The roots of financial planning are in those insurance agents and stockbrokers who sought out a way to deliver better advice and guidance to their clients. Similarly, the roots of financial planning education have long been in ‘adult education’ certificate programs that took experienced and active advisors back to school to gain the educational knowledge they needed to sit for the CFP exam and earn their CFP certification.
Over the past decade, though, we have witnessed the emerging rise of the ‘financial planning academic,’ those pioneering students who went through the first Ph.D. program from Texas Tech, which was supported in large part by an early $2 million grant from the CFP Board with the specific vision of supporting a growing population of financial planning academics. Having earned their doctorates, these academics are now beginning to go forth and establish undergraduate, graduate and Ph.D. programs at other universities across the country. As the trend continues and the Texas Tech/CFP Board vision is fulfilled, the number of university-based financial planning programs continues to grow, and financial planning is well positioned to gain more academic credibility.
As the financial planning academic community continues to grow, so too are the resources serving them. From the Academy of Financial Services, to the recently re-introduced academic track at the FPA annual conference, to the CFP Board’s latest round academic initiatives, including a new ‘think tank’ financial planning research center and a new academic journal, financial planning is well positioned to continue its drive forward towards increasing academic rigor and recognition. That is likely to include not only a rising volume of college-educated financial planners but perhaps research that will slay a few financial planning sacred cows and help to advance not only the financial planning body of knowledge but how it is applied by practitioners.
The Rise of Financial Planning University Programs
To see where we may be going, let’s first look at where we’ve come from. The first class for CFP certificants dates back to 1973. However, the reality is that for its first 15 years, the education of financial planners was the domain of adult education programs, specifically, the early version of the College for Financial Planning. The educational track was developed for those who had been in the industry for years already as a life insurance agents or stockbrokers who wanted to transition his/her practice towards financial planning. In 1985, the CFP Board was officially spun off from the College of Financial Planning to become a standalone organization to maintain the CFP certification standards, and once separated an increasing number of schools were allowed to become CFP Board registered programs, with the first 20 universities recognized in 1987 (see the IBCFP announcement at the time!).
While the number of financial planning programs in degree-granting programs grew in the early years, the pace was slowed significantly by several factors. The first was the general lack of recognition of financial planning as a bona fide profession unto itself, and a perceived lack of rigor that was associated with it. As a result, early financial planning programs were primarily in school divisions ranging from ‘agricultural economics’ to ‘life sciences’ rather than in finance or business programs. The second challenge to financial planning programs at degree-granting institutions was the lack of a credible ‘terminal degree,’ academia-speech for a Ph.D. end point, for those who were teaching financial planning and creating programs. Simply put, it would be difficult for financial planning to ever be fully recognized as such in academia as long as there were no financial planning Ph.D. academics to lead them; of course, the classic chicken-and-egg program was that few programs had any interest in developing a Ph.D. program, either.
Nonetheless, in 2000 the first Ph.D. program in financial planning emerged, from Texas Tech University, and gained momentum 2 years later with a significant $2 million grant from the CFP Board itself. One of the stated early goals of the program was to begin to grow a base of ‘financial planning academics,’ Ph.D.s in financial planning who could go forth and start or lead financial planning programs at other universities and colleges, and raise the academic profile for financial planning itself.
The Rise of The Financial Planning Academic
Since the Texas Tech Ph.D. program started, it has gone on to mint 30 Ph.D.s (and nine more who have done everything but their dissertation, or ‘ABDs’), many of whom have been instrumental in launching or sustaining what are now five Ph.D. programs in financial planning. Those programs are at Texas Tech itself, at the universities of Georgia and Missouri, at Kansas State University and most recently at Louisiana State University (now the first CFP Board-registered financial planning Ph.D. program in an AACSB-accredited business school).
The CFP Board has reported that there are three more Ph.D. programs in development. Texas Tech graduates staff not only four of the five current Ph.D. programs, but have also been instrumental in the development and support of several undergraduate CFP Board-registered programs as well, from Utah Valley University to the award-winning students at William Patterson University in New Jersey. Consistent with the original vision to support the growth of financial planning academia, nearly 90% of the Texas Tech Ph.D. graduates remain in academia growing and supporting programs; only about 10% have gone on to ‘private industry’ jobs.
The shift of financial planning towards more degree-based institutions has been significant over the past decade. It took 15 years from the first 20 institutions to grow to approximately 54 degree-based institutions when the Texas Tech Ph.D. program launched (in addition to even more adult certificate-based programs), and there are now 95 degree-based institutions offering financial planning programs (many of which offer several programs at the undergraduate and graduate levels).
Over the last four years alone, the number of Baccalaureate programs has increased 33% (while the total number of certificate programs has been stagnant), and of the 54 potential financial planning programs currently in development with CFP Board, the majority are baccalaureate programs within AACSB-accredited schools of business and finance.