8.5 MIN READ
The XYPN movement is growing rapidly. Yet despite thousands of XYPN shirts floating around and hundreds of members representing all 50 states, it’s still an uphill battle to get the word out about what we do, who we help, and how it all works.
XYPN members are fantastic when it comes to sharing the movement. For that, we adore them. If you’re one of our beloved members, you are already familiar with some common misconceptions about XY Planning Network, such as “all members are 25” or “XYPN advisors don’t manage assets.” I’ll address these misconceptions here so we can all get on the same page and make life a little easier for our marketing team.
Misconception #1: All Members are 25
Of all misconceptions, this is the one we hear most often, probably because the “XY” in our name signifies Gen X and Gen Y. The truth is, the X and Y in our name represent the populations that XYPN members serve. They are passionate about bringing real financial planning to this underserved demographic.
Age is often one of the first things new members mention when they introduce themselves to me. “Hi, I’m probably the old lady of the group.” Or, “Hi, I may be too old for this group.” “Hi, I’m not Gen X or Y, but....” Our Grow the Movement team even fields questions like “I’m 49, am I allowed to join?”
The answer is yes, yes, YES! The average age of an XYPN advisor is 40; the median age is 39. We have just 23 members under the age of 27, and we have four advisors older than 70.
At XYPN, we encourage people to get experience working at an RIA or as a client-facing advisor before they even begin thinking about starting a firm of their own. We recommend incoming members save enough capital to survive for 1-2 lean years of new business ownership. This is the route most members take, and thus, they’re typically over age 25.
Misconception #2: Members Must Exclusively Serve Gen X and Gen Y
Now that’s just silly, isn’t it? XYPN members can work with whomever they choose.
They aren’t required to serve only Gen X and Gen Y, but they often join XYPN to do just that. No doubt financial planners everywhere are trying to figure out how to attract younger clientele. From a business perspective, it just makes sense to appeal to the up-and-coming generation. Older clients die off and culture evolves. Like many industries during our lifetime, it was time for an overhaul to financial planning.
Yes, the fee-only model was developed to appeal to Gen X and Gen Y, but it makes a helluva lot of sense for clients of every age too. Everyone can get on board with a step in the right direction. Case in point: your grandparents may be hanging on to their landlines, but I bet they have cell phones too!
Misconception #3: Members Undercharge for Financial Planning
Each member has full autonomy to set their own rates for their services. Some members do initially undercharge, but most correct course as they refine their business models with experience. We saw in our Annual Benchmarking Study that a majority of members raise their prices by year three of firm ownership.
In a recent episode of XYPN Radio, Rebecca Conner Clem shared her experimental approach to pricing and how she discovered just the right price point for her area. She started at $50 per month which, in hindsight, was much too low. After a few clients signed on, she raised her fees another $50, then another, until she settled on the ideal rate for her and her clients.
Consistently re-evaluating fees is something we encourage members to do. In fact, we even recommend adding an inflation rider to client agreements increasing prices by 3% each year, if not more.
Misconception #4: XYPN Members Don’t Manage Assets
Considering XYPN members are all “fee-only” advisors, it’s easy to mistakenly assume they’re unable or unwilling to have assets under management. This simply isn’t true. Frankly, XYPN advisors may be doing a disservice to many clients if they don’t offer AUM services. Some planning clients need help managing their assets, and they’d prefer to rely on their trusted advisor.
Keep in mind, many XYPN advisors work with clients long before the clients have assets to manage. Members bring real financial planning to those folks by simply charging a transparent fee. If all goes according to plan, however, those clients will build wealth.
Enter XY Investment Solutions. As the name implies, it’s our custom-built solution for XYPN members to offer AUM services to their clients. When your clients are ready, we have a turnkey asset management platform (TAMP) for you.
Misconception #5: I Have to Launch My Firm Before Joining XYPN
This one pains me the most. We have so much help available for those in the process of launching a firm, it’s a shame to miss out on it.
For starters, our highly complimented compliance team will handle your Initial Registration flawlessly. They’ve helped hundreds of advisors get registered in nearly every state. In some states, it was such an uphill battle that our team got on a plane to meet with regulators in person. I can confidently declare you won’t find more experienced and dedicated compliance expertise anywhere.
While our compliance team works on your registration, our Advisor Success team will put the wait to good use preparing you for all facets of firm ownership. The XYPN Start My Firm program will allow you to tap into decades of combined experience from our expert coaches. You’ll be paired with other firm launchers to lean on along the way, so you’re never alone as you go out on your own. It’s a beautiful thing!
Misconception #6: XYPN Is Only for New Firms
It seems either people don’t know we help advisors launch firms, or they think that’s all we do [facepalm]. Although new firm launchers represent a slight majority of incoming members each month, the number of established RIAs joining remains high too. Upwards of 40% of all new members each month have an existing RIA. We have members who have been running their RIAs for 10 to 20+ years, and they find themselves right at home in our community.
Established firm owners are often initially motivated by the value in our tech stack, but upon joining, they’re immediately drawn to the community. Experienced or not, everyone benefits from having a squad in their corner.
Over the years, we’ve also developed a plethora of services and support for these well-established firms. For example, we rolled out executive business coaching for members ready to work on the pain points that come with a thriving business, such as time management. Over twenty of our most veteran members currently rely on Arlene Moss, our in-house executive business coach, to help them achieve their next-level goals.
