Last month after my southwest Washington/Portland FPA Mid Winter Conference Keynote presentation, I took four additional plane flights (and hotels, and rental cars!) to visit four CFP Board registered programs in the West: Utah Valley University, Colorado State University, California State Northridge, and San Diego State. It was my own little version of planes, trains and automobiles! During these visits, I interviewed dozens of students, spoke to a handful of PhDs (faculty members, college deans, and program chairs), and gave several presentations to help the students understand the financial planning world they will soon be entering. Below are some notable highlights from my trip I thought you might be interested in.
I met a lot of students and had some great, average, and not so great interviews. On the plus side, I found many students are ready and eager to enter the financial planning world. For instance…
- 90% were dressed appropriately for an interview.
- 60% had a good idea of what type of firm and role they were seeking.
- 50% followed up with a thank you note.
- 80% were willing to relocate, this is up from 20% last year most likely due to the dearth of opportunities in Salt Lake City, Portland, and Ft Collins/Denver.
- Several students missed work and/or class to participate in the events. Even though I had made it clear I did not want them doing this, this provides a great deal of insight into the candidate’s passion and initiative.
However, my experience also reinforced the perception that while there are some great new planners out there to hire, there are also a lot who are not well prepared to enter a professional planning firm. For example…
- Just 50% brought a hard copy of their resume and only one had business cards.
- No candidates brought a copy of a financial plan or financial planning project they had completed to the interview.
- Few had an understanding of the various business models, compensation structures, licensure requirements, recent legislation (Dodd-Frank) and industry issues.
- Not all students enrolled in a CFP Board registered program are seeking careers in financial planning. Several were looking to start their own franchises/businesses unrelated to the FP profession.
Some additional observations that stuck out to me when I was touring campuses and afterwards while reflecting on the plane flight home.
- Last year I reported that the larger brokerages and wirehouses were in competition for the same new planner talent as RIAs. It’s worth noting this year that the candidates who had completed internships at these firms were not going to be accepting the full time positions offered to them, and instead planned to seek an opportunity in the independent wealth management model. Candidates still appear to have a tendency to want to go to smaller independent RIA firms providing financial planning and investment management. However, candidates did express frustration about the lack of RIA openings and reiterated they would take what they could get - e.g. wirehouses and brokerages - to get their foot in the door.
- Although I don’t have any empirical data to support this, based on the interviews I had and the class make up during the presentations, it definitely looks as if the number of women enrolled in financial planning programs is increasing.
- Just like in the financial planning profession itself, the younger programs appear to be more hungry and set for growth versus some of the older more established programs that might be set in their ways and more resistant to change. The politics and bureaucracy of academia is a major player in this. What I have heard from some of my sources in academia and witnessed personally is that some programs have shifted their focus away from the undergraduate programs and more toward the masters and PhD programs because of financial benefits and increased control.
- I came across another firm that is providing a 3 year New Financial Planner Residency program similar to Cornerstone Wealth Advisors in Edina, MN. For the future of the profession, I hope continue to see more and more of this.
- As college costs have risen, a larger percentage of the students are working to supplement themselves or fully support their college career. This year, there were many working full time to fully supporting themselves. Of course, every generation has some who feel entitled, perceived as unmotivated, etc., but the students I met that are working 40 hours per week and taking 12 credit hours didn’t fit that stereotype. These experiences prepare a candidate for adding value to a wealth management firm by contributing to shaping their organization, time management, prioritization and financial management skills.
In our effort to provide firm owners with the best talent fit for their firm, we will continue these visits and look forward to sharing our encounters. Stay tuned for next month’s post on what I told all of the professors who asked me what they needed to do to produce a better new financial planner candidate.
- Caleb will be one year closer to the average age of a CFP® certificant on March 21st.
- Michael will be presenting to FPA San Francisco on March 12, 2013 www.kitces.com
- You can also keep tabs on me and Michael through https://newplannerrec.wpengine.com/conference-sightings/