Financial Planning Education 101: 10 Standout Schools
Every recognized profession has its top colleges. Medical and law schools in the U.S. date back to the 18th century. As a much more recent profession, financial planning has spent much of the last four decades developing its own system of education and professional certification.
The academic side of planning has certainly come a long way. In December 1969, when a group of 13 financial services professionals met at an airport hotel in Chicago and decided to launch a membership organization and an institution for advisors - the College for Financial Planning, originator of the CFP designation - there were no schools. Today, there are 333 CFP board-registered programs, from certificate programs (183) to undergraduate (103), master's (41) and Ph.D. programs (6).
It was a slow process. A curriculum and an exam had to be established. A code of ethics had to be developed, along with an independent organization to enforce it. Certification had to be separated from education, which happened in 1985 when the College for Financial Planning turned the CFP designation over to the CFP Board of Standards. The board - then known as the International Board of Standards and Practices for Certified Financial Planners - was empowered to grant and to revoke the right of financial planners to use the designation. By 1987, at least 20 schools had registered programs with the independent credentialing organization.
As many of the current crop of planners near retirement, they don't have to look too far to figure out where the next generation will come from. The answer is in all the schools. Not only has the number of programs been on the rise - up 15% since the past year and a half, according to the CFP Board - but enrollment in the programs themselves has generally been increasing, too. There are no national enrollment statistics, but many of the 10 schools profiled in this issue said enrollment has been rising, as much as 108% in the past five years, even at some older, established programs.
With so many CFP Board-registered programs out there, Financial Planning focused on 10 worthy institutions. We talked to veteran planners and industry leaders to get a sense of which 10 programs belonged in an overview. Our list is not a ranking. (We also inevitably left out many high-profile schools, including the American College, which has been educating financial services professionals for more than 80 years.)
We've included statistics on enrollment and information (when schools agreed to share it) on the number of students at each school who sat for the CFP exam so far this year, as well as the pass rate of those students. The CFP Board tracks the national overall pass rate for each exam: for the July exam, it was 52%, and March was 60%. Pass rates for individual schools are self-reported numbers, based on a small sample of two exams so far this year.
Like this survey itself, the information we've gathered is just a starting point. Think of it as Financial Planning Education 101, an introduction.
The College For Financial Planning
Location: Greenwood Village, Colo.
CFP Board-registered programs: 2 - online certificate program and online graduate program for Master of Science degree in Personal Financial Planning
Enrollment: 5,071 in CFP certificate program; 469 in M.S. planning program
Students who sat for CFP exams so far in 2011: 969
Pass rate of those students: 75%
Faculty: 43 (11 full-time and 32 adjunct)
Tuition: CFP certification program $3,885, including materials and fees
M.S. program: $7,140
Web address: cffpinfo.com
The College for Financial Planning, founded in 1972, is where CFP education was born - in fact, in the early years, the college owned the designation. When founders Lew Kearns and James R. Johnston started the school, there were no other educational programs devoted exclusively to financial planning, there were no textbooks and there was no established curriculum or certifying exam.
Instead, there was a small group of advisors who wanted financial planning to develop into a recognized, independent profession. It wasn't going to happen, they realized, unless that profession had academic support and established credentials.
Set up in the beginning for distance learning (correspondence courses, in the pre-Internet years), the college now offers instructor-led online programs for many designations beyond the CFP, including in the areas of asset management and retirement planning. There are graduate programs, including master of science degrees in personal financial planning, finance and financial analysis. Through 2011, the school has had more than 100,000 graduates.
Jim Pasztor, chairman of the College for Financial Planning's graduate degree program and head of his own fee-only practice, says all the faculty members feel strongly about continuing the school's original mission. "We want people who truly believe in pursuing financial planning as a profession," he says. The school places a strong emphasis on dealing with real-world situations and solutions, rather than theoretical ones, Pasztor says.
Cynthia Ghaffari, executive director of capital markets marketing communications for Morgan Stanley Smith Barney in Purchase, N.Y., says she appreciated the college's pragmatic, holistic focus. After completing an accelerated online CFP certificate course at another school, Ghaffari chose to take the College for Financial Planning's live review session in Denver this year, prior to taking the CFP exam.
