Mark Tibergien is the Chief Executive Officer of Advisor Solutions at BNY Mellon | Pershing. He is also a member of Pershing’s Executive Committee and a member of BNY Mellon’s Diversity & Inclusion Advisory Council to the CEO. In 2019, Mark was named to the inaugural Asset Management Advisory Committee, formed by the Securities and Exchange Commission, to provide diverse perspectives on the needs of retail investors and market participants.

This discussion with Mark is a real deep-dive into his decades of experience in the world of financial planning, how he has seen the business grow and change in many ways over the course of his career, and the power of reverse mentoring in a firm. I am so excited to share his wisdom with you, so let’s dive in!

The evolution of career paths within financial planning

Sitting down with Mark, I first asked him to share his view on the evolution of the career path within financial planning. 

He shares that, when he first started, it was primarily an investment-forward profession. Over time, Mark has watched as it’s transformed into a more planning-forward profession, and he estimates that it will transform into an experience-forward one as time goes on. What does that mean? That consumers will emphasize (and value) the experience of financial planning even more. The great news about this — at least in the United States, Mark says — is that advisors are starting to put more effort into how they can transform the lives of their clients.

As a result, Mark explained, new career paths are starting to emerge. Before, career paths were based on the level of production a planner could provide. You’d transition from a rookie broker to an assistant vice-president, from a vice president to a director and then to a managing director. Each time you moved up, it just meant you were moving to a higher level of revenue generation. 

Career paths now mean more in the world of financial planning. It’s truly more about what the advisor does to master each level of the business and the meaning behind it.

Embracing the stages of your career

Mark also made a case throughout our interview about the path a new planner chooses. When a young financial planner understands that they have the power to create their own individual reputation, they’re on the right path. Mark urges young financial planners to take control of their own career decisions in a conscious way, as if they are developing their own brand. 

Where do you want to go? What do you want to accomplish? These are thought-provoking questions young planners should be asking themselves when starting out, and repeatedly throughout their careers.

After hearing Mark speak the night before at our FPA conference on career paths and his work with the CFP Board, I asked him to elaborate on one of his points; the most overlooked career stage within financial planning.

If those new to the profession were properly supported during this stage, Mark says, they would realize that they are not only growing in their profession but also growing into an empathetic human who will be handling clients and planning issues. Curious about what that stage is?? Tune in to the full episode.

Elevating financial planning into a true profession

In this episode, Mark and I talk about education and how it should be used to continue to elevate the profession. If the barrier to entry is too low, Mark believes the quality of work provided within the profession will begin to slip.

He also made a great point about the language our clients use, and how small tweaks can make a huge difference. Switching up the language from “I am working with an advisor” to saying “I am working with a financial planner” could be key to elevating the profession. 

We should also be focusing on representing multiple generations and demographics, as well. Financial planners aren’t just middle-aged white men. There are plenty of women, people of color, and people of different faiths who comprise this profession — and there’s always room for more.

Mark also made a great point: We, as professionals in the financial planning community, need to advocate for ourselves and our profession. Basically, we should be financial planning missionaries, spreading the word about this work and its impact. As Mark explained, we need to fully demonstrate how we are impacting the lives of others, helping them navigate their life choices, and transforming their economic freedom.

Reverse mentoring and final advice 

Last but not least, Mark and I talked about the value of mentoring. He has a unique perspective on it and shared how “reverse” mentoring should be part of our vernacular within the profession. 

“One of my fellow partners at Pershing saw that, as we were sitting around the executive committee, it was mostly middle-aged, mostly male.” This observation led the firm to an idea that could be transformative in creating real employee engagement and change: the idea of reverse mentoring.

The very first pilot reverse mentoring program was held by members of the executive committee. They were assigned a reverse mentor after a vetting process, and those pairs met once a month to talk about issues and learn from each other. Those discussions and the solutions they brainstormed would then lead to recommendations to the board.

Mark tells me that the reverse mentoring program was “One of the most enlightening experiences of my life. I’ve always considered myself to be a listener and empathetic, but sometimes you take things for granted.”

Final pieces of advice from Mark

When I asked Mark for any final bits of wisdom and advice he would like to pass on to new financial planners, he was excited to contribute. He talked about the importance of finding your own career path and of coming to every interview with questions. He also calls each of us to learn from each other and to encourage people to share their insights. It’s the only way to make the profession better.

But my main takeaway from my time with Mark is that our field has some growing to do in multiple areas. We’re already so strong, but there’s always room for improvement. We, as NexGen financial planners, need to help others see that this is a career worth signing up for. That the potential to help others and to generate revenue at the same time is actually possible I think that’s quite the mission, and this chat with Mark got me excited to get to work.



