It’s no secret that financial advisors are overwhelmingly white and male. So when the College for Financial Planning began awarding
Now results from the first crop of 20 scholarship recipients are in, and they look promising.
Of 18 recipients who began studying last year, 14 completed the coursework in December 2021 — a completion rate of nearly 80%, almost double the typical 40% for others who do their CFP prep through the educational and test preparation company. Six recipients then passed the CFP exam offered this March, with the remaining eight planning to take upcoming exams.
The College, based in Centennial, Colorado, awards the scholarships three times a year, with 20 recipients per round. Each $7,641 grant covers the full cost of a one-year program for CFP certification study, consisting of nine months of coursework and three months of exam prep review. With many companies in the wealth planning industry offering tuition reimbursement programs to employees, the biggest obstacle for those aiming to become planners is often the cost to earn a CFP certification, the gold standard in the industry. The scholarships aim to help eliminate that financial barrier.
The program has emerged as America
Still, out of 93,032 certified financial planners, more than eight in 10, or 82.9%, are white, and nearly eight in 10, or 76.6%, are male,
That means women make up fewer than one in four, or 23.4%, of financial planners. Fewer than two in 100, or 1.8%, are Black or African American, while 2.7% are Hispanic or Latino, and 4% are Asian or Pacific Islander.
“The biggest glaring challenge in the industry is bringing in new financial planners and financial planners with diverse backgrounds,” said Dirk Pantone, president of the College for Financial Planning. “That’s why we created this half-million-dollar-a-year initiative, to really bring in new planners to the industry.”
A 2019
Cory McCruden, results strategist and entrepreneur in residence at Yale Ventures, explained that these first results can be used as a key data point to gauge the program’s impact.
“We need more diversity in the financial advice industry, so any program supporting that goal is critical,” McCruden wrote in an email. “Now that we have a baseline, since this was the first year of the program, it will be important to see how the program can continue to help even more diverse candidates be successful in the future.”
A baseline
The College will soon receive results from the second cohort of scholarship recipients. Eight of those 20 individuals have completed the coursework and now all plan to sit for the July CFP exam. The third cohort is still taking the course.
“You can just pick any company you want — Charles Schwab, State Farm, Northwestern Mutual, it doesn’t matter — they all have tuition reimbursement plans or they all have some sort of incentive plan for students to get through the program,” Pantone said. “So the biggest barrier for people outside of the industry is the $10,000 to go through the education program and book the examination. And so that was really where we started this initiative from.”
Danyell Davis was among the first cohort and said that the grant removed the financial barrier to becoming a CFP for her. She plans to take the upcoming exam in July.
“It’s nice to have been afforded an opportunity to receive this diversity scholarship and not have to go get in more debt and not have to go get more loans,” Davis said. “I really do think it eliminated a barrier of entry into becoming a CFP by eliminating that financial burden.”
As a financial coach for the National Financial Literacy Campaign, which aims to financially educate families across North America, Davis decided to pursue the credential to expand her own financial knowledge and better serve her clients with “holistic financial planning.” From the time she entered the industry almost eight years ago, however, the lack of diversity among CFPs and in financial services has been clear to her.
“As an African American woman, I represent two of the most underrepresented populations in financial services and with CFPs,” Davis said. “I really do believe that we need more women and more minorities in financial services and as CFPs.”
Anu Brookins, an investment advisor representative at SmartPro Financial in Bradenton, Florida, was also in the first cohort. She passed the CFP exam in March.
“A lot of people that I was seeing in the financial planning profession were white, and they were in their 50s or 60s or older,” she said. “I didn’t see a lot of people like me. And so it was, ‘OK, so there is room for diversity, there is room for growth in diversity.’”
Though Brookins had passed the series 6, 65, and 63 FINRA qualification exams for variable contracts, investment advisor law and securities law, she felt that becoming a CFP would allow her to better serve her clients. Like Davis, Brookins said the scholarship helped to relieve the financial burden of becoming a CFP.
“I didn’t have $5,000 or $7,000 available for me to go take an educational program, and I knew that I had to take an educational program for me to be able to be ready for CFP,” she said. “It was such a load off of my shoulders when it came to being able to pay for the CFP educational program.”
Another newly minted CFP from the cohort is Andy Leung, a vice president at wealth management firm Procyon Partners in Shelton, Connecticut. Leung, who had previously worked at UBS, said he pivoted to financial planning because he wanted to help Asian Americans and veterans — two populations he identifies with as a third-generation Chinese American who served in the Marine Corps for seven years.
“I felt like there were two groups that I could really help out and hopefully provide a lot of value and professional services,” he said.
'The most useful'
Leung said he was drawn to helping Asian American clients because “a lot of people aren’t as knowledgeable” about financial planning, “whether it’s U.S., regulations or just personal finance and how to save money and how to be disciplined and how to plan for retirement.”
Military savers also need help with their finances, he said, adding, “They need to focus on their day job and what they’re doing and allow someone who works on finances and has their best interest in mind to help them plan for their future.
Before entering the program, Leung already held various FINRA-required credentials on national commodities futures, general securities, equity trading and uniform securities state law. Even with these certifications, Leung said the CFP certification was the most useful for serving his clients.
“I definitely found of all those certifications that I had received prior, the CFP had the most practical application of any of the exams that I took in that all the things, all the different topics that we had to learn, are very much applicable to better serving our clients,” Leung said. “You definitely felt like you were studying for a purpose, and you definitely were going to be better equipped to serve your clients after studying for the exam.”
Davis said that the scholarship program is an example of how financial organizations can bring in more people from underrepresented groups to the industry.
“The first step is being able to educate people and allow them to know about the field and allow them to know about this certification,” she said. “That is what is opening the doors for more minorities and more women to enter this field and to have the opportunity to get the CFP.”
McCruden noted that bringing in more diverse financial planners is important for serving clients.
“It’s important that the people that represent the industry also look like and can relate to the customers they serve, which is why programs like this one are so important,” she wrote in an email.
As programs like this try and improve the state of representation in the industry, Brookins said that expanding diversity was crucial for financial planners.
“We need to have people who provide service to not be differentiating based on whether the person is of a different color of skin, whether the person is [of] a different national origin, religious origin, different part of the LGBTQ community, all of those things,” Brookins said. “We need to have more people that are open-minded about that.”
