FPA Leadership Blog

One of the areas where financial planners exhibit a significant amount of leadership is in helping their clients determine risk tolerance and investment portfolio composition.  As we deal with market volatility related to a potential downgrade of U.S. debt, many of us are reminded of the challenges we faced during the financial market collapse of 2008-2009.  Now, as Europe attempts to handle the sovereign debt issues of the southern European countries, we are once again helping clients through a challenging investment climate.

How can we as financial planners exercise leadership during these interesting times?  One of my learnings during 2008-2009 was that a few of my clients who thought they had a high “risk tolerance” were in fact extremely uncomfortable with the market volatility of that time.  There were only a handful, but those four or five clients took up a disproportionate amount of our time and could not get comfortable with the wide swings of the markets.

I personally talked with each of them as they reached the breaking point and told them that we needed to rethink their investment allocations, but that now was NOT the time to make any changes.  I counseled that we owned solid investments for them that will recover with an improving economic situation.  Each of them was told that sometime, in the next 12 to 18 months, as the markets recovered, we would revisit their asset allocations and make changes to reduce the potential volatility going forward.  I pointedly said that when that time came, they would probably not want to get more conservative with their investments because the markets would “feel” better at that time. 

Fast forward to late 2010.  During the fall GFI (Goals and Financial Independence) meeting for each of those clients, I brought up the asset allocation and risk tolerance issues as I had promised I would.  By that time, each of them had recovered what they had lost during the previous downturn and were actually a few percentage points ahead.  All of them remembered our previous conversations.  To a person, they all questioned the logic of reducing the amount of equities in their portfolios and felt like they would be giving up too much potential appreciation. 

After more discussion, all but one agreed they did not want to go through the pain and agony of 2008-2009 again and took our recommendations for a potentially less volatile portfolio allocation.  The single holdout client is where the leadership opportunity arose.  He was the most nervous during the previous downturn and was now the most adamant that he could handle it this time and that he wanted to stay invested in a higher percentage of equity assets.  I told him that in my professional opinion it was a mistake and if he did not make the changes we recommended, we would no longer serve as his advisers.  To say he was shocked would be an understatement.

Ultimately, he reluctantly agreed to our recommended changes and the portfolio was rebalanced to a more conservative mix late in 2010.  When the market was up through April of 2010, I did receive some moderate grumbling.  But, when the market hit the skids in late summer of this year, we had a long talk on the telephone.  He felt rather humbled at that point and thanked me for sticking to my guns.  Even though his portfolio was down some, it was not nearly as much as it would have been.

How many of you have been through this type of experience?  What can you share with your fellow FPA members about what worked and what didn’t?  Each of us takes a leadership role with clients and during these volatile times we have the opportunity to learn from each other.

Richard Salmen, CFP^®, CFA, CTFA, EA
Senior Vice President & Senior Advisor
GTRUST Financial Partners
Overland Park, Kan.

There are many ways to exhibit leadership. One way is leading by example.

I just had the opportunity to spend some time with someone who is doing just that. A couple of years ago, this young man had a serious accident. He fell four stories, breaking his back, both legs, and an arm. Steve was completely immobile for two months and unable to walk for six months. The doctors told him he was going to heal. While he was recovering, he had a lot of time to think. He thought of those with immobility issues that do not heal, and do not recover.

Feeling lucky to be alive and given a second chance, Steve wanted to do something positive with his life. He decided to walk across the country to raise awareness and money for multiple sclerosis (MS). He departed near Boston on May 10, 2011, and expects to arrive in San Diego on November 18. Steve is doing the trip alone, averaging 25–30 miles a day with time off here and there.

Steve shared with me some stories of his experiences along the way. When telling the stories, I don’t believe he totally grasped the impact of his actions. One story was of a fellow in Arkansas. Steve refers to him warmly as Mountain Bob. Bob saw him walking along a remote road as it was getting dark. He asked Steve what he was doing. Steve told him he was walking across the country for MS, but more immediately he was looking for a place to sleep that night. Bob offered him a corner of his land for Steve to set up his tent. Bob said his land was about four miles up the road and took off. Steve thought he would check it out as he walked by and if inviting enough, he would rest there for the evening.