Instructors "gave a lot of examples of what they were trying to say," Ghaffari says. "Live examples, it wasn't just rule after rule. It was approachable." Ghaffari passed the CFP exam in July.
University of Georgia
Location: Athens, Ga.
CFP Board-registered programs: 5 - College of Family and Consumer Sciences has an undergraduate degree program, master's and doctoral program; Terry College of Business has 2 certificate programs, online and classroom (off campus)
Enrollment: 100 undergraduate, 12 master's, 6 doctoral, several hundred in Terry College online program and 50 in the classroom program
Students who sat for CFP exams so far in 2011: 10 in degree programs, 51 in certificate
Pass rate of those students: 2 graduate students, pass rate 100%; 8 undergraduate students, pass rate 50%; 75% for certificate
Faculty: 5 in financial planning (3 full-time professors, 2 adjunct faculty), 8 supporting full-time professors (3 professors of housing and 5 in consumer economics); 12 instructors for Terry College certificate programs
Tuition: Graduate tuition per semester for in state: $3,600; out of state: $10,950. Undergraduate in state: $3,641; $12,746 nonresident. Most doctoral students and master's students receive graduate assistantships with tuition waiver and stipend. Classroom certificate program is $4,950, or $995 for a single class; online program is $1,995, or $600 for a single class
Web address: financialplanning.uga.edu
Terry College Certificate: http://www.terry.uga.edu/exec_ed/cfp/
For many years, the University of Georgia had an undergraduate major in consumer economics with an emphasis in financial planning. But in 2006, financial planning was approved as a new major on its own and enrollment took off, says Joseph Goetz, program director of the family financial planning program. A master's program and a Ph.D. program were added soon after. Enrollment in the degree programs grew to 118 in 2011 from eight in 2006.
The University of Georgia's financial planning programs are designed to help students transfer real-life experience into learning, Goetz says. The school has a required course (elective for undergraduates) that takes place in the university's own financial planning clinic, called Aspire. Students see clients from the community at the clinic and provide planning advice under the supervision of faculty. Goetz has reached out to other schools and departments within the university so the planning students can collaborate with law students, as well as marriage and family therapy students, in order to provide the most effective counseling possible to clients at the Aspire clinic. "When clients come in, their financial lives may be causing stress on their marriage," Goetz says.
All students are also required to work many hours in the community providing services such as tax preparation, Goetz says. Last year, university students completed more than 700 tax returns for low- and middle-income families in the Athens area, he says. "Those students got direct client contact," and that is the kind of experience the school wants its students to have, he says. One of the concerns for planning firms looking for new hires, he says, is that employees know how to develop a strong rapport with clients and develop trust. While those specific skill sets may not be tested on any certifying exam, "everyone recognizes it's important, and this is UGA's way of saying 'we're working to address that,'" Goetz says.
Location: Boston, Mass.
CFP Board-registered programs: 2 - online and classroom certificate programs
Enrollment: online: 4,457 through September 2011; 5,942 projected for full year. Classroom: 319
Students who sat for CFP exams so far in 2011: N/A
Pass rate of those students: N/A
Tuition: Virtual classroom package, $3,995; online access program $2,295 to $2,895; classroom program $6,365
In the early 1980s, the certificate program at Boston University was competing with the CFP, awarding its own diploma in financial planning, says Bob Glovsky, director emeritus of BU's financial planning program and president of Mintz Levin Financial Advisors in Boston. Glovsky, a financial planner for three decades, was one of the first instructors in BU's program, starting in 1981.
After ownership of the CFP mark was transferred to the CFP Board in 1985, Glovsky saw an opportunity to register the program. He got the green light from the administration - provided he agreed to run the program. He became director when the program was registered in 1987.
In 1988, the CFP Board asked Glovsky to join its board of examiners, and he was part of the group that created the two-day, 10-hour exam. "We felt we needed a comprehensive exam" that was "not just subject by subject," Glovsky says.
In 2002, the school added an online program, "recognizing that people were learning differently," Glovsky says. The online program, initially relatively small, is now nearly 20 times the size of the classroom program based on enrollments.
