What was your major in college? Ask that question and you’re likely to find out something interesting about a person — regarding their areas of interest, habits of thought, and past or present ambitions.
Often a major matters greatly in determining a career path, and not necessarily in a predictable way. Consider Defense Secretary Ashton Carter. He has written of how, as a Yale undergrad, he took a double major in the disconnected subjects of physics and medieval history. Their appeal lay in being so different. Moreover, in his words:
“As far as course choice was concerned, I had no interest in between the extremes of medieval history (history, language, philosophy) on the one hand, and science (physics, chemistry, mathematics) on the other…. I have taken exactly zero social science courses in my entire life. My arrogant view at the time was that life would eventually teach me political science, sociology, psychology, and even economics, but it would never teach me linear algebra or Latin. It seemed best to get my tuition's worth from the other topics and get my social science for free!”
In Carter's case, the physics major led to being a physicist, which led to becoming a nuclear weapons strategist and eventually the Pentagon chief.
The question of how college majors shape educational and career outcomes deserves close attention, especially amid growing concerns about how well — and at what cost — higher education is preparing graduates for the job market.
Financial advisors should take a particular interest in the subject of majors for two reasons (in addition to the obvious concerns they may have as parents). One is its relevance for conversations with clients about how families can get their educational money's worth. Such conversations may focus on assessing 529 plans, but advisors able to provide broader input on educational paths may find that is a service appreciated by clients.
Secondly, advisors have a big stake in ensuring an impressive talent pool is flowing into the advisory field, especially amid industry tumult driven by technology and regulation. In choosing interns, employees, colleagues and ultimately successors, advisors must consider questions of educational background, including: Which major or majors are best suited to prepare future financial advisors?
A recent report from Georgetown University's Center on Education and the Workforce, titled “The Economic Value of College Majors,” delved into a wide array of data about different majors — how popular they are, how likely to lead to grad school, and, strikingly, how much they vary in earnings power in the job market.
The report showed that majors in STEM (science, technology, engineering and mathematics) fields tend to have the highest earnings, both as entry-level workers and later in their careers. STEM majors had median earnings of $76,000 during ages 25–59, compared to $61,000 for college graduates overall.
Two other broad groupings of majors, labeled health and business, respectively — each registered a $65,000 median for ages 25–59. By contrast, arts, liberal arts and humanities majors had a median of $51,000, and majors in teaching and serving (including psychology and social work) averaged $46,000. The comparable figure for high school graduates was $36,000.
There was considerable variation within these wide categories. The top earning major of all was petroleum engineering, which at a $136,000 median far outpaced even other STEM majors. Neuroscience majors, by contrast, had a $44,000 median. Among business majors, management information systems and statistics was the top earner at $77,000, followed by business economics ($75,000) and finance ($73,000). Hospitality management ranked lowest in the group, at $52,000.
Within the social sciences, economics was the highest earning major, at $76,000; political science and government came in second at $64,000, while anthropology and archaeology were at the group's bottom with $49,000. History was the top earner among humanities majors, at $54,000.
Now, of course, prospective earnings are not the only consideration in choosing a major, as being interested in the subject is essential. Plus, consideration must be given to how a major's earnings prospects might change over time, including how the target field is evolving. For example, the incomes of petroleum engineering majors are likely to be quite sensitive to price shifts in the oil market.
It is also worth considering that the current popularity of a major may indicate a future excess of workers in a given field. Interestingly, the third highest earning of all majors, metallurgical engineering ($98,000), was one of the least common, chosen by only two per 10,000 students. Choosing a road less traveled may be a good way of finding opportunities others have missed.
The College Board, at its career website “Big Future,” provides lists of related majors for various professions. For the category of personal financial advisors, the majors given are: accounting; applied mathematics; business administration and management; economics; finance; and statistics.
Certainly, those are all reasonable choices for a future advisor. However, getting ready for a fast-changing field — as well as making one's résumé stand out — may be aided by making a less obvious choice of majors, or by choosing a double major or minor to round out one's education.
This would not necessarily mean something as esoteric as Ashton Carter's physics-medieval history combo. Consider some of the practical-minded ways an aspiring advisor might prepare for the future.
A strong background in computer science, for instance, could be a valuable asset to advisors whose competitors or team members may be robo-advisors. An advisor with expert knowledge of such programs and their limitations would be a reassuring figure for clients faced with choices of human and automated advice.
Similarly, an advisor who brings foreign language and geographic knowledge to the table could have an advantage in attracting clients who are immigrants or expatriates. An advisor with a molecular biology degree might be well positioned to serve clients or track investments in an expanding biotech sector. An advisor who majored in art history might carve out a lucrative niche in art investment.
As a journalist (who was an economics and history major), I would advise a young person aspiring to my field to consider majoring in something that's not journalism. I’d say that specialized knowledge of a different field will give you something to write about, differentiate you from other journalists and provide backup options at a time when journalism is a notably difficult job market.
Journalism and financial advice have many differences, but both are fields that once provided more predictable ways of making a living than they do now. If I were hiring in either field, I’d be very interested in people whose education and background suggest an ability to keep their footing on shifting ground.
--- Related on ThinkAdvisor: