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Each year I spend several days visiting various Certified Financial Planner Board-registered programs throughout the country to ensure that as an industry, we are continuing to source, screen and integrate the best available talent for the financial planning firms we represent. Last month, I visited three programs: Virginia Tech University, University of Missouri and University of Wisconsin. (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 presentations to help the students understand the financial-planning world they will be entering.
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.
- 100% were dressed appropriately for an interview, up from 90% last year.
- 70% had a good idea of what type of firm and role they were seeking, up from 60% last year.
- 50% followed up with a thank-you note, about the same as last year.
- 75% had internship and/or work experience in the profession.
- 50% were willing to relocate, down from 80% last year. Chicago, Washington D.C., St. Louis and Kansas City were the areas where candidates were seeking positions, not surprisingly.
However, while there are some great new planners ready to be hired, there are also a lot who are not well prepared to enter a professional planning firm.
- Only 80% brought a hard copy of their resume to the interview, and few had business cards.
- No candidates brought a copy of a financial plan or financial-planning project they had completed. One candidate did provide a copy of a completed personality assessment.
- Few had a thorough understanding of business models, compensation structures, licensure requirements, recent legislation (Dodd-Frank) and industry issues.
- Some thought they had to go into banking or insurance sales for a few years prior to entering financial planning.
- Not all students enrolled in these programs were seeking careers in financial planning. Several were looking to start their own franchises and enter businesses unrelated to the financial-planning profession.
Some additional observations:
- Several of the top candidates I interviewed did not want to go into the high-net-worth client space. Instead, they wanted to work with lower- to middle-income clients via non-profit or government agencies.
- I have seen in past years that large brokerages and warehouses are competed with registered investment advisors for the same new-planner talent. This year, I also saw several of the big four accounting firms interviewing for financial-planning talent.
- Last year, I estimated the ratio of female-to-male new planners in my presentations and interviews to be 20% (very similar to the CFP board demographic stats), but this year it was closer to 40%.
- Contrary to media reports, financial-planning programs are maintaining enrollment numbers, with no significant growth, especially at the undergraduate level. The programs I interact with daily are reporting total enrollment between 50 and 200 students, depending on the size of the program, and graduate only a small number each semester compared to more established majors such as finance and economics. This is where the profession is feeling the pinch, as those majors are sending more candidates into the job market. There simply are not enough students coming out of high school picking a financial-planning major at this point.
- Two schools I spoke to about a possible visit declined. One said there was no time in the semester for my visit, but the other said, “You recruit for sales positions, and we do not want our students taking that path.” The timing issue is understandable, but the latter is troubling. The positions we recruit for are salaried support positions, at least initially, working with established clientele and with specified career tracks available. The comment I received shows how much control the professors have over a student's business-model selection and career choices, though.
- One student, who attended a school I did not visit, said the “kids“ at his school were studying financial planning because "they couldn't make the grades in the business program." Another student, from a school I did visit, said the perception of her friends is that the financial-planning program is a "safety school or back-up plan. … It is not a very highly regarded job field right now." I had to take the rest of the day off when I heard this - ouch! But it does confirm what I have seen at some programs and what some firm owners have expressed over the years publicly and privately.
Caleb Brown, MBA, CFP® is a past president of FPA NexGen and Partner in New Planner Recruiting LLC, a recruiting firm that places financial planners in financial planning firms nationwide. He can be reached at www.newplannerrecruiting.com.
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