Is there a shortage of competent professionals in the financial planning industry? I don't think so, despite what some writers have claimed since my "Now or Never" column in May when I discussed slim opportunities for young planners and career-changers.

As I see it, the problem is actually a mismatch between career development programs, and the current and future needs of financial planning. Our firm has created a career development program, but the majority of financial planning firms have no career path for newly hired professionals.

The firms that are going to succeed must provide a solution in order to help develop the next generation of great advisors. Without the right guidance, new hires may become disillusioned, and the planning business may lose important talent.



Those were the words posted at the entrance to a 4.5-mile trail at the rim of the Grand Canyon. Experienced guides know it's dangerous on the trail if you don't know what you are doing, or are unprepared for the journey ahead.

You could symbolically put the same sign at the entrance to the Career in Financial Planning Trail. If you don't know what to expect when you enter this industry, there could be danger, and you may not end up where you want, when you want, doing what you want. Here are three trails where new recruits might find themselves in the most danger:

* The product sales business model. Since most college graduates and career-changers have no training, skills or inclination in sales, this route often leads to less-than-positive experiences for entry-level hires. The career path? Sell more!

* No-selling support role. Professionals often wait years to work in an advisory capacity because their employer does not formally articulate any explicit means of advancement. The career path? Huh? What career path?

* A trust company, bank or other large financial firm such as an insurance company. Entry-level professionals do get to talk with clients early on, but the engagement philosophy limits what they can do to help clients over the long term. The career path? Clearly zzzz.

If new hires aren't clear about what they're getting into, "dangerous" entry-level jobs can create frustrating and disillusioned advisory firms and financial planners. How can hiring firms and new advisors guard against taking the wrong paths?



When you use a GPS, online maps tell you where you need to go. New employees need a Job GPS that can chart the way forward and tell them what to expect along the way. The Career Path Program we've developed does that by providing a clear track with training, experience and accomplishment goals along the way.

Our program has four milestone positions: planning assistant, planning associate, senior planning associate and client relations manager. Each position has education, training and experience levels. Here is how our Career Path Program manual describes some of these positions:

* The planning assistant. This is the initial position in the firm dealing directly with financial planning. The assistant will learn about the operations of our planning department and will be involved in all facets of financial planning.

An assistant will assist the client relations manager in the collection, recording, compiling and analysis of data and information. The assistant will perform financial analyses as directed. (The firm has a detailed procedures manual.)

The assistant must demonstrate mastery in all aspects of the position to be considered for a promotion to the position of a planning associate in the firm. In order to become a planning associate, the assistant must have fulfilled specific company and professional requirements. This includes additional reading and education in preparation for testing to receive the CFP certificate. (Eight books are currently on this list.)

* The planning associate. In order to become a planning associate, the individual must have earned the CFP designation, which means passing the challenge exam and fulfilling the requirements for experience in the profession. In addition, the meeting and financial plan preparation requirements described in our Requirements Chart (not shown here) must have been mastered.

The associate must continue to demonstrate reasonable interpersonal and technical skills in relating to clients both on the phone and during client meetings. These skills will be developed and evaluated by attending a minimum of 500 client and prospect meetings, updating 100 existing retirement plans and developing 30 new retirement plans, all under the supervision of the client relations manager and vice president of planning.

This excerpt shows how the Career Path Program puts together a matrix of experience, training and certification for each job level at the firm. These requirements are codified, and new hires can see exactly what they have to do in order to be considered for promotion, especially to become a client relations manager. This straight-forward career path appeals to younger advisors who are sorting through their options and just starting to map out their professional lives.



Entry-level jobs have a risk-reward relationship, just like investing in securities. In sales-oriented positions, there is no job risk or reward for understanding or executing complex financial plans for clients. The immediate skill set involves attracting customers, closing sales and making profitable trades. The rewards tend to come quickly if you have a knack for attracting customers and selling products.

There's a low base salary, with the majority of income from commissions. A new hire in a major city might start with a base of $50,000, but soon enough the salary tails off and you're paid mostly on commission.

At that point, the outcome is unclear. If sales is not for you, your income might head toward zero. On the other hand, if you turn out to be a natural at selling, you could easily top $250,000.

Unfortunately, there is more at work here than just raw sales talent. My experience has shown it's difficult for young professionals to find or convince older, wealthy clients to purchase anything from them without help from senior brokers or financial advisors. There is serious risk an entry-level employee will not do well if he or she doesn't have a willing mentor or senior professional with whom to partner.

For those trained as financial planners, the problem is that this entry-level job has little or nothing to do with financial planning. But if you're highly competitive and focus all your energy on winning at everything you do, the financial rewards will far outweigh the risks.

In non-sales entry-level jobs, risks include the inability to advance no matter how hard you work to advise clients. To prevent this from happening, both young professionals and the advisory firms they visit for job interviews should be in agreement on the following issues:

* The scope of the immediate job.

* Positions the candidate can aspire to and the scope of those jobs.

* Exactly what the candidate must do in terms of education, certification and experience to advance.

* Whether the firm has a career program and, if so, what it entails.

Every journey, no matter how long, starts with one step. Make sure the first step your young professionals take is the right one. And make sure they turn on their GPS.


Glenn G. Kautt, MBA, CFP, EA, AIFA, is chairman of the Monitor Group in McLean, Va. You can reach him at

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