The financial planning profession has changed substantially since I joined almost 20 years ago. While these changes have been mostly for the better, we are still struggling with the hiring and training of new financial planners. I see it every day as CEO of New Planner Recruiting, each semester as an adjunct faculty member at the University of Georgia’s financial planning program, and as a CFP professional with a local RIA.
Many of the smaller independent RIAs don't have the infrastructure, desire, or bandwidth to train their new hires. Instead, they have been forced to hire more experienced planners away from large financial service institutions such as Fidelity, Vanguard, Schwab, Merrill, etc. after those institutions have trained new planners out of CFP programs. This can work, but hardly moves the needle if we are going to continue to grow the independent advice channel to keep up with demand. And honestly, the training these new planners have received doesn’t always include the types of knowledge that many independent RIAs need.
I have seen so many bright new planners flock to these large firms because they will hire without prior experience and may provide new planners with their best shot at being trained only to find out after a few years that they are not being taught true financial planning, at least from an independent standpoint. Frustrated that these planners quickly become disenchanted with our great profession, seeing a good number settle for less-than-ideal situations or leave the profession altogether, some colleagues and I think there has to be a better way.
Sue Chesney, Carrie Jones and I are currently testing the concept of hiring current and recently graduated students from college CFP educational programs to provide outsourced financial planning data entry and paraplanning services to independent planning firms. We have experienced CFP practitioners proficient in each of the most popular financial planning software programs. These CFP professionals are teaching the hired students how to understand the information they are receiving, enter the data points into the software, identify any information gaps, and provide a list of basic red flags/opportunities for the advisor to consider as they create the plan for their client.
Our intention is to simultaneously help new financial planners entering the profession, financial planning firm owners, and the American public as a whole through increased access to knowledgeable financial advice. Here is how we think we can create a win-win for everyone involved:
- Earn an hourly rate as contractors.
- Receive hours toward the CFP experience requirement.
- Possibly receive internship/experiential learning course credits from the college.
- And most importantly – learning and understanding how financial planning is done!
The planners will work virtually on their own schedule (after the initial training) and must commit to at least 10 hours per week. We will provide access to the various software programs and a secure computing environment. This work will allow new planners access to multiple planning software programs, gain valuable experience, and build their resumes, which will better position them to join an RIA.
- Be able to leverage your internal team by outsourcing data entry and initial review work, leaving your team to higher-value activities without having to hire a full-time employee.
- Give back to the profession by allowing new planners to experience what the planning role entails.
Firm owners who want to be a part of our beta test and outsource some or all of their financial planning can utilize our services for data entry or data migration to streamline their business. Currently we are working within eMoney; however, our intention is to build this out to cover the other major financial planning programs. Advisory firms will be giving back to the profession by providing opportunities for students to work on real client situations all while being supervised by an experienced CFP® who verifies and signs off on all work completed.
If we can increase the number of new planners who have deep data input and software skills as well as a foundational planning understanding, our hope is that firms will hire more freely, allowing them to serve more clients. We estimate that each new planner trained will help at least fifty additional households seeking financial planning services. This is an exponential benefit and something that will continue moving the profession forward.
We realize there are existing outsourced paraplanning businesses already in operation. However, we feel this builds a better long-term solution to bridge the gap between inexperienced planners and firms looking to hire.
If you or someone you know is either looking to enter the financial planning profession or if your firm could use some data entry and/or migration assistance to initiate or maintain clients’ financial plans, contact us at ZooKeeper@PlanningZoo.com or fill out this form. We will follow up with more details.
Please email us with your comments, thoughts, suggestions, and anything else you would like to share at ZooKeeper@PlanningZoo.com.