When I visit CFP Board registered programs, the faculty and administration want to know how their program (i.e. students) compare to other programs and what they can do to improve. The fact that they are asking the questions is a positive direction and a sign of things to come as more and more program directors continue to craft programs to produce graduates who will meet firm owners’ needs.
Below are some of the exciting best practices I see being adopted in a few schools, along with my feedback for other planning programs about trying to adopt them. I hope and expect these areas of focus will become more mainstream in the coming years. Until that time, though, firms need to be diligent in their own recruiting process, by looking for candidates who have gone out of their way to achieve some of these practices on their own.
In the meantime, I hope this gives you a helpful perspective on where the puck is going regarding education of the future’s CFP certificants!
- Feedback for Financial Planning Programs - Since this is some firms’ largest pain point, it is often an area where a new planner hire can provide some immediate relief, but new planners have to be on the level the firm owner expects. A good portion of the schools have integrated some sort of technology class which is a great start. Ideally, though, students should have a deeper understanding of software so firms spend less time training. Students should come out with exposure to mainstream financial planning software with intensive focus on programs such as Money Guide Pro, MoneyTree, Naviplan, and eMoneyAdvisor. They also should become familiar WordPress, Twitter, LinkedIn, Facebook and all other social media channels beyond casual personal use. Especially WordPress, perhaps, to assist with any website/blog work those small firms might need.
Firm Owner take away - Make sure you have applicable exercises built into your recruiting process for new planners to showcase their technology skills and prove they are on the level they say they are. Look for new planner candidates who have downloaded free trial versions of software not required by their courses and/or downloaded user guides and tutorials in attempt to be better rounded.
- Feedback for Financial Planning Programs - In our experience, communication is the area that new planners struggle with most frequently because, let’s face it, guiding clients to make smart financial decisions is hard! In academia it is difficult to make changes to the course curriculum, so when schools do adopt a communications class, it gives great insight into the administration and faculty. I also encourage professors to move away from traditional testing where rote memorization and regurgitation are the norm, and instead emphasize case studies, peer review, presentations, and mock situational scenarios that will be faced in the field (i.e., the real world!). The curriculum should include exercises employing critical thinking skills in problem solving, whether it is a client or business management issue. Furthermore, have exposure to completing projects without all of the information (a challenge which is more commonly found in graduate coursework), as that resembles what students will face in completing a client’s financial plan in the real world. In supporting the value of communication skills, we see that new planner candidates that have volunteered in call centers, student managed investment funds, and practiced credit/peer financial counseling tend to do better at meeting firm owners’ lofty expectations than those who don’t.
Firm Owner take away - Items that firm owners should look for in their new planner candidates include courses in Leadership and Professional Sales, Psychology and/or Counseling, involvement in any kind of on-campus counseling program, and participation in the financial planning challenge at the FPA national conference.
- Feedback for Financial Planning Programs -It’s not realistic to expect academia to educate all of their students on all of the various business models that exist in financial planning. However, it is reasonable to expect new planners to have a basic understanding of how firms generate revenue. A few programs have added practice management/business model courses, so the common business structures and fee models are covered. This can be further expanded upon by the requirement of internships discussed below and membership in professional organizations such as FPA, NAPFA, AICPA, etc. Additionally, schools should always make it a point to attend the major national annual conferences (some do already, but there should be more). To ensure professor personal biases do not cloud the perspective of new planner candidates, schools should have a steady flow of local practitioners (from a variety of firm types) as guest speakers who can provide details about their specific business model. Students should also be encouraged to read mainstream publications and blogs.
Firm Owner take away - Look for candidates who are members of any (or ideally, multiple) organizations, attend conferences regularly, are familiar with form ADV (and have read yours) and are aware of some of the recent industry developments. New planners who are doing these things typically have an above average curiosity level, are more career path focused, and have better clarity on what firm type they are targeting.
- Feedback for Financial Planning Programs - Since financial planning does not yet have any type of industry wide formal apprenticeship, training, or career track, an internship should be required to graduate with a degree in financial planning. Currently, out of ~150 undergrad and graduate degree programs, there are only a handful that require an internship, even though our experience clearly indicates that candidates who have had multiple internship experiences in varying firm types are best positioned for success in independent financial planning firms.
Due to the lofty expectations that clients and financial planning firm owners tend to have, sometimes an undergraduate degree along with an internship isn’t enough to succeed right out of the gate, so the student may need some additional time to develop - think ‘redshirting’ just like in collegiate athletics. Frankly, it’s quite likely a master’s degree will become the minimum standard in the not-too-distant future. Schools should be laying the ground work for a 150 hour program if they don’t already have one in place; additional courses could possibly include some of the areas discussed previously.
Firm Owner take away – Be sure to find out whether the new planner had any internships, and if so, how they were obtained. This is one way to measure an intangible, such as who took the initiative, they or their academic advisor, to secure the internship. Keep in mind as well that internship experiences can vary and sometimes new planners’ internships look better on paper than they actually were. Make sure to have quality assurance checks in place to confirm they can do what they say they did over the summer.
These are the next steps in building out our industry into a true profession that it is on the cusp of becoming. Keep a close watch on these activities as you look at new hires to assist in separating the average, good, and great candidate. Also, realize that even though new planners should be coming out with a solid grasp of the basics, some of these other areas will need to be cultivated further by the firms themselves, even for the best candidates.
What other ideas, thoughts, recommendations do you have as the educators continue to try and meet your expectations and provide a new planner candidate that can one day be entrusted to continue the industry you have built and serving the clients you now serve?
- Check out our new resources page http://bit.ly/Resourcespg
- Michael will be presenting to the FPA of Greater Memphis on Cutting Edge Tax Planning Developments & Opportunities on April 17th
- Caleb completed his first half marathon last month and hopes to do another soon