This year, we held our first experienced-member retreat, Xcelerate. This intimate gathering was designed to address issues that crop up for firm owners who are a little further down the road, such as hiring, scaling, and strategic business planning. As our member firms become more advanced, we’ll continue to find unique and inspiring ways to support them. If we do our jobs well, all new firm owners will become candidates for established firm support sooner rather than later!
Misconception #7: XYPN is a Non-Profit Organization
Given XYPN’s place in the industry, some mistakenly believe we’re structured as a non-profit organization. Although we’re NOT a non-profit group, we ARE mission-driven like our friends at advocacy groups such as NAPFA and FPA.
We’re not shy about the fact we’re running a business. In fact, we think this makes us well-positioned to support you as a business owner. We’re happy to share everything we know about running a successful company so XYPN advisors can succeed too.
We’re excessively transparent about our business operations for the benefit of our community. Several XYPN team members “lift the curtains” through blog writing, XYPN Radio appearances, and public speaking at our annual conference, #XYPNLIVE. Founders Alan Moore and Michael Kitces frequently host “Ask Me Anything” sessions for members and literally every topic is on the table because we have something in common: our company is for-profit and so is yours.
Misconception #8: XYPN Gets Kickbacks from Tech Partners
This goes against everything we believe. XYPN advisors don’t profit by selling products to their clients, and neither do we!
Our technology partnerships are born solely from the needs of our members. The process for establishing these partnerships is arduous; we demand the best for XYPN advisors. Platforms are fully vetted before negotiations even begin.
Because of the vast size of the Network, we’re able to essentially “buy in bulk” and secure deeply discounted prices (think Costco!). As they say, there is strength in numbers. We pass these savings on to our members. In many cases, we foot the entire bill and offer the technology at no additional cost to our members.
Unlike some other associations and industry organizations, we do not accept commissions, revenue-sharing, or anything of the sort from our technology vendors, to avoid having any conflicts or undue influence about what we recommend and include in our tech stack (or as supplemental additions to our tech stack that members can buy on top, such as Orion, eMoney, and FinaMetrica). However, there are situations where the fee we charge to members for some a la carte technology tools is higher than the raw cost of the technology made available to XYPN. This fee mark-up is done by XYPN itself (in our standard fee-only manner by charging members directly, not as a commission from tech vendors) to help us manage the cost to support and service our technology vendor relationships for members, from Member Services and Operations staff support for ensuring the right members have the right access to the tools they've purchased (onboarding/offboarding and verifying proper licenses for nearly 800 members every month takes time!), to dedicated staff support for our technology relationships where appropriate (e.g., Orion, where there's an entire staff member dedicated to support the relationship). As we continue to grow and scale, it remains our goal to further drive down the total costs of these technology tools for our members over time.
I’ll say it again because it’s important: kickbacks have no place in our business model.
Misconception #9: XYPN Members are Required to Use the Tech Stack
Speaking of technology, no one is required to use any benefit of XYPN membership. XYPN advisors can pick and choose what works best for them “cafeteria style.” All members are at different stages of firm ownership and have different needs.
And let’s face it: adopting new technology usually comes with some friction, not to mention a learning curve. (Your grandparents didn’t start using that smart phone without some help!)
On the plus side, we’ve worked closely with our partners to develop smooth onboarding procedures and processes for transitioning members from one tech to another. If and when the time is right for you, you’re in good hands.
While considering new tech, members have hundreds of peers to lean on for advice. XYPN has done the legwork of vetting quality products and making special arrangements for price and service, but input from those using these platforms in their daily lives is especially valuable. XYPN advisors can simply pose a question in our members-only forums and instantly get all of the advice they could ever want directly from those who have been there, done that.
Misconception #10: XYPN Members are All Competing for the Same Clients
Nope, nope, nope. Stop by our find-an-advisor portal and you will quickly realize the ideal client for XYPN members varies tremendously.
XYPN advisors collectively serve hundreds of different niches and offer a wide variety of planning services. For example, Helen Ngo works with female attorneys, Sahil Vakil works with immigrant families, and Ariel Ward works with airline pilots. Yes, they all serve Gen X too, but these consumers make up the largest generation in history! There are plenty of clients to go around.
From what I’ve seen during my time at XYPN, the community is nothing but nurturing and supportive of each other. Being a solo firm owner with XYPN means you have the freedom to make your own decisions, with hundreds of supportive colleagues just a click away. It’s the best of both worlds.
And Finally: The Rumor Mill
In conclusion, if you’ve heard wild rumors like “Michael Kitces’s blue shirt has its own fan account on Twitter” or “XYPN plans to grow to 10,000 members,” or “There was a school bus dangling off the roof of their conference,” I can assure you those statements are categorically, unequivocally...true.
About the Author
Maddy Roche is the Director of Getting Shit Done at XYPN, and has been getting shit done since she joined the team in May of 2014 when the Network was made up of our first 30 founding members. Since then, Maddy has worked with and welcomed each of the Network’s members, and helps all of them take advantage of XYPN membership. Maddy is responsible for member benefits and services, including management of vendor partnerships and member rollouts and initiatives. She manages the XYPN Member Experience Program.