[tweet_box design=”box_10″ url=”” float=”none” excerpt=”I think we tend to underestimate our own impact on organizations, and that aversion to responsibility is a really curious trait. – Mark Tibergien on #YAFPNW”]I think we tend to underestimate our own impact on organizations, and that aversion to responsibility is a really curious trait. – Mark Tibergien on #YAFPNW 185[/tweet_box]


What You’ll Learn:

  • The evolution of the career path within financial planning
  • The most overlooked career stage in the profession
  • The importance of developing young financial planners
  • How to choose the correct firm to partner with
  • The correlation between language and elevating the profession
  • The variety of ways you can start your career
  • The power of reverse mentoring 
  • Why you should walk into interviews with answers and questions


Show Notes:

In this episode of YAFPNW, I talk to Mark Tibergien about:


Stay up to date with Mark Tibergien by following him on social media!


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Episode Transcript

Hannah: Well, we are here at FPA’s annual conference, and I have Mark Tibergien here. You’re Pershing Advisor Solutions CEO. Is that …?

Mark: That’s correct.

Hannah: On your session last night, you were talking about career paths and the work that you’ve been doing with the CFP Board. You’ve been around more than probably most of the listeners on this podcast. How have you seen career paths evolve within the financial planning profession?

Mark: That’s a great question. Thanks, Hannah, for having me on your program. This profession has evolved in so many ways. When I started back when the Buttonwood Agreement was signed, this was primarily an investment-forward business, and I think over the last 20 years, it emerged to a more planning-forward business, and now as we look forward, it’s going to be more of an experience-forward business, meaning people will emphasize the experience even more. The good news, at least in the United States, is that planning has become core to the way in which advisors think about how they can transform the lives of their clients. And the reason it isn’t as much of an emphasis on investing anymore as it is an emphasis on financial choices really makes us a very powerful career opportunity for other people.

Hannah: It’s interesting. You talk about that shift from investments to planning, and you have a much broader perspective because of your role. Do you see the majority of investment shops moving towards financial planning? How do you see kind of … Have we gotten there where financial planning has been adopted by much of the industry and profession?

Mark: It’s a struggle, to be perfectly honest. I think that people follow their DNA, and for those who are more investment oriented, they tend to look at financial planning as a value add, but those who come with a planning orientation think of it as value, not as an add, and this is a critical discipline that people think about. I also think that many people contemplate this notion of financial planning as a means to generate a deeper relationship or to get share of wallet or do with those other things. And so if there isn’t that true motivation around what planning is as a process, then a number of firms won’t do it.

Mark: That said, I think that many people from the very large brokerage firms to the insurance companies to the smaller firms are recognizing that this is what clients want is a guide, they want a Sherpa. And certainly early in somebody’s lifecycle, it couldn’t be about investing at all, because they don’t have assets. What they have is the opportunity to accumulate, and that’s where a financial planner really plays a part.

Hannah: One of the conversations I had here was with a gentleman from Australia, and they’ve seen a shift away from commissions and AUM much more to a fee-for-service or financial planning fee. Do you see that trend, obviously not as extreme because of the regulatory environment there, but do you see a trend going away from investment management fees to financial planning fees, or do you think that investment management fees will always be there?

Mark: There is a big difference between what is an obvious choice and what is an impediment to transformation. So it would seem logical that you would pay for the value you’re being delivered and for whatever services there. Yet the profession is so tied to asset management fees that it’s really difficult to see this trend happening anytime soon. In fact, this is the only business I know where the client pays for the value they bring, not the value the provider brings, and so this is a real dilemma in the business.

Mark: The economics, however, of charging on an asset management fee also make it difficult for people to make the change, especially in the up-market like we’ve seen today. That said, according to our studies, roughly 30% of RIAs at least charge a fee other than an asset management fee. It might be a retainer or a project or even an hourly rate fee in some cases, and it wouldn’t surprise me to see many move to a subscription model eventually. But that’s not here today, and it probably won’t happen for at least another five years, and whatever occurs in the marketplace might dictate that.

Hannah: And so when you say whatever occurs in the marketplace, so if like a market decline, is that what you’re meaning, and how would you see that impacting?

Mark: I think a market cataclysm of some sort could transform the way in which people provide advice. I think new entrants into the market, so from a competitive standpoint it could totally disrupt it, much like we’re seeing no commissions now among custodians as being a disruptor, and we can talk about that if you’d like. There are elements of disruption that occur. I think the third thing is that the demographics of the client base may be demanding a change. And so this is still fundamentally a business built around boomers, both in terms of those practicing and those absorbing the services, but as they leave the landscape, and more people are saying, “Prove to me your value,” I think that others will come up with that idea.

Hannah: So your presentation last night was on career paths. Have there always been career paths within financial planning or the investment world, or are they really getting developed and formed now? What’s been the history? How long has this conversation been going on?

Mark: Career paths the way that it’s emerging is a relatively new phenomenon. Career paths in the past were based on your level of production. So you might move from a rookie broker to an assistant vice-president to a vice-president to a director to a managing director. It wasn’t literally a career path, though, it was more a badge of honor that you were moving to a higher level of revenue generation, and that’s what people would value. So when we talk about career paths now as we did last night, the whole notion is what do you master at each level, and how do we train to that, and how do we recognize that you’ve accomplished something at each level, so that we can move you up, both in terms of responsibility and impact on the business. That’s a major difference in the thinking.

