Writer: Max Crampton-Thomas
2 min read August 2021 — James Gnefkow, executive vice president for Peachtree Planning, spoke with Invest: and discussed the current state of financial advising in Atlanta and the factors that his firm will address when planning for the future, including diversity and financial literacy for underserved communities.
What factors do you see shaping the financial planning industry?
Generally speaking, there’s still some fear, uncertainty and doubt in regard to not only the coronavirus but the Delta variant and how that’s going to impact people going back to work and their families.
There’s uncertainty coming out of Washington, D.C., on Capitol Hill, regarding tax legislation and how that could potentially impact the markets but we’re always optimistic. We believe the long term is always going to work out in our clients favor but our approach is to make sure that if something happens in the short term it’s not going to result in our clients failing financially. We’re always optimistic and hopeful and really help our clients identify the things that they aspire to and the things that are non-negotiable in their lives. Those are cornerstone values that they want to see come to fruition and it’s our responsibility to put a plan together to make those things happen. Long term, we’re always optimistic; short term, there are some risks that are out there and we just need to make sure that we’re mitigating those risks as best we can.
What is the state of your operations in the local Atlanta market?
As a firm, we’re cognizant of our people’s comfort level in being back to work. We’re already comfortable in a virtual setting so we are understanding of those concerns. However, we all miss human interaction because nothing can replace actually being in person together.
Our firm continues to grow rapidly because we’re not just providing wealth management, we’re truly doing comprehensive planning and not just for individuals and families but also for closely held businesses. One of our key differentiators is helping closely held business owners get clarity on where they are going and how they are going to exit. That tends to be one of the biggest challenges that closely held business owners face. They assume their only path out is going to be an outside third-party sale but, in reality, most businesses transfer internally through key employees and kids. That requires planning because key employees and kids often don’t have the financial capital to be able to write a check to the owner the day they decide to leave. We put a plan in place that ultimately will help them have an exit for their business.
What does nurturing the next generation of financial planners look like?
I am laser focused on the next generation of financial professionals, not only in Atlanta but throughout the Southeast. The average financial adviser is a 56-year-old white male so there’s a huge need to bring along the next generation.
If we think about our younger adviser population, it’s a diverse group. There are young professionals who are attracted to the industry because they want to make a meaningful impact on the lives of other people. But they need help, coaching, support and resources to maximize their potential. If we look at the advisers we brought on in the last three years, we’ve got a lot of diversity.
What does tech investment look like for the firm or more broadly for the financial planning sector?
I think it’s multifaceted. It’s not necessarily an investment in technology; it’s more of an investment in helping people leverage technology. We’re aggregating all of the client’s financial information and providing real-time access to it. Often, it’s the first time they’ve seen all of their financial information in one place. We’re doing a lot of the planning simulation through that technology.
We’ve had components of fintech embedded in the firm for a long time now. Of course, we continue to evolve and we always monitor what’s coming down the pike.
How can different advisory approaches best be streamlined to accommodate underserved markets?
Generally speaking, when we’re talking about professional advisers, every specific type of adviser has their own lane. When you think about ultra-high-net-worth people, they’re not outsourcing advice to people who only swim in one lane, they’re operating in a family office type of structure and going out and hiring some of the best and brightest. As a firm, we try to bring that approach to average everyday Americans and bring that all together to provide a comprehensive experience.
You also referred to behavioral finance techniques?
It’s one thing to be able to spot the issue but it’s an entirely different issue to change the tendencies that all people have. We lean into the behavioral finance component of advising very heavily. It’s a matter of making sure all the advisers in this firm are educated and can lead their clients through those natural human tendencies that we all have.
What does asset diversification look like in today’s climate?
People often think of diversification as relating solely to assets and not having all of your eggs in one basket. I think equally as important is thinking about the other elements of diversification like timing. We have to make sure that we have an element of diversification addressed when it comes to short-term, midterm and long-term money.
Tax diversification is also paramount. There’s a high likelihood that taxes in the future are going to be higher than they are today. We want to make sure, from a tax standpoint, that we have different types of buckets that are going to be taxed differently to give us maximum optionality when it comes to distribution.
What is the general outlook for Peachtree planning?
The future is bright given the fact that the firm is growing rapidly, and we are equipping our diverse population of advisors to better serve individuals, families, and business owners. As the economic and tax landscapes continue to evolve, we remain on the front lines to guide our clients through these potential headwinds. We strive to meet our clients where they are, help them determine where they want to be, and we work closely with our clients’ tax and legal advisors to make sure there is a comprehensive and clear roadmap forward. It’s a collaborative, relationship-based planning model, versus the commonly used transactional approach. We’re confident it’s the right model for our clients and will allow us to continue our strong growth into the foreseeable future.