The online program has rolling admissions, and students have a number of different packages they can choose from, says Ruth Ann Murray, director of the Center for Professional Education at BU's Metropolitan College. There's the online access program, which students complete at their own pace over a period of 18 months. That works just fine for students who have some self-discipline and want or need a lot of flexibility in terms of when they get the coursework done. However, "a lot of people procrastinate," Murray says. Procrastinators might do better with the "virtual classroom" package, an accelerated nine-month program with webinars every two weeks in which an instructor reviews the material and previews upcoming sections. Carolynn Tomin, currently director of BU's program, is also the estate planning instructor in the virtual classroom program and one of the tutors in the online program. There are a total of six instructors covering different areas, such as a retirement and insurance, Murray says.
Even though the BU program is not for academic credit, the courses are "still very rigorous," Murray says. "Our goal is not to teach to an exam, or to teach you to pass an exam. Our first goal is to educate you as a financial planner."
Location: Manhattan, Kan.
CFP Board-registered programs: 4 (undergraduate, master's, Ph.D. and graduate certificate)
Enrollment: 200 (45 undergraduate, 35 certificate, 90 master's, 30 Ph.D.)
Students who sat for CFP exams so far in 2011: 20
Pass rate of those students: undergraduate/master's 67%; certificate 75%; Ph.D. 100%
Tuition: $1,395 to $8,370 annually, depending on the degree program
Web address: ipfp.ksu.edu
In the 1990s, K-State's School of Family Studies and Human Services, which had been long known for consumer-oriented financial research, began to place more emphasis on personal finance for individuals and families, says John Grable, director of the school's Institute of Personal Financial Planning.
At the graduate level, in financial planning, K-State researches and teaches what's called financial therapy, a program that started around four years ago. "We were instrumental in establishing the Financial Therapy Association," Grable says. At the graduate level, that means bringing together planners and therapists, social workers, psychologists and counselors.
"What we found is if you talk to a marriage and family therapist, they'll tell you most families are facing some financial stress," Grable says. However, for the most part, therapists are not trained to help families with their finances. On the other side, there are financial planners who see financial problems causing deep emotional rifts in families, but don't know how to help those families handle the emotions, Grable says. "What if you blended the two together? That's what we're doing at the grad level. That makes us relatively unique."
Esther Maddux, professor in the master's degree program, says most of the graduate coursework is done online, as students often have full-time jobs, and some are based far away. (Ph.D. students, however, must also meet annual residency and international studies requirements.) Maddux teaches guided independent study, which fulfills the practical experience requirement for master's level graduate students.
In keeping with K-State's emphasis on counseling, one student is creating a financial planning guide for family caregivers helping a relative with dementia. Another student is in the military, and through volunteer work discovered huge differences in states' tax treatments of both military service members and their families. The student has created a web-based database that does a state-by-state comparison for tax preparers.
Maddux, who formerly ran a fee-only planning practice in Athens, Ga., is a licensed addiction counselor and certified gambling counselor, and so specializes in the pathological side of financial behavior. That kind of knowledge is not needed to sit for the CFP exam, she says, but "if you're a financial planner, it's an important skill to have."
Location: Online; classrooms in New York and San Francisco, as well as several private corporate programs
CFP Board-registered programs: 2 - self-paced and accelerated/virtual certificate programs
Students who sat for CFP exams so far in 2011: N/A
Pass rate of those students: "Kaplan students in the accelerated certificate program have performed better than the national pass rate" since November 2006, based on a July 2011 CFP Board report.
Tuition: $4,999 for all six units plus live review of accelerated and virtual programs; $3,999 for self-paced program
Web address: schweser.com/cfp
Kaplan, a big name in education and test preparation, naturally has a big presence in financial planning education, too. Though Kaplan didn't necessarily have the earliest online program - the self-paced online CFP program launched in 2002 and the instructor-led virtual program in 2005 - virtual education is a space the company is comfortable in, and enrollment has grown rapidly (up 31% in the virtual program this year from 2010). The company declined to provide specific enrollment numbers.
The instructor-led virtual program is designed to be interactive, says Vice President Joyce Schnur. Students can ask questions, for instance, if they're not getting a point during the live sessions. She says Kaplan has always kept in mind that students are busy - many have families in addition to working full-time.