Hannah: What are the different stages that you see in a career path? And obviously, there’s more than one path.

Mark: Well, it depends if your course is going to be to be a financial advisor, to be an operations person, or ultimately to be the leader and manager of a business, but let’s assume for a minute that your ambition is to be a practicing financial planner. It is quite clear that if we can establish five rungs of the ladder that within each rung there’s movement. So it could take, for example, in the first run, which would be an analyst, that your job is to master the job, and for some people they can do that in six months, in other cases it might take three years.

Mark: So this is knowing the technology, knowing the planning process, becoming a CFP, not that immediately, but at least studying for the CFP, really learning how the business works and how the process works and all of those elements. So the sooner one can absorb that information, they can move to that next level, which is a para-planner, let’s say, for the terminology. Generally speaking, it’s going to take someone between 8 and 12 years to be fully baked as a prospective partner of an advisory firm, but each of those stages, at least in the five rungs, become clear over time.

Hannah: And so last night you were talking about one of the most overlooked career stages in that kind of rung. Can you talk more about that, and why it’s so critical to the development of a financial planner?

Mark: Yeah, the overlooked stage that I referred to was the service advisor, so that’s the third run of the ladder. The reason this is important is because most founders of financial planning firms have grown their business out of survival. They just built their networks and generated business in order to survive, and then momentum carried them to be in many cases quite substantial and quite wealthy themselves and quite fortunate having built a business of value.

Mark: The challenge for them is that when they recruit young people in the business, they don’t really focus on the development of those individuals, and one of two mistakes happen. Either one, they say from the beginning, you have to go find clients, and that’s not likely to happen for somebody fresh out of university. Or two, they put them in a service role, in a planning role, and assume that they’re a technician for the rest of their life. But if properly developed, what happens in that an individual realizes that they are growing as a profession much like they would a lawyer or an accountant, and part of their responsibility is not only to be a great technician and a great empathetic human dealing with clients and planning issues, but also a meaningful part of the community and the business where they can drive revenue into it.

Mark: So the service advisor role is not only training people how to be a leader of client relationships, but how to recognize and ultimately develop new client relationships for the firm. It’s not in the same vein as the old “Get a phone book, and start to sell,” but it’s in the notion of “You have to be present in the marketplace in order for new business to come to you.” That’s a responsibility for anybody who wants to be a partner in the firm.

Hannah: It brings an interesting question along the lines of ownership, especially with younger planners or newer planners really. You say it’s a responsibility of everybody in the firm to help bring in business to the firm. Should people be compensated when they bring in that business? How do you view that?

Mark: It’s a great question. If you assume that compensation is important for driving behavior, then I guess some firms would do it. I happen to think otherwise. It’s never been proven in my mind that money motivates. Money can de-motivate. The reality is that creating an environment where motivated people can flourish is a bigger driver, and so if you just recognize that being responsible for attracting business is part of your responsibility based on your role and relationship, then separate compensation may not be necessary, because you’ll get your reward in other ways. Your compensation will continue to rise. Some firms would actually presume that you have to be coin operated in order to do the right thing, and I just don’t believe that. If you’re a practicing professional within a firm, then you should know that you have a responsibility as part of the team.

Mark: The second part I would make is that it’s rare, frankly, that an advisor or an individual brings in business on his or her own effort. Usually, it’s part of a team. Could be because the firm has developed a brand, because the firm delivers an incredible experience, that you operate as an ensemble or as a team anyhow, and so the notion of one person getting compensated for a new client coming in seems to not recognize the value of the entire enterprise.

Hannah: Often in my mind, and perhaps I’m being naïve on this, is then once you start bringing in clients, that’s when the ownership conversation kind of gets to the table, and so you’re saying that’s really not necessarily correlated. At what point do you transition from being an employee to an owner? What do you need to have developed before you can be having that conversation?

Mark: In the well managed firms, the definition of success within a partnership, it becomes quite clear. So two things have to happen. The first thing is that the firm has to be of a size where they can justify dilution of ownership. So this threshold is the firm big enough to afford to add another partner is a question that’s overlooked. Another reason why you have to think about growing the business. The second is do you have all of the qualities that we look for in an owner? This is important that we think about things like are they technically able, do they add value to the culture, do they demonstrate passion and integrity, are they impacting the lives of others and developing other people within the firm, are they accountable, do they demonstrate the behaviors that are there?

Mark: I think oftentimes people come in the business and look at partnership, and they say, “Well, I have these credentials, and I’ve been in business this long, so it’s now time to be partner.” That would be like saying, “Well, I’ve implemented a financial plan, and I’ve saved a lot of money, so I’m now financially independent.” There’s more to that definition than just having experience and credentials that would qualify you to be a partner.

Hannah: It’s interesting, because I’ve been hearing in some of my peer-to-peer conversations, people at firms where people are being brought on as partners because they’ve checked off all the boxes of the career path, but maybe they’re not … They’re finding that it’s more just checking off the boxes that’s needed.