Bob’s yard was full of old cars, parts of a plane, a couple of donkeys and dogs. Steve had an interesting experience. After he left, Mountain Bob called to let him know that he was inspired by Steve and his mission. Since Steve left, Bob started assembling a plane out of the parts he had accumulated over the years. He thought there were many people he could give the plane to that could use it to help others.

In Oklahoma, a fellow stopped on the road to ask Steve about what he was doing. He had seen Steve on the news the night before. Trent decided to walk with Steve a ways. Along the walk he shared that he used to be on the golf team in college, but he no longer golfed. Steve asked why he was not golfing any more. Trent said he just got too busy; kids, work, life. After awhile, they went their separate ways.

Steve got a call a few weeks later that Trent had signed up for a golf tournament. It went well and he signed up for another. He thanked Steve for inspiring him to take action.

Just think of what we, as FPA leaders, could do if we lived and breathed our passion and mission; woke up every morning and walked the walk. Imagine all of the lives we could change and people we could inspire to join our cause or to create their own passion and trail.

Oh, by the way, the inspiring young man I refer to is my son, Stephen. He formed a non-profit for his vision, www.steps4ms.org. You can go there to find out the story of Steve, read his blogs about the trip and donate to help him realize his dream.

A proud parent,

Linda Homsey, CFP^®, RLP^®
Owner
Freya Financial Services
Winchester, Mass.

We are facing a national and global crisis of leadership right now. Certainly, on a national perspective the issue is our political “leaders”who care more about making sure the other party doesn’t “win” rather than what is the best for the American people. Unfortunately, this is a great example of what leadership is NOT supposed to be!

Everything I have read or have been exposed to about “true” leadership says that leaders put others’ interests before their own. Certainly that is not happening in Washington, D.C., the state capitals or corporate America these days. What happened to the servant leaders, the citizen politicians who used to occupy those legislative posts that made the decisions to run our country? Where are the corporate leaders who cared about the workers who built this great country of ours? Today’s politicians and corporate CEOs are almost all multi-millionaires, if not billionaires, who make this all about power and not about their constituents.

Leadership should be about those we lead and not about “me” personally. I guess you can still call that leadership, but it is definitely not good leadership. It is not easy being a leader for “good” where what matters is that those we lead are first and foremost in our vision, words and acts, but seldom does anything that is truly good and beneficial for all come easy. It takes courage to represent the best-for-all versus the best-for-me way of doing things.

It is the same in the large corporations these days, unfortunately. Decisions are made to bolster the bottom line so the executives can keep their lucrative salaries and benefits at the cost of the rank and file employee’s job, salary or benefits. Statistics show the average CEO makes twice as much today as they did a decade ago while the rank and file employee has actually suffered reductions in salary and benefits, if they still have a job at all. And yet, we wonder why America is falling behind other nations as a world leader. You can’t lead the world when you can’t lead your own country, your own economy, or your own company!

What America needs today is for the “rank and file” leaders to stand up and say “We are tired of this greed and selfishness and we are not going to stand for it anymore!” Things won’t get any better until each of us takes a stand in our home, our community, our church, workplace, state and country demanding that we get back to what this country was built on, government by the people and for the people, leadership based on what is right for the country and its citizens and not for the politicians and corporate CEOs. We can do this only if we have the courage and are willing to put in the effort to take back what is our birth right from those who believe we don’t know what is best for ourselves so they need to do it for us. How has that been working? Our country has never been more screwed up than it is right now and it is a lack of authentic leadership that is at fault!

However small you think it might be, standing up to do and say what is right, challenging those who are there only for the power is the only way we can work our way out of this path to destruction. Stand up, take a stand, get involved and let’s bring true leadership back into our country and our world!

Jim Barnash, CFP^®
President
JABarnash & Associates,
Chicago, Ill.

I joined FPA in 2002 as just a member who wanted continuing education and a nice meal once a month. My business partner had been involved in leadership, but I just didn’t think that was for me. Since I had started in this profession in 1997, I had started a family, pursued educational designations, taken on some volunteer roles in my community, and I did not need anything else keeping me busy. However, in late 2005 that all changed. The incoming president of my chapter sent out an e-mail to the membership encouraging participation on a committee and for the first time I saw something that cried out to me: We were starting a new pro bono committee and a member that I had grown to know and respect was the chair of that committee. So, I reached out to them and… VOLUNTEERED!

