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Mana Moments

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Five Reasons Why We Love the XY Planning Network

 

An Affinity Network On a Mission

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Five years ago, Michael Kitces and Alan Moore started The XY Planning Network (XYPN for short) a professional affinity network for fee-only financial advisors dedicated to working in the best interest of their clients. 

For a monthly fee, advisors within XYPN gain access to many of the resources that had previously  been inaccessible to advisors looking to start a Registered Investment Advisor outside the boundaries of the big firms (like Morgan Stanley, Merrill Lynch, Ameriprise, Northwestern Mutual or Edward Jones). 

As the Network membership grows, XYPN continues to add enhanced capabilities - all in support of their advisors. We’re thrilled that they’ve just announced the addition of XY Tax Solutions, meaning that next year, our clients will have access to affordable tax preparation services!

This year, XYPN added their 1,000th advisor to the network - proving that it wasn’t only possible, but that there are so many advisors who have the dream of changing the industry of financial advice for the better. XYPN has made launching and growing a firm from scratch totally within reach. 

Standing Up for Fiduciary Duty to Our Clients

Earlier this year, the Securities and Exchange Committee passed Regulation Best Interest. This rule was sold to the public as a rule that would require broker-dealers to only recommend financial products to their customers that are in their customers best interests while clearly identify any potential conflicts of interest and financial incentives the broker-dealer may have with those products. The rule falls under the Securities and Exchange Act of 1934 and establishes a standard of conduct for broker-dealers when recommending any securities transaction or investment strategy. Sounds altruistic, right? 

Before Regulation Best Interest passed, brokers (many of whom call themselves financial advisors and work for big companies like Morgan Stanley, Merrill Lynch, UBS, Wells Fargo, Ameriprise, Northwestern Mutual and Edward Jones) were only required to recommend products based on a standard of suitability. As long as the product they sold you was considered ‘suitable’, then there were no legal grounds to pursue should that product be inappropriate. Regulation Best Interest was passed with the intention of beefing up this suitability standard. The problem? Regulation Best Interest does not require brokers to act as fiduciaries. 

Alternatively, Registered Investment Advisors (like Mana Financial Life Design) fall under the Investment Advisors Act of 1940 in which we’re required to act as fidcuries, meaning we’re legally bound to give advice that’s solely in the best interest of the client. For more on the suitability standard vs fiduciary standard, check out Investopedia’s comparison here

This week, Co-Founders of the XY Planning Network Alan Moore and Michael Kitces announced that the XY Planning Network is suing the SEC to block Regulation Best Interest. (XYPN isn’t the only one, earlier this week seven other states also announced they were suing the SEC). 

Why are they suing?

Regulation Best Interest undermines critical consumer protections and makes it even harder for consumers to understand what they are signing up for when engaging with a financial professional. Our industry makes understanding all the things we do for our clients super confusing. If you want an example, look no further than the dozen or so titles financial advisors use. If it’s confusing to understand what your financial advisor does, how much more confusing is it to navigate the recommendations they make? Remember, a broker may still be able to provide you with conflicted advice because they still aren’t bound to act as a fiduciary under Regulation Best Interest. 

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It’s About Planning Towards a Life You’re Excited to Live

Last Friday, seventy financial planners flew into St. Louis two days before the XYPN conference began to attend George Kinder’s Seven Stages of Money Maturity workshop. If you’ve spent time with Mana, you know that financial life planning is integral to the way we plan with our clients. Each and every one of the financial planners who attended the workshop was curious about how to integrate conversations about money with bigger life conversations.

They thought they’d spend two days being taught the “how” of life planning taught by the father of Life Planning, George Kinder. We performed a dozen exercises and broke off into pairs to practice them. At the end of the workshop, many of them noted that life planning is less about doing and more about being an active listener - to their clients’ dreams of freedom. 

I’ve been involved in the Life Planning community for almost five years now, and this was a workshop that filled me with hope. My dream is to have every fiduciary advisor practice financial life planning. It’s financial planning done right. I know financial life planning will take hold when the younger generation, the Generation X and Y advisors, integrate it into their practices. 

 And Building a Golden Civilization

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On the final full day of the conference, fifty financial planners joined together in conversation on how we could each play a role in life planning civilization. It was a 2-hour conversation discussing every aspect of our world that, if given one generation to change, we would. This conversation was spurred on by George Kinder’s newest book: A Golden Civilization.

What was our vision for a Golden Civilization? It was a global community built on empathy, ideas, knowledge, moderation, truth, love, energy and freedom. We wrote down everyone’s ideas - everyone had a voice.

We then plotted out both the inner and outer obstacles present that would prevent us from reaching this vision. Most participants felt that bias and misunderstanding one another were our biggest obstacles.

Finally, we committed to making change happen. Some committed to leading by example, others committed to being more fearless in their daily interactions with others who might not share their same views. 

We left the conversation with spirits afire and, together, we found a community that cared as much about changing our world as we did about delivering freedom to our clients. 

We’re Creating Community and Celebrating the Wins 

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If you’re a Mana client, you know that we’re all about progress, not perfection. The biggest contributor to our love for XY Planning Network is the community it has helped us create. 

With the exception of Stephanie and me, last year this group of fee-only financial planners were strangers. In November the team at XY encouraged us to create a study group that would meet each week to share our wins and losses as well as to dive deeper into the subjects affecting our clients the most. 

One year later, we’re family. Stephanie and I look forward to our Monday morning calls with them. We tell them how much we appreciate their insight and guidance often. 

At the end of this week’s conference, awards were given out. Mana Financial Life Design was voted XYPN’s Firm of the Year. We got up on stage, gave hugs to Maddy, Alan and Michael, and were cheered on by all the badass financial planners who have become our tribe. 

Starting our own firm from scratch has been quite a journey for Stephanie and me. We couldn’t be more grateful for all that the XY Planning Network has done for us.

 
 

Stephanie Bucko and Cristina Livadary are fee-only financial planners based in Los Angeles, California with Mana Financial Life Design. Mana Financial Life Design provides comprehensive financial planning and investment management services to help clients organize, grow and protect their wealth throughout life’s journey. Mana specializes in advising professionals in the tech industry, as well as women who work in institutional investing, through financial planning and investment management. As fee-only fiduciaries and independent financial advisors, Cristina and Stephanie never receive commission of any kind. Cristina and Stephanie are legally bound by their certifications to provide unbiased and trustworthy financial advice.