Mark: Yeah. I think that one thing that people realize is that individuals who have a toxic personality may have the ability to check off all the boxes, but they could actually have a negative impact on the enterprise if they’re brought on as partner. And that is a tradition in the business is that we’ve tended to ignore bad behavior if people are performing in the business world the way they want. I just don’t think that’s a very prudent way in which to build an enduring business, as a way to think about it. So yes, certain boxes have to be checked, including the ones that really demonstrate how people think about making this a business to last, not just how to recognize your individual contribution.

Hannah: What is that size that you see as best practice before you’re diluting too much of that ownership?

Mark: It’s unique to the firm. There’s a big difference between having a firm in Wichita versus Manhattan, and just the cost of doing business is different, not that there’s anything superior or inferior about either one, but just that cost is a factor. So I’ll give you an example of how I experienced it when I was a principle in an accounting firm. When I sold my consulting firm to Moss Adams, there were about 75 partners in Moss Adams, and the average revenue per partner was around $700,000. When I left, the firm had about 320 partners, and the average revenue per partner was about $1.5 million. So from an executive committee standpoint, what you’re looking at is are you generating enough revenue per partner or profit per partner, revenue per client, profit for client in order to make sense of this.

Mark: So the benchmarking study that Pershing sponsors that’s produced by Investment News has this data in there that advisory firms look at very closely to see how they’re tracking relative to their peers and whether they’re showing real growth. Now, one of the things that we recognize is many firms have delusions of greatness, because the market has given them great lift in terms of their revenue and assets. The reality is that it’s the market that’s doing it. Organically, it’s not happening. So you have to sort of understand those dynamics to know whether you can get to it.

Mark: So I think that one of the first questions that an advisory firm would have to think about is “What is my revenue per partner now, and at what level do I have to be to minimize the impact of dilution on my ownership by admitting another partner?” And so you can set growth targets based on that.

Hannah: So as young planners and new planners are stepping into these firms, what are characteristics that would indicate that they should maybe not become partners of these firms?

Mark: Well, that’s a great question. There’s several things that I would say dictate individual thresholds. So the first qualification I would say is financial contribution. That’s not just how much business they bring in, but how much business they manage or, put another way, how much of the business they manage. So they might be having a management role that could be there. The second would be their impact on the development of other talent in the firm. I have a general philosophy that if you haven’t trained your replacement, then I can’t possibly move you on, because now I have a gap in two places, and I’ve got to think about that. So to what extent are you developing other people and really ensuring that the firm will continue, and you’re functionally training your replacement.

Mark: The third is how are you demonstrating technical competence? Are you continuing to learn and master your profession and committing to understanding more and becoming more disciplined around complex situations that becomes it. And then the fourth component that’s core to this is whether or not you are additive to the culture. So do people like you, do they like working with you, are you demonstrating responsibility? Do clients seem to respect the way in which you do things? So at a minimum, those would be four things that I would tend to look at.

Hannah: Planners who’ve been in the business 7, 10 years are getting offered ownership in these firms, and they’re looking around. It’s not just one or two owners, it’s many owners, and it’s a really interesting conversation where not everybody wants to be an owner. Can you still have a viable and vibrant career path without taking on ownership?

Mark: The answer is yes, you can, but I think that there are other questions that you want to get into. Why is ownership so unappealing? What is behind that? To me, it’s a real question as to how people perceive success, and it may be a lifestyle choice or it may be a lifestyle circumstance that is saying, “I just don’t want that commitment.” But I think people assume that becoming an owner means that you’re going to have to work twice as hard as you do now, and perhaps the reward isn’t there. If that’s the case, then that’s a firm that is probably dysfunctional. That good partnerships create operating leverage by pushing work down to other people.

Mark: The second part of this, though, is you may choose to be a cog in the wheel and not the wheel. There shouldn’t be any judgment about that, but there also shouldn’t be any expectation that your compensation is going to increase materially, because there becomes an expense tied to people who are the cog. I want people to be seen as an asset in which you get a return and not a cost to be managed, but there comes a point when we say, “You know, you have a physical limit to how much work you can do as an individual contributor to the business. We can’t generate enough revenue with what you’re doing, and there comes a point where it’s getting too expensive, that your income just can’t rise at that level.” So I worry about whether or not people will be fulfilled recognizing those limitations.

Hannah: Well, and I know one that just the fear of the commitment of becoming an owner of the firm. They feel like their career is now tied to that firm, which I guess it …

Mark: It’s true.

Hannah: It’s kind of true. It’s what they want.

Mark: Yeah. It’s a fascinating subject. I hear it often as well, and I’m just curious what’s behind that. I think that we have … All of us are subject to this, but I think we tend to underestimate our own impact on organizations, and that aversion to responsibility is a really curious trait. I don’t want to call it a quality. It’s a really curious trait. And I think sometimes we just have to look inside ourselves, and say, “What got us to this point that we don’t want to have any responsibility or obligation to the business or the people we work with?” You should have a psychologist on here to answer that question, but I find it a really curious thing.

