On Twitter, he found his way, as most people in financial planning do sooner rather than later, to Michael Kitces. Mr. Kitces, who is 40 years old, is an industry octopus with 29 letters of credentials after his name who speaks at conferences, works as a partner at a financial planning firm, writes and researches in quantity, and starts companies here and there. Together, Mr. Moore and Mr. Kitces cooked up XY (as in Generations) to provide a community and infrastructure — including technology tools, investment resources and compliance assistance — for other advisers who wanted to work in this way.
To get this far, they’ve sought out financial planners who could be content with a mere low-six-figure income. If 80 clients pay $150 a month, XY advisers can earn gross revenues of $144,000, though XY charges member financial planners $409 per month.
Many traditional brokerage firms would fire people generating that amount of money. “It’s literally failure, two or three times the median household income,” Mr. Kitces said. “Our income expectations in this industry are completely out of whack, and that was a big part of the opportunity for us.”
Perhaps the most compelling part of the XY offering is what the founders make the advisers do or promise to customers. Those potential clients are often seeking to check off a number of questions or concerns before they sign up with someone.
You must be a fiduciary, which means you have to pledge to act in your clients’ best interest at all times. Revenue can come only from client fees, not commissions. You have to be a certified financial planner to be listed in the network’s consumer directory and must have no major marks on your disciplinary record. One big fine can mean eviction.
There is that requirement to offer a recurring billing option, which can include an upfront charge for getting a new client set up, with no investment minimum. Also, advisers have to be willing to work virtually if clients want to, which allows people with particular niches to find their clients wherever they may live. One member employs Christian principles in his practice, while another specializes in helping women who work in technology companies that have not yet gone public.
People find their way to the profession and the network in a variety of ways. Anna Sergunina’s family immigrated from Moldova, and her father worked as a truck driver while her mother cut people’s hair and did their nails. They wanted her to be a doctor, but she said financial planning gave her the same chance to make a difference in people’s lives, especially her peers.
“I always thought I’d have to work with older people,” said Ms. Sergunina, 34, who is based in Burlingame, Calif.
The median age of XY advisers is 38, and it’s a refrain that many of them sound, having come from other planning firms or related industries where the easiest way to make a living is to chase older clients with the most money.
XY encourages its members to find a niche among their peers instead. Jason Howell, 43, who works in Vienna, Va., considered politicians (he once ran for Congress), children of immigrants (his parents were born outside the United States) and others. He eventually found success helping many couples where one person is a business owner and the other works a 9-to-5 job.
Others seek niches in ways of thinking about the world. Inga Chira, 35, who has a doctorate in finance and is an assistant professor at California State University, Northridge, maintains a part-time practice with a focus on money and happiness.
It is reasonable to wonder if the practitioners are dabblers, as with any fledgling professional network filled with people in the first halves of their careers. Some won’t make it in the industry, while others may go upmarket. And while no one has made a claim on XY’s errors and omissions insurance yet, at least a bit of scandal tends to eventually find its way into most corners of the financial planning world.
Still in a very short time, XY has grown to be more than twice the size of similar networks. Its closest cousin is probably the Garrett Planning Network. Its founder, Sheryl Garrett, is one of the great unsung heroes of American financial services, because she helped persuade many financial planners to charge by the hour.
Finding so many new clients for hourly work does require a lot of effort, which doesn’t appeal to everyone. “The majority of the financial services industry has always been chasing after customers with the ability to provide advisers with the most income for the least amount of labor,” she said.
Mr. Kitces and Mr. Moore, who was once a member of the Garrett Network, profess no animus for Ms. Garrett and her member planners. Some, like Ms. Sergunina, belong to both.
“I wish there were 5,000 Garrett planners serving a whole bunch of markets that don’t get served,” said Mr. Kitces, who recently had Ms. Garrett as a guest on his podcast.
There are other options, too. Vanguard’s Personal Advisor Services offers holistic financial planning for a 0.30 percent annual fee, based on a percentage of your assets. And the so-called roboadvisers, which once only ran your investments with their trading and rebalancing software, have added other services. Betterment recently introduced a charitable giving feature, while Wealthfront can now help you plan your housing purchase.
But if you want to meet a real live human, face to face, you no longer have to be rich to do so. Sure, you are probably smart enough to do it all yourself. But will you make the time? Will you keep emotions at bay that might cause you to make ill-advised investment moves?
If not, there has probably never been a better time to go shopping for a financial planner.