The Real Blocking Point In Growing Financial Planning: Lack Of Awareness

(Michael’s Note: The video below was recorded using Periscope, and announced via Twitter. If you want to participate in the next #OfficeHours live, please download the Periscope app on your mobile device, and follow @MichaelKitces on Twitter, so you get the announcement when the broadcast is starting, at/around 1PM EST every Tuesday! You can also submit your question in advance through our Contact page!)

#OfficeHours with @MichaelKitces Video Transcript

Michael: Welcome, everyone! Welcome to Office Hours with Michael Kitces!

As you can see today, I am not alone. I have a guest...I was going to say that I brought a guest, but actually, I've come to you as the guest, as we're here at the CFP Board's Academic Research Colloquium...did I get the name right?

Kevin: You did. The first.

Michael: The first. The inaugural Academic Research Colloquium, which is a new event that the CFP Board has brought together through their Center of Financial Planning in order to bring academics together. And one of the big focal points for the Center of Financial Planning in the first place has been trying to do research around how do we bring more people into financial planning.

Today, I'm going to let Kevin Keller, CEO of CFP Board, talk a little bit about some of what they're finding in the research around growing financial planning and bringing new people into the field. Because, as we're learning from the research, the problem is not quite what we've always thought. Typically we've talked about how we need better career tracks to attract and retain talent, and how the ability to hold onto to good people we have is what matters. But as it turns out, those aren't the biggest issues in getting more young people into financial planning.

Kevin, can you talk a little bit about what you've been finding in the research on this?

The Real Key To Bringing More New People Into Financial Planning

Kevin: Absolutely, Michael.

I think career tracks and some of those things do matter. But one of the biggest challenges that we have in bringing new people into the profession is just the fact that people are not aware that this is a profession that exists. That there are good jobs in financial planning. That there are, increasingly, opportunities in big firms and small, for individuals to pursue financial planning jobs. So we've been working on that.

Michael: I feel, it's the funniest thing, we spend all this time talking about what more we can do with career paths and hiring and all the rest. Obviously, that's important; I've spent a lot of time on those issues myself.

But it turns out we're failing at step one! Which is to make people aware that financial planning exists!

Kevin: Absolutely. And you know, we've been working on a number of different initiatives to increase the awareness.

Even something as simple as the CFP Board's public awareness campaign itself has been important in raising the awareness of an opportunity as a financial planner...and so, we know that when we go on the air with the DJ ad...

Michael: The infamous DJ ad. Which I love. I still think it was a fantastic commercial. I know it's been very controversial out there. But it makes the point; people, literally, sometimes can't tell the difference between a DJ dressed in a suit, and an actual trained and educated financial planner!

Kevin: We know when we're on the air, that requests for the Guide to Certification actually spikes and goes up.

So the public awareness campaign is one of the first in growing awareness not just of CFP professionals, but the opportunity to become a CFP professional. Many of those people obviously don't follow through, but it increases awareness.

But there's so much opportunity. I've heard you talk about how the need for financial planning has never been greater. And so, there's really a need, there are jobs out there. You know, you've heard the statistic, you've quoted it, we have more CFP professionals over...

Michael: More CFPs over 70 than under 30. It's a painful statistic!

Although to CFP Board's credit, as I've been tracking the numbers (because that's the kind of data I love to look at), those numbers are actually getting close. It is possible that sometime this year, we will no longer be able to say there are more CFPs over 70 than under 30. Which is a big change; I think it's been true "forever", or at least it's been true for decades, that we had more older financial planners than younger financial planners. The tide is turning, at least.

Kevin: It is turning. We had over 1,000 people from baccalaureate programs sit through the CFP exam this past year. And that was up from 700 the previous year.

Michael: To me, it's amazing to have 1,000 people sitting for the exam. When I think the total count for CFPs under 30 is still only between 3,000 and 3,500 or so. So it's not only that you pass the exam...

Kevin: You do watch the numbers?

Michael: Oh, I really do watch CFP Board numbers, yeah!

Now obviously, not every student that takes the exam immediately gets their CFP, because they still have to get their experience requirement. And then, unfortunately, we still have some people that get far enough to complete the exam, but then we lose them before they can complete the experience requirement. They can't find a job, or they don't get a good fit, and get burned out of the industry. But having more students sitting for the CFP exam is a major improvement in the pipeline, and is really encouraging. And getting there was an awareness issue!

New CFP Board Programs To Build Professional Awareness

Kevin: And so, we're doing a number of things to grow awareness. So we will launch in April our "I'm a CFP Pro."

Michael: I'm a CFP Pro...

Kevin: I'm a CFP Pro.

Michael: Is this going to be a social media hashtag thing, where you say "#ImaCFPPro?"

Kevin: It will be. And here's what we're doing. It's a play to both gender and racial diversity. So we'll be featuring diverse CFP professionals. It follows the saying that you cannot be what you cannot see. And so, we want to feature people of color, women, CFP professionals in a variety of different settings.

Michael: Because I know that's been a challenge for us. For a  long time, the number of female CFPs has been 23%. It's basically been the same 23% for 15 or 20 years or so. It's not going up and it's not coming down. It's just stuck.

Kevin: And we're working hard. We had the most new female CFPs in 2016 that we've ever had. And yet, the growth rate of female CFPs was exactly the same as our overall numbers have been.