Hannah: It’s interesting. The other thing that I’ve heard from people is just from a risk management standpoint. They’re like, “My salary is coming from them, and now we’re having to invest the extra income back into it instead of their portfolio.” But again, that’s a business owner risk, right? That’s what it means to …

Mark: True, but if you’re doing this properly, you’re not just having a concentrated investment. You’re diversifying outside of the business. I can use my own example. A substantial portion of my compensation comes in stock in Bank of New York, which is our parent company, but the amount of the bonus is also dictated by the performance of Bank of New York as a company, and my job is there at Bank of New York, so it’s concentrated, but most of my wealth is not within Bank of New York. It’s outside of it. Financial planners are advising business owners and business executives all the time, and they’re saying, “Reduce your concentration and think about how you manage it.” I just find it curious that people don’t apply the same discipline to their own lives and how they manage for financial independence.

Mark: The other part of it is that, especially in closely held businesses, but it could be true in any type of enterprise, you have a reward for labor, and you have a reward for ownership. When you are getting a reward for ownership, that means you’re getting true operating leverage is that you’re making money off of other people’s labor. And I don’t want to make that sound as a pejorative, but that’s the truth of business ownership. Imagine the greatness of that is you invest in a business, and you get a multiple of your own hours in return. And what you can do with that is quite incredible. Even if you’re not coin operated, even if money is not your driver, the fact is that if curing the world’s ills is your driver, imagine what you could do if you had a greater pocketbook to impact that. It’s a means to an end.

Hannah: So how do you see these investment firms? We’re at 2019 right now. I hear some people talk about mass consolidation. I hear some people talk about we look at places like the XYPN where you having a thousand members now, a thousand of these solo practitioner, almost micro-firms. What do you see as the trend for financial planning and investment management in this regard?

Mark: Well, I think that you’re recognizing that there’s several models that are occurring, and I think that the XY Planning network is a good example of somewhat of a franchise model, because there are literally scores of financial planners who don’t want to work with other people, and sometimes it’s not coincidence that the feelings are reciprocated. But that’s a choice you make. I think other people would like to be in a larger organization that provides access to resources and opportunity to build wealth inside of a business, that can be critical, and there’s also that social aspect that is driven by it, so I think that there will continue to be consolidation.

Mark: This fundamentally is a profession comprised of small businesses. Even a practice with a billion dollars of assets is only generating $8 to $10 million of revenue. The SBA defines a small service business as anything under $100 million of revenue and a thousand employees, so that’s just about every financial planning practice in the country. I think consolidation is inevitable, because the founders of these firms haven’t adequately prepared for their succession, and clients are going to be left looking for someone else if they don’t deal with that question.

Mark: I think that the economics of scale argue for some degree of consolidation. I’m not suggesting every firm has to be $100 million, but I think you want to be of a size where you can invest in your growth and in your expertise and your development and your training of people. And ultimately, I think that the winning financial planning firms are those that position themselves as employers of choice, and you can only do that with momentum. If you don’t have it, then every hire you make will be accidental, not strategic, and you’re going to have more losses than wins in the process.

Hannah: And you say momentum, I hear you’re getting new business, new clients, but I think maybe you mean something broader than that.

Mark: Momentum has many elements to it, and this is why I put such an emphasis on critical mass, is that when you’re of a size … So an example of critical mass would be if you have redundancy at every position, if you are growing at a rate faster than the GDP, and if you are generating operating profitability after compensation, all expenses, in the range of 25%, you’re probably at critical mass as a business. A couple of points there. One is you always have a backup plan if somebody goes down, and people go down. They retire, they die, they get sick, there are any number of things that cause people to disappear. You don’t want to miss beat as a firm going through that.

Mark: Second, if you’re not keeping pace with the growth in the economy, chances are you’re not keeping pace with the de-accumulation of your clients in their assets and in their lives, and that becomes an issue. So the momentum is how do you continue to keep those metrics in mind as you’re driving growth that says, “Looking forward, I have to understand what I want to deliver to my clients, build an infrastructure to support it, and maintain a level of growth that allows me to sustain it.” That’s what you’re functionally saying.

Hannah: And there are going to be consolidations, but there’s going to still could be a variety of different types of firms within the marketplace.

Mark: Yeah.

Hannah: You don’t see that.

Mark: I think if everybody becomes the same kind of firm, then this is just Stepford Wives. I think people have to have a unique proposition how they’re building the business. I think the region of the country or the community in which they’re in will define that. The types of clients you’re serving will define that. Not everybody’s serving the ultra-rich or the mass affluent. I think how you define the client experience will dictate that. I’m a little bit concerned with the nature of consolidation, however, in that I think that much of the consolidation is only about the transaction and not about the relationship. So if I were to define success in the consolidation model, it would be firms that know what your two and your three are going to look like, and what full synergy and integration appears to be once that deal’s fully consummated and integrated. That is going to define success. We don’t really have examples of that yet.