Helping those “less fortunate” had always been a passion for me, since I was a kid actually. I was already volunteering with some organizations and I wanted to bring those relationships to FPA. In a committee meeting in the late spring, the chair announced that two people (one being him) could go (for free) to the FPA National Pro Bono Forum in Washington D.C. in June. I waited for a few seconds to see if anyone was stepping up to go and then I said… “I’LL DO IT!”

So, there I was – at my first FPA national conference – meeting so many wonderful, bright, compassionate people focused on the same purpose, and I was hooked. I met people during that one and a half days that I still know, respect and enjoy working with. I decided at that conference that I wanted to replace the committee chair for the next board and I knew he was putting my name in the hat. However, the incoming president had a different idea for me. In August, I got a phone call asking me to come on the board and be the Membership Chair. The incoming president felt like I had “what we needed” to grow membership and our chapter. At first I was nervous about this request, but ultimately I said… “YES!”

As I write this, I am in the third quarter of my year as president of our chapter.  This has been the most amazing experience. It is everything that I thought it would be. I had been told by past presidents that this particular year was their “easiest” and I thought – it should be that way for me! (Being in charge of Membership and Programs was hard enough!) The toughest work for my role as president started a year ago, when I was president-elect putting together the board for 2011. This tough period lasted until the end of the year, when I had completed our strategic planning meeting and the 2011 budget.

Starting in January I thought “I’ve got everything set up for the year; this should be pretty smooth sailing.” Right before my first chapter and board meeting as president, my chapter executive handed in her resignation and gave us 90 days to fill her shoes. This was not my idea of smooth sailing, but it gave me the opportunity to take our board through the hiring process and, thus, take our chapter to a whole new level. This was a big transition, and we are still working out kinks, but I know that the future leaders of our chapter have an incredible team behind them.

So was this the “easiest” year for me? Maybe not, but I would have to say it has been the most enjoyable and the most rewarding. At every chapter meeting, board meeting, or chapter activity I see the great work those around me are doing and I think to myself – “I had something to do with this.” Being in FPA chapter leadership, I have encountered opportunities and challenges, most of which were not expected. Every experience has helped me grow in leadership, understanding and professionalism. Every time I have VOLUNTEERED, said “I’LL DO IT!” or said “YES!” a door to a new journey has been opened.

Samantha J. Kopek, CFP^®, EA
Vice President and Senior Advisor
GTRUST Financial Partners
Overland Park, Kan.

Right after I finished the CFP^® certification program at Boston University in 1993, I joined the Financial Planning Association.  It was a great way for me to network and to find out more about financial planning. I had worked in financial services in the past, but more on the product side.

FPA of Massachusetts was (and still is) a vibrant chapter. I spent a while observing the members and what the chapter had to offer. It was not long until someone engaged me at a meeting and asked if I would be interested in getting more involved. I joined the membership committee.

Later, I was asked to step up to the chair position of the committee. This was not something that I would have volunteered for. Again, I was pleased to be asked and took the leap. My journey took me through several years on the board, including the privilege of serving as president and chair.

If I had not been asked to get more involved in the chapter, it would have been a loss for me. It has offered me the opportunity to step into a different role; one that I have thoroughly enjoyed and constantly learn from.

I met a FPA of Massachusetts member at one of FPA National’s annual conferences. He attended some local meetings, but was not that active. We chatted awhile and went our separate ways. This fellow was impressive and seemed interested in the chapter and its workings. About six months later, our chapter was starting the process of developing a slate for the next year. We had an opening in the treasurer’s position. I thought of the fellow (who worked at an accounting firm) as a possible candidate for the position. He was thrilled to be asked. We had a discussion and he shared how he thought the board was kind of “clicky”. He did not know how to get involved. Fortunately for the chapter, he was asked, he accepted, and he is still a valued member of the board.

It may sound simple, but all we need to do is ask our members to get more involved. They can only say no and in many cases you will have a grateful member that is eager to become an integral part of the chapter.  Our members may think the board is an “in-crowd”, they may not know how to engage, or they may think they are not leadership material. Asking them to get more involved widens the circle. It takes the pressure off of the member to ask how to be included. It also gives the member a chance to tap into their inner leader that they may not even know exists.

