Want to be a certified financial planner? Pursue another credential first.
A recent study from the
Authors David Mannaioni, Aman Sunder and Rebecca Henderson, who are all affiliated with the Kaplan-owned school, looked at 14 years of CFP enrollment and performance data. They found that students who performed better in less rigorous financial designation courses saw the same kind of success in the CFP program. Similarly, those unable to handle the demand of such designations usually performed poorly when pursuing their CFP.
Researchers also found that certain designations, such as the College for Financial Planning’s own Foundations in Financial Planning (FFPN) program, enrolled a higher percentage of female and Black students than the CFP program. Between 2005 and 2018, 57% of FFPN students were women and 7.3% were Black, up from the 29% and 3.1% found among CFP hopefuls.
But a weakness of their study, Mannaioni said, is the unobserved ability of the enrolled. The reality is, a “good student is a good student,” and those who earned high marks in the CFP education program did not necessarily do so because they had other designations under their belt.
“But I say that's mitigated by the fact that, so what? If someone is unsure, this can help,” said Mannaioni,
No right way to do it
The idea of walking another path before sprinting toward a CFP certification was one that spoke to South Carolina-based advisor Brittany Wolff. After more than four years as a financial planner at Raymond James,
Before she was a planner, Wolff started immediately out of college as an assistant at Raymond James. She knew she wanted to help people as an advisor, but the time and cost of the CFP education program was beyond her reach as a recent grad with a full-time job.
Instead, she decided to get her Accredited Asset Management Specialist (AAMS) certification. (Like the FFPN, the AAMS is offered by the for-profit College, not by the nonprofit Certified Financial Planner Board of Standards, which administers the CFP.) In a fraction of the time it would take to complete the CFP program, Wolff said she learned what it really means to work as a financial professional on a daily basis.
“The Series exams don't teach you anything about that, so just to be able to get that additional education along with the added confidence that I had something behind my name was important,” Wolff said. She added that because she completed AAMS coursework, she was able to opt out of certain CFP courses and hasten the process when she did eventually get her CFP in 2021.
But beyond the ability to knock a few courses off of the pile, Wolff said the pursuit of her AAMS taught her more about the industry as a whole and strengthened her resolve to push forward when things got tough.
Aware that the financial industry is designed with men in mind, Wolff’s firm is now focused on serving young professional women and families in need of trustworthy advice as they plan for the future. Wolff is passionate about seeing diversity in the industry improve, and believes great strides can be made by letting potential planners of all backgrounds know there is no “right way” to become a CFP.
“There is misinformation that you need a finance degree or that you need a lot of experience in the financial world in order to be a financial advisor. Well, I don't have a finance degree, and I know many people in the industry that don't,” Wolff said. “I really had no clue that financial planning existed before I got into it. I just thought it had something to do with the stock market, and that doesn't sound intriguing to a lot of people.
“But what does sound intriguing is being able to sit down with someone and truly help them through some of the biggest events in their life and build a relationship. And that is completely different than sitting down and crunching numbers.”
The power of shared experience
Financial planner Jay Zigmont, founder of the Water Valley,
Zigmont launched his RIA last summer after a decade in coaching, academia, and healthcare. He used his PhD in adult learning to help organizations develop programs to support disenfranchised youth and improve workplace diversity.
He explained that creating ladders to careers increases diversity by lowering the barrier of entry. If done consistently and intentionally, it can make the unlikely seem commonplace and widen the pool of potential candidates.
“Bridge” certifications like the FFPN or AAMS also allow people to gain experience and income along the way.
“It makes perfect sense that accomplishing a certification such as the FFPN may increase success in the future as it provides a framework for additional education,” Zigmont said. “The downside is that these certifications may not be recognized by clients or businesses. Workforce development programs widely need to be tied to employment to show real success. It becomes a question of value or ROI on another certification.”
Zigmont, who said he grew up broke and without any financial education beyond balancing a checkbook, became a planner because he was on a mission to help people like him. He and his wife are “childfree,” meaning they represent the roughly 11% of Americans over 55 who have made the decision to never have children.
His commitment to specialize in what he calls “childfree wealth” developed while pursuing his CFP certification. Zigmont said he did not see his experience reflected in his training, noting that most of what he was taught was based upon life events that will never occur for the childfree.
“I wonder if it is the same for other underrepresented groups. Does the CFP education process and examination reflect diverse lives and approaches?” Zigmont asked. “It may be that for some groups, the education and recommendations just don't feel right.”
Zigmont said every day, he provides advice to childfree couples without any of the unintentional pushing or judgement they may encounter elsewhere. His clients never have to worry about him prodding them to create a backup plan in case they “come around” to having kids, or encouraging them to start that college fund “just in case.”
Shared experiences are a key component to building real relationships with clients, and with more diverse experiences represented across the industry, Zigmont believes long standing barriers will finally begin to crumble.
Wolff has a similar stance, noting that the idea of finding a financial advisor who understands their perspective can be an intimidating endeavor for someone with no prior experience managing their money or investing.
“From the client side, they are just relieved to be able to find people who look like them and to be able to talk to somebody who's not talking down to them,” she said. “If we can make ourselves more available to the groups that were in — be it based on gender or culture or ethnicity — I think it will allow us to create better financial literacy for everyone.”
A long way to go
Mannaioni says there is still a lot of work to be done in terms of researching the core contributors to the industry’s diversity problems.
In addition to understanding why women and people of color are often steered away from a career in wealth management, there are questions to answer related to support and retention once they begin their journey.
He also believes that the CFFP and other entities offering this kind of education can do a better job of reaching those underrepresented groups, and letting them know how rewarding a career as a financial advisor can be.
“Once upon a time I was a recruiter for a firm, and what I always told people about getting into this industry is that it's hard work. Especially at first. But if you do the work, it will pay off as those of us who have survived into the industry know,” he said. “This is one of those very rare professions where you get to do very well while also doing a lot of good. So I really hope this (study) gets more firms more intentionally active in recruiting women and minorities.
“It’s simple. If we had more minority advisors we'd have more minority clients, and there's a whole world that needs to have better financial advice.”