Hannah: Here at FPA, their primary aim is to help elevate the profession that transforms lives through the power of financial planning. I’m curious what do you see as the biggest challenges of really elevating financial planning to a true profession?

Mark: Part of it is that we have to continue to elevate the level of training and education, I think, particularly in the RIA side, that I think the ease of entry is too low, and I think we have to raise the barrier a little bit higher, and I think not just to be a CFP, but also to be registered as an investment advisor. I think that that’s something we have to think about. Two, as a profession, we have to get to critical mass that people say, “I am working with a financial planner.” Not that I’m working with an advisor, who could in fact be something other than an advisor. It’s just a nomenclature people use. I’d like to see more purity in the terminology than exists today.

Mark: I think three, we do have to replenish the profession with relevant generations of people, but also other relevant demographics. This notion of attracting more people to the business, more women, more people of color, more faiths, all of these elements really become important because they’re extensions of the communities in which they live. If you’ve never seen anybody in your community who’s practiced in this business you’ll never think about it as a valuable resource. So as an industry, it’s a mandate that we address this question in real terms.

Mark: The flip side of it is that we need to have more missionaries, if you will, in the planning profession, who are really speaking about the power of transformation. When you use that slogan or that phrase about what defines the FPA, I’d like to see how that is implemented. How do we demonstrate that we are truly impacting the lives of others, and how do we tell the story in a way that says it’s not about whether or not you get a better return this year or last, but it’s about you’ve helped people navigate their life choices and truly transformed their economic freedom from where they were before.

Mark: I would take a look at churches that have been successful in recruiting new parishioners, and say, “There’s something about the spiritual message that works,” because somehow people feel transformed or enlightened or saved by what they do, and it may seem hokey, but there are real concepts that we can look to the outside world and say, “It relates to what we do.” And the good news is that if we’re successful, many more lives will be transformed.

Mark: I’d like to add, though, I think we are beginning this process way too late. I think that our failure to successfully implement financial literacy at the elementary school, middle school, and high school level is a tragedy for our country. Way too many people are retiring and are wholly or mostly dependent on Social Security, and that tells us as a country, as the largest economy in the world, that we have failed in so many ways, and that’s a big one.

Hannah: Well, I know that’s a passion of yours is that financial education and that literacy.

Mark: It is. I sponsored my former high school in the upper peninsula of Michigan, a little town called Gladstone, 5,000 people. It’s not a big economy. It’s a typical Midwest little town, and it’s now the only K-12 financial literacy program in the entire State of Michigan, and the teacher who is the leading the program today has taught other teachers, and they do the summer camp for little kids, and I get these amazing notes from the kids and their parents, saying how cool this was.

Mark: I have examples of kids who never thought of finance as a possible career choice and now are actually studying personal finance at university to decide to come into the career. So I’m living and breathing it, and it affects me emotionally when I see the transformation that we can have on people’s lives. From my own standpoint, I know I can’t change the world, but I can change a life. I think if every member of the FPA took that attitude, this would be a real game changer for our business.

Hannah: I remember hearing somebody say once, “If every CFP would bring in one more CFP, the impact of that …” So one of the things that you said and one of our challenges as a profession was that you said that we need to raise the bar, and the entry, getting into it, is almost too easy. And so I’m curious to hear more about that, because I don’t usually hear that.

Mark: Well, I think that if people choose to start their own business, there are easy ways to do it. I think once you have your CFP, the demand for people with the designation is extraordinarily high. I think that people are looking for jobs. If they’re open to possibilities will have no trouble getting hired by somebody. So that’s the good news. I think the ease of entry to be hired is relatively simple. The issue that I’m talking about is the ease with which people can establish their own firms. Obviously, there’s some cost, there’s some cashflow that you have to think about, but just getting your registration in and setting up your business is relatively easy, and frankly, if you’re a solo practitioner in those cases, you’re acting not only as the lead advisor, but the Chief Compliance Officer and the Chief Risk Manager within the business, and so that worries, because you don’t know all the people who are coming in and what that means for the business.

Mark: So if you looked at other professions, like becoming an accountant or becoming an attorney or becoming a doctor, and you’re setting up your own practice, there still are standards of excellence that we have to be conscious of that I think we should begin mirroring when we look at it. I’d also like to have us think about the business side of financial planning a little bit more. It continues to disappoint me that a practice management doesn’t receive accreditation. There are programs around this conference where I say, “My God. That’s really valuable. How come they’re not getting any CE for participation in those things when they’re as critical to the endurance of a firm as anything.” And so emphasizing that the business of financial advice as well as the practice of financial advice is going to be critical to our future as a business.

Hannah: One of the things that’s been really interesting is when you get audited or when you, either whether that’s within your broker-dealer or within your firms or by the State or SCC, rarely do they ask questions about financial planning, of what your assumptions are built into, or how they’re doing things. Is that part of what you’re talking about, raising that bar, those standards of care?

