clients are coming to your office, whether they have or they don’t. How do you navigate that conversation to make sure that the person who is your client is taking care of themselves while still supporting their family, if necessary?”

And talk of supporting the family leads inevitably to aging and diminished capacity and the cost of long-term care. As older boomers tangle with, say, the changing rules of Medicare, their children may be struggling with how to assist them without having any insights from their parents about their wishes under the worst circumstances, according to Nicole Simpson, CEO and founder of Piscataway, New Jersey-based advisory practice Harvest Wealth Financial.

“When you have to take care of your parents at your peak earning years — these are our peak earning years — for those of us that are Gen Xers, it may have you lose a promotion because you can’t be in the networking meetings, or the meetings after the meetings or the opportunities that are found on a golf course or at a restaurant,” Simpson said. “You can’t come to the Connections Conference because you have to take care of your parents, and they need long-term care that they can no longer afford. This is the reality of where a Gen Xer may sit and see that the baby boomers may have been financially secure in their own mind, but they didn’t have a conversation about, ‘what if I live longer?'” 

That could come back to haunt many older clients who may be greeting younger advisors with a sense of skepticism, simply because of their age or tenure in the industry. Rosalyn Brown, the founder of consulting firm SowInclusive recalled her days starting out in the planning profession as a millennial.

“So I was learning, and I am managing the wealth of millionaires, and I would come home and talk to my parents — who were not millionaires — and they would question if I knew what I was talking about,” Brown said. “My mom would say, ‘Well, my co-worker said….’ And so it is a struggle, because honestly, if you are a baby boomer and your advisor is a baby boomer, they are also planning their exit, which depends on how long you plan on continuing to work. Your advisor may not still be working. So you may be sitting in front of someone like me, questioning if I know what I’m talking about.” 

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Combining the calling and the business

Navigating distrust represents only one of the challenges of connecting generations. Another aspect revolves around grasping the clients’ struggles, and planners have a vested interest in doing so beyond the moral obligation of helping them. 

The process will turn advisors into “better listeners,” as well as “better advisors and better humans,” said Jasmine Renae Ray, founder of Tulsa, Oklahoma-based advisory practice Bamboo Financial Partners. Her firm uses the word “partner” instead of “clients” to reflect the intertwined nature of the relationship.

“This isn’t just about being warm and fuzzy. It’s strategic,” Ray said. “Partners that feel seen, they stay longer with you in your practice. Partners that feel heard, they refer you more. And partners that feel like they’re a part of this process, they stay engaged and actually follow your plan, right? So this is how we build sustainable wealth, not just for our partners and ourselves. This is how we build it for our profession.”

Getting that right begs the need for advisors to do much more than generating alpha in investment portfolios. Manuel Ruiz, the founder of Short Hills, New Jersey-based RIA firm Compass Private Wealth Group, recalled the story of his father, who died in 2021 after being “my superhero” as a loving father and innovative entrepreneur who built a small chain of successful tire shops and subsequently moved into real estate investments, Ruiz said. 

For his father, building a legacy for the future “was the most important thing,” Ruiz said. “If there’s one thing you walk away with today, one thing, it’s please understand your client’s ‘why.’ They’ll be so much better off for it.”