Accordingly, the virtual program is organized into two-week segments, with two weeks of intense class time followed by a two-week break before the next section starts. "We want to capture their attention. We feel this is the best approach to do that," Schnur says.
The company - officially Kaplan University School of Professional and Continuing Education (or KU PACE) is part of Kaplan Inc., but has gone through several name changes. Kaplan-Schweser is an affiliation that came about through the acquisition of Schweser, a company better known in CFA education.
For now, only the two certificate programs are registered with the CFP Board, but soon, likely in early 2012, Kaplan plans to register its online master's program in finance with a concentration in financial planning.
San Diego State University
Location: San Diego, Calif.
CFP Board-registered programs: 3 - B.S. in Financial Services with certificate in personal financial planning; M.S. in Business Administration with a concentration in financial and tax planning; executive financial planner advanced certificate (graduate credit certificate).
Enrollment: 110 in all programs
Students who sat for CFP exams so far in 2011: 32
Pass rate of those students: 45% to 75%
Faculty: B.S.: 25; M.S.: 18; executive certificate:5
Tuition: B.S.: $3,289 per semester in state, $8,869 out of state; M.S.: $6,970 per semester in state, $11,434 out of state; executive financial planner advanced certificate: $7,416 total cost, including books
Web address: sdsu.edu/finplan
When San Diego State's director of financial planning programs, Tom Warschauer, started the programs in 1980 - the master's program was first, followed by the undergraduate degree in 1982 and the certificate program in 1987 - he wanted to see a business school treat personal financial planning as a subject just as important and worthy of study as corporate finance.
"One of the reasons I came here is that they would allow me to start a personal financial planning program in a business school," Warschauer says. More specifically, he wanted a business school accredited by the Association to Advance Collegiate Schools of Business, probably the most widely respected accrediting agency for business studies.
The business school environment is different from that of a more counseling-oriented financial planning program, Warschauer says. All San Diego State master's students have a series of nine to 15 basic and prerequisite courses that business school students typically have, including a full year of economics, a course in business law and statistics. That allows the school to teach financial planning courses at a higher level, he says.
The result is in some areas, "we can get further" than is possible in other types of programs, he says. However, that's not true of all areas, he adds. The financial planning program at San Diego State only has one class that emphasizes counseling theory and communication, for example, and that area is "important. I'm not minimizing that," he says.
Students in all three programs are eligible to sit for the CFP exam, of course. However, the certificate program is different from many in that it is a graduate credit program, and students who complete it are about half-done with a master's degree by the end, Warschauer says. Another distinguishing feature of the San Diego State program is that students in the master's program have to complete specializations in either wealth management or tax (or both), in addition to financial planning.
That's because financial planners generally can't run a successful business only writing financial plans, Warschauer says. They also need continuing fees from clients in either wealth management or tax management for their businesses to be viable. For students who choose wealth management, San Diego State combines the CFP with CFA preparation. Students who choose to specialize in the tax area are prepared for the Enrolled Agent designation.
William Paterson University
Location: Wayne, N.J.
CFP Board-registered programs: 2 - undergraduate Bachelor of Science in Business Administration/financial planning and certificate program
Enrollment: 30 (undergraduate)
Students who sat for CFP exams so far in 2011: 3 (undergraduate)
Pass rate of those students: 33% (undergraduate)
Faculty: 4 (2 full-time, 2 adjunct)
Tuition: $5,732 a semester in state; $9,314 out of state; certificate program is $4,600, including textbooks
Just three years old, the undergraduate program at William Paterson has generated tremendous buzz in the planning community. In 2010, the first year competing, William Paterson students won first place overall and first place in the Knowledge Bowl and Presentation events at the National Financial Planning Challenge, a competition sponsored by the CFP Board, the FPA, Ameriprise and the Academy of Financial Services. This year, the school tied for second place overall with Kansas State and also won second place in the Knowledge Bowl.
Sam Basu, dean of the university's Cotsakos College of Business, hired a Ph.D. from Texas Tech, Lukas Dean, to start a program that would educate students in a pragmatic way, and give them the kind of training that would make firms want to hire them. "This fits with the mission of the college and the university," Basu says. "We're a rigorous but more applied university. We want to add value to the student base by making them very fit for the professional world."