Mark: That’s a good example. I think that the regulators tend to focus on products, they don’t tend to focus on process, and I think that’s a really classic example of how we think about the business today. As an example, in the UK there’s new regulation that will cause firms to think about the emotional health of financial professionals within the firm in that managers are responsible for monitoring that. That’s a very powerful and insightful way to think about our responsibility goes way beyond the product and more towards the way in which people are functioning in their daily lives. So I would love to see us really think about those elements in greater terms.

Mark: Obviously in financial planning, it’s a series of judgments. There are elements that are standardized, like the document collection, and the analysis can be it, but the notion of delivering real wisdom and prudent advice not tied to product is subject to a lot of tests that we need to consider. How often, for example, do we see people impose their own values on the way in which you deliver advice. I heard a speaker earlier today, talked about “Do any of you have any big spenders for clients?” And it was clearly a judgment that if people are big spenders that somehow they’re living a double life or a bad life, but maybe that’s their whole reason for making money is to achieve fulfillment in some other way, so why judge, unless it’s egregious, but those are good examples of that.

Hannah: The RIA basically gets a lot of attention, but there’s big players out there outside of the RIA space, like the independent broker-dealers, the wire houses. How do you see the trends? Is business, our planners, moving more towards that RIA space, or where do you see the flow within the financial planning profession?

Mark: To give you some context for this, so BNY Mellon is the largest custodian in the world, so $35 trillion of assets. We, in fact, are the custodian to the financial services industry.

Hannah: You’re not one of the small businesses.

Mark: We’re not one of the small businesses, but the point is that we touch almost every financial service firm in this country and in many other countries. We see all the business models, and they’re all our clients, even our competitors are our clients. From our point of view, we tend to be agnostic about the business model, and we would prefer that people were not derogatory about other business models, because they’re providing a service in other ways. That said, we know that there are 1,400 fewer broker-dealers today than there were in 2010, and the number of new RIAs that are being created is in the 600, 700 range every year. So I think that indicates to you that there’s movement there.

Mark: We also see client assets moving in that direction. The RIA segment has grown $3 trillion over the last four years, which is pretty significant, so it’s about a $7 trillion profession. That said, the broker-dealers that continue to reinvent are saying, “My business has changed from a product sale business to a planning oriented business,” and their corporate RIAs, the fiduciary business models that they support, are also growing exponentially. We know that having this approach to the business is really oftentimes market driven, and the good news is that the broker-dealers and the insurance companies that perceive that they’re delivering value to their clients are adapting to the change. Some of it is a little light, but the fact that they’re adapting recognizes that there’s a market to be had.

Mark: I think what we’re seeing is less emphasis on professional selling and more emphasis on professional buying, meaning that it isn’t so much being a product advocate as being a client advocate. That’s generally good for the industry and for the profession of financial planning, and there are advantages in both cases as to which model you want to affiliate with.

Hannah: You talk about all of the different places you can start your career, wire houses, BDs, RIAs, and there’s even more than that. All of these places are developing all these career paths, right? This seems to be an across-the-board theme.

Mark: Yes. I think that’s true, and I think also for individuals, they shouldn’t assume that it’s a life sentence once they get hired. I’ve had seven careers, and I know a lot of other people who have moved around in doing different things. So you have to say what is my goal, what do I want to accomplish with this particular phase of my life? And if it’s mastering the job, finding the right firm that’s committed to doing that, would be a good decision to make.

Mark: People who are open to bringing on new people and training and developing them is a great thing, and if you say, “You know, that was so good I’m going to stay,” fantastic. If it wasn’t so good, then feel free to move on. Having the ability to establish your own individual reputation is actually a good talent strategy for yourself. You’ve got to take control of your destiny, not in a selfish way, but be conscious that you’re developing your own personal brand, and what does that look like?

Hannah: Several years ago, I saw your name in the news, and I was very interested in this idea of reverse mentoring that your firm at Pershing had started, and we’ve had Kayla Kennelly, who is part of that program, on the podcast before, but I’m curious to hear your perspective of, first of all, what is reverse mentoring, and then how did that get started at Pershing?

Mark: The concept of reverse mentoring goes back a number of years. I think GE may have been the first company to do it, and many people have talked about it. What happened was … I don’t recall what year, but one of my fellow partners at Pershing saw that, as we were sitting around the executive committee, it was mostly middle-aged, mostly male, we had a couple of women around the EC, and most of the people have shared experiences about the industry and what we’re doing. And this was also a time of transition for our company, and so he, on his own initiative, brought together a couple of his key employees, Kayla being one of them, JamiLynn Cimino being the other, and said, “Let’s come up with an idea that could be transformative to how we create real employee engagement and transformation for the business.”

Mark: And so they introduced the idea of reverse mentoring, and the pilot was with members of the executive committee, where they were going to assign a reverse mentor to them. The reverse mentors were selected, there was a vetting process as to who could qualify to do it, and the understanding was that after the reverse mentors met with the mentees, the older executives, that they were going to meet once a month, talk about the issues, and see what else they want to learn, and out of that would come recommendations to the board.

