Last month I shared my recent recruiting trip highlights and in this month’s post I want to explore the variations between the different types of CFP Board registered programs in more detail. For those not familiar there are actually two types of CFP Board registered programs: Degree and Certificate. Here is a general description of both:

Certificate programs generally provide the CFP Board financial planning curriculum on a standalone basis, for which the individual simply receives a certificate (thus, the name) at the end and is prepared to sit for the exam. Certificate programs differ from a traditional degree program in that the primary focus is to get students, usually career changers, through the six class educational requirement as quickly as possible so they can sit for the CFP® examination.

Degree programs provide the CFP Board financial planning curriculum as part of an overall program to provide the student an undergraduate (or sometimes, graduate) degree. Degree programs typically focus on providing students with a baseline knowledge in the required technical areas as well as exposure to some practice management topics so they have a building block for the firm owners to show new planners how to be become effective practitioners. Degree programs will be the primary focus on this month’s post.

Underneath Degree programs there are two types of sub structures: those that are affiliated with a university business school versus programs that are not. See below for the opportunities and challenges as I see for each type of Degree program.

Disclaimer: These viewpoints are mine solely and have been developed from actually going through and receiving an undergraduate degree from a Degree program institution, as well as hundreds of conversations with students from both structures, dozens of placements, many on-site visits to program facilities, conversations with practitioners, retired faculty, current faculty and various administrators.

Affiliated with business school (AWBS) –

• Tend to be business finance centric, not as much emphasis on independent wealth management RIA type career fields; many students out of these programs will tend to choose a different career track.
• Often students will be pursuing a finance degree with the financial planning option – which can mirror more of a certificate type program – and they may not even plan to pursue the designation or sit for the CFP exam.
• Could have more stringent acceptance standards – obviously depends on the school, but candidates that are accepted tend to be in the top 10% of their high school graduating class.
• First financial planning course isn’t taken until student’s junior year – this is probably the biggest differentiator and is due to the accreditation process for the business schools.
• Somewhat less flexibility in course offerings; fewer types of classes but can be more in-depth.
• Shared funding and faculty. Finance faculty tends to be finance faculty first and financial planning second.
• Depends on the research level of the institution, but there can be more emphasis by faculty on their research than actually teaching.
• Schools may have bigger name and nationwide recognition.
• Can be more sales, entrepreneurship and finance focused
• Not affiliated with business school (NAWBS) –
• Typically more RIA Independent wealth management type career track centric
• More often built around pursuing a career in that field, such as pursuing the CFP® certification and becoming a lead advisor.
• First financial planning class typically taken much earlier than junior year. Can sometimes be the first semester if student declares financial planning major at matriculation. This sets the path much earlier on and gets them jazzed up earlier and gives more time for more internships prior to graduation.
• Currently there tends to be a heavier emphasis on non-quantitative skills and more qualitative skills such as counseling, family dynamics, listening, behavioral finance, peer one-on-one activities through counseling clinics, etc.
• Are widely viewed as not as academically rigorous as AWBS programs within academic circles.
• Can have less recognition and perceived prestige than AWBS programs.
• Obviously depends on the individual institution, but acceptance standards might not be as high as AWBS.
• Often has designated Financial Planning faculty.
• More likely for an internship to be required as part of curriculum.

As you can see each type of program is unique in its offering. I hope at some point to be able to pinpoint exactly which type produces the best Next Generation financial planner, but it’s currently far from clear cut to me and it’s probably going to take a few more years of data to be able to make an objective determination. Until that time, firms should carefully review their business model, what they seek in a candidate, what the core values and goals of the firm are, and what ideally they want their new hire to be doing on a daily basis and work backward to help determine what education a new planner candidate will need to be successful in their firm. Here are some questions for firm owners to consider when evaluating candidates to help ascertain what type of graduate is best for them:

• Have you completed an internship?
• When did you take your first financial planning course?
• How many courses outside the required six to sit for the CFP® exam did you take?
• How many of your instructors were CFP® certificants? How many have/had their own financial planning firms?
• What is the minimum GPA you had to maintain to be admitted and continue in the program?
• How many of your peers have taken/are taking the CFP® certification examination?