As with San Diego State, the William Paterson program is run out of an Association to Advance Collegiate Schools of Business accredited school. Dean says the program places a lot of emphasis on practical experience. "We want our students to be 'shovel ready' when they hit the workforce," he says. In addition to theoretical training, students get applied knowledge and training by working on a trading floor at the business school where students learn on software currently in use at big firms (Morningstar and MoneyGuidePro, for example). There are also professional sales labs where students learn how to present to a mock client. The sessions are videotaped and put on DVDs so they can be reviewed and analyzed.
Students are exposed to real professionals as much as possible, and the school's FPA student chapter brings in multiple guest speakers each month.
"We want financial planning firms to hire our students over our competitor schools, so we constantly seek feedback from local professionals about what skills, knowledge and attributes they want their interns and new hires to have," Dean says. "Then we find ways to implement their needs into our existing curriculum."
So far, Dean is only aware of three students who have taken the CFP exam from the program's first crop of graduates. One of the three passed so far. The students "were from our very first class and we were learning as much as they were," Dean says.
He adds that all three have full-time salaried jobs now with firms in New Jersey. "Several of our graduates from last year had their employers offer to pay for a CFP review course as part of their employment package, which should also help increase the pass rate," Dean says.
Texas Tech University
Location: Lubbock, Texas
CFP Board-registered programs: 11, from undergraduate to Ph.D., including minors and dual graduate degrees in financial planning and business or law
Enrollment: 280 full-time majors (125 undergraduates, 120 master's and 35 Ph.D.s)
Students who sat for CFP exams so far in 2011: 34
Pass rate of those students: 38% to 56%
Faculty: 11 full-time and 2 graduate adjuncts
Tuition: Undergraduate, per semester, in state: $3,690; out of state: $7,446; graduate, per semester, in state: $4,290; out of state: $8,046
Web address: pfp.ttu.edu
Alarge number of financial planning educational programs seem to have some connection to Texas Tech, one of the original group of 20 schools that registered programs with the CFP Board in 1987. Even just among the 10 schools featured here, at least three programs - Utah Valley, William Paterson and University of Georgia - are run by Texas Tech Ph.D.s
It's no accident: In 2002, the CFP Board granted nearly $2 million over a seven-year period to Texas Tech in a graduate education initiative. The stated goal of the grant was to increase the number of new Ph.D.s. to enhance existing financial planning programs around the country as well as to start new ones. The reasoning is simple, says Alan Goldfarb, chief wealth strategist at Weaver Wealth Management and an adjunct faculty member in the University of Texas at Dallas' undergraduate degree program in financial planning. It takes new Ph.D.s - and growth in the number of Ph.D. programs - in order to ensure the future of the academic side of the profession, he says.
A lot of what's working at newer programs started here first. Planners have all seen the Texas Tech students at FPA's annual meetings - they're there in droves every year, wearing their bright red school polo shirts. These days, there are other schools that will take their students to FPA and other industry conferences to expose them to new ideas and potential employers.
But back when Bill Gustafson and Jerry Mason began taking their students to events in 1990, it was a relatively new concept. The idea "took off," Gustafson says. Practitioners quickly warmed to the idea that "they could hire young people out of a university rather than people who were 40-something and career changers. All of a sudden, our enrollment started growing. We were just very opportunistic."
Texas Tech has made a point of having teachers on staff who have substantial practice experience. One well-known example: Deena Katz - a columnist for Financial Planning and chairwoman of Coral Gables, Fla.-based planning firm Evensky & Katz.
Katz says what appeals to her about Texas Tech is the robust nature of the program and the fact that the faculty is totally dedicated to financial planning, rather than teaching planning in addition to teaching, say, finance in another university department.
Undergraduate students at Texas Tech are required to take at least a 300-hour internship to get substantial experience working in the planning profession. Many graduate students also take internships even though they're not required to, Katz says.
When she joined the faculty, she reached out to Charles Schwab and got a $1 million grant for a technology complex (opened in 2009) and for research to benefit the advisor community. Students learn exactly what software is being used in the industry even before they go for their internships "so they hit the ground running," Katz says. "That's powerful."