Michael: And I'm going to presume the statistics around racial diversity just unfortunately looks even worse?

Kevin: The numbers are awful.

But let me tell you a couple things we're doing there, too. So we're working with Rock the Street, Wall Street to expose girls in high school to career opportunities in financial planning. We are working in investing girls, we did a program with FPA in Baltimore as a kind of a pilot, working with the National Council of Girls' Schools, building awareness down in the high schools.

Michael: So... this is a long play. For the long-term challenge.

Kevin: It is a challenge. And you know, if I had to meet quarterly earnings, we would not be making these kind of long-term investments, because these are going to take a while.

In addition, we announced recently our Massive Open Online Course, a MOOC, with the University of Illinois, on "Financial Planning for Young Adults".

Michael: And that's the one through Coursera?

Kevin: Yes. The main objective there is to expose people to financial planning, but heavily embedded in there are messages that this is a career opportunity, too.

Michael: So... wouldn't it be neat if you not only enjoyed this financial planning knowledge for yourself, but used it to help other people, too, while you're learning!?

Kevin: Yeah, absolutely. And so, a number of our initiatives, we have mentoring... our Women's Initiative, and the WIN-to-WIN Mentoring program. We've got almost 500 people, mostly females, who've agreed to be WIN ambassadors. We have a toolkit for them, and they can go out and speak to their local girls' clubs and their alumni associations about financial planning careers. So we're working on a variety of different fronts.

Michael: So for advisors who are listening and may be wondering, "How do I help move the ball forward...?"

I guess part of the takeaway is that volunteer work you do inside the profession is great to support. But our biggest blocking point to growing the profession is simply that young people just don't have any clue who we are and what we do!

And I guess it's not exclusively young people, as we still have a lot of career changers coming into financial planning as well. But people don't know that financial planning exists. Either they don't know at all, or they think we're "Wolf of Wall Street" because, unfortunately, that's pretty much the only way financial advising is portrayed in the media...

Kevin: That's right.

Michael: So what can advisors do to help? Should we just be trying to get into our old alumni associations and colleges, and saying "I just want to come in and share for an hour with the students, 'Here's what I do for work'" just to tell people about financial planning?

Kevin: I think that is it. And our women's initiative, the WIN-to-WIN Mentoring opportunities.

In addition, we're here at the Center for Financial Planning Academic Research Colloquium, and we have a dire shortage of faculty to teach and lead our programs. So we're taking the long view, as you say, and we want to help advisors, CFP professionals, tell the story about why financial planning is such a great career.

Michael: So for some advisors, that may literally be an opportunity to go and teach financial planning to build awareness, if you want to get into a program. I'm sure the CFP Board team will be happy to talk to any advisors who want to work with your local college or university to launch a new CFP program!

Kevin: Absolutely. Dr. Charles Chaffin and our team would welcome that opportunity.

New CFP Board Program In Learning To Teach Financial Planning

And we just announced, coming this May, our first teaching certificate program with Columbia University, for people who may have an interest in teaching financial planning.

Michael: Teaching...a certificate in how to teach financial planning?

Kevin: That's correct. Right. Because CFP certificants already have the subject matter expertise, but may not be competent at teaching...

Michael: Right, because knowing how to actually teach a course is a different skill than just knowing the subject matter.

Kevin: It's a week-long program. We filled 50 seats at Columbia with this first session. It's full. We have another one next January of 2018, coming up as well.

Michael: All right, so if you're an advisor who is thinking about teaching, you've got a year to start gearing up for your teacher career!

Kevin: Right.

Michael: I have to admit, this discussion about awareness makes me giggle a little, because I think back to some of our prior controversies with the CFP Board. You had a predecessor CEO before you, who got a lot of flak around 2006 because she had proposed the idea, "Wouldn't it be interesting if we could somehow get a TV show that featured financial planning?" The suggestion was something like "Wouldn't it be cool if we could have 'Friends,' but one of the friends is a financial planner?"

Kevin: That might sound crazy but I think...

Michael: I feel like we've come full circle, in that that when we look out there now...the pawnbrokers show made pawnbrokering ludicrously popular, and the home flipping shows have made home flipping amazing popular. I feel like now, we're actually coming back to the point where maybe our breakthrough moment for financial planning will be when we figure out how to get a TV show about financial planning, or featuring a financial planner. The good version, not "The Wolf of Wall Street" or "Boiler Room" stuff. The good version of financial planning onto TV.

Kevin: Just think about the Home and Garden Network. People are spending a fortune renovating. Couldn't you imagine, built in as part of the show, kind of like the placement..."I checked with my Certified Financial Planner professional, and she said, 'I can only afford this much money.'"

Michael: So I guess the last call to any advisors listening to this, if you want to help, you can either go talk to your school or alumni association, get involved if you want to start teaching a program, or if you know a TV producer...

Kevin: Call us!

Michael: Well, thank you for hanging out and joining me here on Office Hours!

Kevin: Thanks. Very cool.

Michael: I'm glad we could talk about the one biggest blocking point for growing financial planning: the sad fact that most people still don't know what we do. We know in our own little world. We have to do a better job at getting the word out.

So thanks, everyone. Thanks for joining and hanging out with us, and have a great day!

So what do you think? Is awareness of financial planning as a profession still needed? Do you think past efforts to increase awareness have been successful? What do you think the CFP Board can do to increase awareness going forward? Please share your thoughts in the comments below!