Mark: From my standpoint, it’s one of the most enlightening experiences of my life. I’ve always considered myself to be a listener and empathetic, but sometimes you take things for granted. And so Kayla was my first reverse mentor. I’ve had four. And we don’t have it a perpetual relationship, so every 12 to 18 months, it rotates, and it’s important that they not work for you, that they are accountable or reporting to someone else, so that you don’t create any conflict.

Mark: So Kayla went through a process with me where she created a list of possibilities of what we might talk about, and what we agreed is that technology was not one of the things I wanted to be mentored on. It’s not that I’m a master technologist, but that was not the power of the relationship. The power of the relationship is, “Kayla, what are you thinking? What are you feeling? What are your friends observing? What should I know about your peers and the career choices they’re making or the business choices or the personal financial choices they’re making?” And it was the ability to get insight from individuals in a way that I wouldn’t normally have a conversation.

Mark: And some people say I get the benefit of that for my children, but it’s still a different conversation. And at this discipline meeting where we’d have this idea I think is one reason why we’ve grown so dramatically. Pershing since 2010 has grown a trillion dollars of assets, and so you’ve got to say, “Well, something worked,” and I think that reverse mentoring was part of it.

Hannah: Well, it’s interesting, because you said that this was, when it was pitched, it was very much a view this “Could this be a transformational element for the firm,” and so you think that it has been.

Mark: I think it was a real gut-check on all of us who may have had bias or judgment about things without really asking the question, and I think when you have somebody like Kayla, saying, “You know, I think that’s BS. Well, I think there’s another …” And having the permission to say it is very powerful, and it checks you instead of just plowing through with something is that when somebody can say honestly that “I disagree with you,” or “Would you consider this approach,” it’s a very refreshing and stimulating way to think about the business.

Hannah: So a lot of your assumptions, you said, were challenged. I’m curious what did you learn through that process?

Mark: Several things I learned, first among them would be the way in which to communicate. I think there’s a tendency in a boss-employee relationship for the boss to talk as the wise old man and the employee to just endure, and I think now it’s more about how you have genuine exchanges of ideas that, for all intents and purposes, you’re equals. You may not be equals in compensation and rank, but you’re equals in that moment about how you’re having a conversation. And that’s a different style of managing than in the past.

Mark: The second thing that occurs is our business is going through a transformation, because new generations of employees and clients are coming into force, new demographics in many different ways are coming into force, and if you don’t have genuine exposure to different demographics, then you’re going to continue to make stupid decisions about them, and I think that that was forceful in terms of the enlightenment. And in fact I think frankly, that’s pushed me to do many things around diversity and inclusion in the industry, because it was so personally fulfilling and emotionally satisfying that it really exposed me to thinking about a broader world than I probably did before.

Hannah: So there are right around 5,000 new CFPs every year now. As they’re entering into financial planning, entering into the financial services industry, what would be your advice to them?

Mark: I think the first thing that I would say is take responsibility for who you work with. Don’t assume that you’re the only one that is looking for a solution here, that the employers want to have good candidates, but you should be making your choice as to whether or not it represents what you want. So be free to ask questions that reveal that, and it may be about culture, it may be about other people with your experiences or background, it may be about how they develop the career, and take notes of this because you want to ask questions, and you want to evaluate whether or not it was a truthful experience within that process.

Mark: I think secondly, you should take a look at the dynamics of the firm itself. Are they demonstrating success, are they growing, are people developing, do they have examples of individuals who started fresh and moved into new positions, could you meet them, would you have a chance to encounter others in the firm? I think third is see if their hiring process, the number of people you meet, is whether or not they’ve including diverse enough people in that hiring process. That will tell you a lot about the business, because I think that will be revealing there.

Mark: So come in with questions. Don’t come in with just answers. If somebody says to you, “Okay, I’ve now asked you 20 questions. Now, what questions do you have for me?” And this has happened quite a few times. I can’t even tell you how many times I’ve gone through this, and they said, “Oh, I have nothing. I’ve checked you out online.” Well, that was about as unfulfilling as can be, and to me, they’re just kind of off the list. I’ve no interest. If you have no curiosity at all, then I have no interest. So treat me like a prospect, because that’s what I am.

Hannah: So what are you most excited about right now?

Mark: About life? You mean generally?

Hannah: Yeah.

Mark: Well, I have a very fulfilling life. I have a great relationship with my wife. We’ve been married 36 years. We spend our time on both coasts in New York and Seattle, we traveled a lot, we love music, we love to dance, so we enjoy our lives together, and when we’re together, it’s pretty spectacular. I enjoy what I’m doing for a living, I enjoy the company that we’ve helped to transform into a new business model. I think that it’s really … I never envisioned working for part of a bank in anywhere in my career. I started in small business and got to this point, but it’s something that has enriched me in ways that I can’t believe.

Mark: I enjoy the opportunity to have conversations like this with people who are the future leaders of this business, that will transform the way in which the communities of clients will want to value the profession. If I can continue to work with people who have the same passion that you do or that Kayla does, who really want to make a lasting impact, I want to be there to support this however I can. So those things excite me.