Utah Valley University
Location: Orem, Utah
CFP Board-registered programs: 1 (undergraduate major in personal financial planning)
Faculty: 2 full-time financial planning, plus faculty from other departments
Tuition: $2,300 a semester in state; $6,740 out of state
Web address: uvu.edu/woodbury/
Utah Valley is among the newest financial planning programs to be registered with the CFP Board - the program's official launch was just this fall.
It is one of several programs housed in an Association to Advance Collegiate Schools of Business accredited school. In this case, the university's Woodbury School of Business.
Faculty from several different disciplines - finance, legal services, counseling and behavioral sciences - are teaching the undergraduate financial planning majors. There are also two full-time faculty members devoted just to financial planning: Jacob Sybrowsky, a Ph.D. from Texas Tech, and Jerry Mason, who developed a well-known personal financial planning program at another Utah school, Brigham Young University, in the 1980s, and later worked with Bill Gustafson to develop the Texas Tech program. Bud Poduska will join as an adjunct in the spring semester to teach financial counseling. Poduska has a Ph.D. from Brigham Young and taught financial counseling there in the 1980s.
The original BYU financial planning program, now closed, was among the first such programs to be launched from a business school, and was well regarded in the planning industry, according to Sybrowsky, who did his undergraduate degree in linguistics at BYU.
The Utah Valley University program is designed to prepare graduates to sit for the CFP exam as well as for other financial planning-related certifications. It's interdisciplinary, says Lowell Glenn, chair of the university's finance and economics department, with faculty from the business school's legal services department teaching the wills and trusts classes, for example.
Mason's role - he's a visiting faculty member for the 2011 to 2012 school year - is primarily to get the school's internships program up and running for the financial planning students. Mason helped do that kind of work before for Texas Tech, and so is well placed to get things off the ground at UVU, Glenn says. Already this fall, Glenn, Mason and Sybrowsky have taken four students to the National Association of Government Defined Contribution Administrators' conference in New Mexico, and the trip yielded "a list of names of people prepared to provide paid internships," Glenn says.
Location: Blacksburg, Va.
CFP Board-registered programs: 2, undergraduate Bachelor of Science degree program in either finance or applied economic management
Students who sat for CFP exams so far in 2011: 17
Pass rate of those students: 65%
Faculty: 2 full-time, 5 additional who teach required CFP courses
Tuition: $10,500 per year in state, $24,500 per year out of state
Web address: fnpn.agecon.vt.edu
At Virginia Tech, the school decided not to agonize over whether to locate the program in a finance department or in a social sciences-oriented department like applied economics: The financial planning program is a partnership of both.
As a result, the program "has a strong business approach," says Derek Klock, professor of practice in finance. Even though some of the students are finance majors and some are applied economic management majors, the financial planning program is still operated as one program, says Ruth Lytton, CFP program director and professor of financial planning. There are very few courses that a student with either major wouldn't take, though some classes may be elective for one major and required for the other, Lytton says.
In addition to the focus on strong business skills, Lytton says the financial planning program has "what we perceive to be a strong linkage to the [planning] profession." Virginia Tech students do internships, and they also travel a lot - they've attended the FPA annual conference for the past 15 years, the Schwab Impact conference for the past five, and also attend different national and regional NAPFA conferences.
When the students aren't doing the traveling, planning professionals come and visit them in their classrooms. There will be up to 19 such visits in a calendar year, Lytton says, with the professionals giving seminars, classroom guest lectures, doing mock job interviews and holding question-and-answer sessions. "This gives the students a different understanding of not only what happens in the classroom, but how it plays out in real life," Lytton says.
Students at Virginia Tech can also get hands-on experience managing real money - the university's endowment money. The finance department sponsors and supervises a student-led equities investment group called SEED and a fixed-income group called BASIS, Klock says. The combined portfolio is about $10 million, he says. Students who run the portfolio are doing so on a volunteer basis - there's no academic credit. Still, for 24 slots that open up each year, there are normally more than 150 applicants, Klock says. In the past year, about eight student analysts have registered for the financial planning program.
Danielle Reed is executive editor of Financial Planning.