Recently I’ve been reading and hearing a lot about career paths and career development for the financial planning profession. Financial planning has now reached adolescence and there should be questions regarding this issue.
What should the expectations be for new entrants into the profession? What should the obligations be for those who have built the profession to where it is today? Tough questions! While I do not have all the answers, I have a few observations that could add to the dialogue.
The roots of the profession are in entrepreneurial sole practitioners who left insurance companies and wirehouses to practice in a new way. They had to build most of what they used themselves: software, data books, processes, and systems. What they were not–and are not–particularly good at is building those practices into businesses.
Although financial planning is a profession, it needs to act like an industry. A financial planning industry would have various business models where new entrants could spend time as apprentices learning their trade. Book knowledge alone does not a financial planner make. There would be clearly identifiable career paths with regional firms, local firms, loose partnerships, and large entities.
Acting more like an industry will require mentorship at all levels of career development. Planners must be willing to share business models and to accept the responsibility for their success. Coaches who can show planners how to develop these models are necessary. This is because planners themselves are like physicians: They care deeply about their clients and what they do, but sometimes they just aren’t very good business owners.
The FPA’s Role
The Financial Planning Association has gone a long way in developing programs for entrants into the profession, including internship programs, residency programs, testing aids, ongoing technical and practice management education programs, and networking opportunities. But we recognize that this is just the beginning. The FPA now must play a critical role in encouraging coaches, mentors, and leaders to take financial planning from an emerging profession to an industry-like platform with room for the wide variety of business models.