Have you tried reaching out to your members?

What other strategies have you used to get members to move into a leadership role?

Linda Homsey, CFP^®, RLP^®
Owner
Freya Financial Services
Winchester, Mass.

A few years back, I was involved in a training session regarding advisers learning how to work with clients on the emotional aspects of providing advice. In order to provide their clients with this form of leadership, the advisers first had to understand and control their own emotional responses to stressful or euphoric situations. We were involved in an exercise where we used a deck of cards with various values listed on each card, and then we narrowed the deck down to our top five values. Like everyone else in the 25-person group, I ended up with either God or family as my top two values. I picked those because, with the group, I felt the pressure to do the obvious and I didn’t feel comfortable enough to pick what I truly felt.

I did the exercise again when I got home and came up with a much different set of values and began to reflect as to why they were so different and why I didn’t feel comfortable doing it this way in the group. At first, I felt a little embarrassed that my top value was “happiness” and not family or religion. The more I reflected, the more I realized that if I wasn’t happy – happy in my marriage, as a dad, in my work, in my relationships with others, and in my day-to-day life – then I wasn’t very effective in any of those roles. So, I made up my mind to focus on being happy, happy in all areas of my life. If I couldn’t control it or if I couldn’t impact the change, I made the conscious choice to ignore it and focus on what made me happy.

Stress began to melt away and people noticed I was different. I was a better spouse, father, brother, boss, coworker, volunteer, community member, neighbor, etc. I began to talk with siblings, colleagues and friends about this as they would complain to me about how life had dealt them bad cards. I related my findings about focusing on the only thing I could control…me. I can control how I respond or react to every situation and if I couldn’t impact the situation to change it, I chose to let it go and focus on something that made me happy. Amazing how life seemed better!

Others began to respond to my story, and soon, I could start to see differences in them. Not all chose to take my story to heart, and they still complain and moan, but I choose to listen and tell them I feel for them and then I move on and focus on things that make me happy. As I continue to share this simple story, I am always excited to see the impact it has on most people. I see the lightbulb go on as they realize they control the leadership over their life in this way. Similarly, as they share the story, they influence others…and after all, influence is what leadership is all about. Leadership begins with me!

Jim Barnash, CFP^®
President
JABarnash & Associates,
Chicago, Ill.

Are you a Leader?

My sense is most people don’t recognize themselves as a leader; we often have antiquated views of what a leader looks like. For some, their vision of a leader doesn’t match their own gender or color because they lacked strong leaders in their community. Others simply come from families that didn’t consider leadership to be “something we do.” I know this has certainly been my own point of view in the past. 

For those of you who recognized yourself here, are you willing to recognize your impact in the world? Do you fully appreciate the scope of your influence?

 We All Have Impact

As you move through the world, you are constantly influencing those around you. From the smile or frown you share with your fellow commuters, to the tenor of your interactions with your colleagues and clients, you are creating the world you live in.  That world can be one of cooperation and co-creation, or it can be one of struggle and domination. You can choose to face challenges with a sense of opportunity or one of doom and gloom. My experience has been that when I accepted that I create my own reality, I was then able to start seeing the opportunities around me instead of just the obstacles.

 Sharing the Wealth

My experience at FPA has clearly shown to me that financial planners as a tribe have an abundance of talent, skill, vision and creativity. I’ve also seen that those who share themselves have benefits come back to them threefold. Last year, almost a full quarter of our chapter membership gave back by providing one-on-one planning for the underprivileged, delivering seminars to young adults in Job Corp, leading Junior Achievement workshops and hosting a wildly successful Financial Planning Day. I’ve seen how the planners I work with are energized by their experiences, how they form new friendships and expand their network. By volunteering, they make the choice to give their best and the advantages materialize.

There Are Many Different Forms Leadership

The first step of your path could be as easy as checking out your local chapter’s website to evaluate volunteer opportunities. FPA National’s “Do One Thing” provides 108 different ways to volunteer. As we know “A journey of a thousand miles begins with a single step. (Lao-tzu) You’ll be glad you took that first step, guaranteed.

Holly Gillian-Kindel, CFP^®, CLU, CPCC
Director of Financial Planning
Mosaic Financial Partners, Inc.
San Francisco, Calif.