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Exploring the 12 Tribes of Financial Planning

Financial planning is a diverse field encompassing various business models, client focuses, and emerging trends. To capture this diversity, experts have categorized the profession into 12 “tribes” – a framework for understanding the breadth of opportunities. By mapping the financial planning landscape into tribes, students and professionals alike can better navigate specializations.


The tribes are divided into three overarching groups, each containing four distinct approaches:


Big-Brand Firms Focused on Sales Opportunities


The first group of tribes focuses on national big-name firms centered around high-risk, high-reward sales scenarios:


Wirehouse Brokerages: This tribe is part of large brokerage houses offering a wide range of financial products and services. Advisors receive extensive training and support but are pressed for sales.


Property & Casualty Agencies: These multi-line agencies sell various insurance products from auto to homeowner’s to life insurance. Advisors must build client bases through networking.


Life & Disability Insurers: This group sells life insurance, long-term care, and disability policies. Generating leads and overcoming rejection is critical.


Franchise Broker-Dealers: Financial advisors at these firms leverage branding, compliance infrastructure, and tools from the franchisor but build their books.


These tribes prioritize ambition and sales abilities. However, they provide formal training programs and national marketing. The tradeoff is little initial salary – you must put in work upfront before higher earning potential.


Client & Student-Focused Advisory Roles


Alternatively, the second quartet of tribes caters to more analytical, detail-oriented professionals focused on operations, clients, and students rather than sales outreach:


Registered Investment Advisors: RIAs provide ongoing investment advice and portfolio management for fees based on assets under management. This is a growing segment centered around holistic services.


Accounting & Tax Advisors: Professionals offer accounting, tax preparation, payroll, and consulting services. The work can be routine but also intellectually engaging.


Counseling Practices: These advisors provide guidance on financial matters but avoid selling products. Success depends on interpersonal skills.


Government, Academia, and Research: These tribes focus on policymaking, teaching, conducting studies, and publishing. The work can be fulfilling by educating or driving progress.


Rather than prospecting for new clients, these four tribes concentrate more on serving existing individuals and students. They value detail-oriented work and strong analytical abilities.


The Future: Fintech, Robo-Advisors and More


The final group represents emerging trends and alternative models reshaping financial planning, including:


Robo-Advisors: This fast-growing tribe uses algorithms and automation to offer investment portfolio management online with minimal human intervention. The focus is technology.


Fintech Firms: Encompassing a variety of startups, these tribes disrupt established industry processes using the latest tech innovations. Specialties range widely.


Banks: Large national and local banks provide services like savings/checking accounts, personal/business loans, mortgages, credit cards, and more. They leverage scale and infrastructure.


Credit Unions: Member-owned nonprofits offer similar services as banks but with potential social impact missions. The focus is community.


Trust Companies: Providing trust and estate planning services for high-net-worth clients is the specialty here. The work is highly customized.


Discount Brokerages: By eliminating research, advice, and frills, these firms offer the lowest fees and commissions on trading and investments. The priority is affordability.


Product Distributors: These professionals connect clients to annuities, life insurance, and other financial products from large providers. Sales and networking abilities are key.


This forward-looking tribe leverages technology to disrupt established processes or deliver niche services. As financial planning progresses, these areas are expected to gain more influence.


Choosing Your Tribe


While tribes have unifying attributes, there remain many unique traits within each. Individuals should reflect carefully on their skills, values, interests, preferences, and risk tolerance when selecting a tribe to pursue. Some may even transition between multiple tribes over a career as passions and priorities shift.


The 12 tribes framework aims to help newcomers determine where they may thrive. But boundaries between tribes will likely blur over time as the field evolves. Ultimately, finding the right tribe comes down to self-awareness and matching personal strengths to tribal characteristics.


With ambition and willingness to work hard upfront, the sales-oriented tribes can be highly lucrative. But they also come with pressure and instability. More analytical individuals may prefer tribes focused on operations, teaching, or counseling. And those excited by innovation may seek out fintech or robo advisory opportunities.


Financial planning’s 12 tribes capture the diversity of business models, client types, and growth areas. By understanding the core differences in skills, values, and models across tribes, both students and working professionals can make more informed decisions and find optimal career paths. The framework provides clarity amid complexity on the road to serving clients and shaping the future of finance.