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A gap between studying to be an adviser and being one

More communication said to be needed between planners, academics

By Aaron Siegel

October 26, 2008 6:01 am ET

By and large, few would disagree that there is a disconnect between academia and real-world financial planning.

"We as academics don't communicate often enough with practitioners, and we need better communication in order to find future opportunities for our students," said L. Ann Coulson, principal of an eponymous fee-only financial planning firm in Emporia, Kan., and a professor at Kansas State University in Manhattan. "I think there needs to be better communications between professors, advisers and between students."

Ms. Coulson's firm has no assets under management.

Rick Kramer

Rick Kramer, principal at Kramer Capital Management in Manhattan, which manages $20 million in assets, agrees.

"The academic world has a lot of misconceptions about how financial planning is done," said Mr. Kramer, who is a certified financial planner and has taught planning classes at Kansas State.

Most students have no idea about what it means to be a financial planner, he said. Being a planner is about listening to clients and answering their financial questions — not just preparing 50-page financial plans, Mr. Kramer said.

Jeff Bratz

"As an industry, we need to do a better job using college graduates, teaching them the topics and [how] to better work with people," said Jeff Bratz, a CFP with Legacy Financial Group in Urbandale, Iowa, which manages $200 million in assets.

Practitioners should reach out to more academic institutions, provide more internship opportunities and sit in on academic advisory boards at financial planning programs, Ms. Coulson said.

ADVISORY BOARDS

One way of bringing more real-life experience to a financial planning program is by establishing an advisory board that includes practicing planners.

The University of Missouri in Columbia, for example, in 2002 created an advisory board that includes a broad base of professionals from different types of financial services companies to advise the school on what students need to know and how to tailor a curriculum to suit their needs, said Michael Gerken, the senior vice president of professional development at Waddell & Reed Financial Inc. of Overland Park, Kan.

"When we get to hear the things that professors see from the students, it helps the advisory board get a better understanding, and it helps us get a greater insight [into what students are learning and what is being done to help them]," said Mr. Gerken, who is a member of the advisory board for the personal-financial-planning program at the University of Missouri.

Conversely, the financial planning industry could do more to bring academicians into real-life planning, he said.

"If you create those opportunities for a stronger connection between practice and education, the students attending financial planning programs will get that insight," Mr. Gerken added.

Talk of improving the level of communication between academia and the financial advice industry comes as the industry grapples with how it will groom its next generation of financial planners.

Some have suggested that students should be recruited before college. "You need to start recruiting at the high-school level, and you need to inform high-school guidance counselors [that financial planning is a career option]," Mr. Kramer said.

Others thinks that it is important to promote the industry at Ivy League universities and other prestigious schools.

"It would be more helpful if major universities can have financial planning programs," said Dawn Wissing, director of operations at KHC Wealth Management Services in Overland Park, which manages $220 million in assets.

"Based on supply and demand, the Kansas States, Virginia Techs and Texas Techs will become the prestigious financial planning schools," Mr. Bratz said. "Those schools will deliver the next generation of talent to the industry, and they will become the standard." Virginia Polytechnic Institute and State University is based in Blacksburg, and Texas Tech University is in Lubbock.

Despite the Washington-based Certified Financial Planner Board of Standards Inc.'s decision last year to require that all certificants obtain a bachelor's degree within five years of the date they pass their exam, some worry that the bar hasn't been set high enough.

KHC Wealth Management, for example, has instituted a policy that requires newly hired advisers to have a master's degree in financial planning and a CFP designation, said Matthew Starkey, vice president and chief operating officer of the firm.

E-mail Aaron Siegel at asiegel@investmentnews.com.

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