As technology assumes a larger place in the advisory industry, software companies are clamoring to donate their products to financial planning programs in universities across the country.
Texas Tech University, for example, now receives more than $6 million in annual software licenses, according to Barry Mulholland, a professor in the university's department of personal financial planning.
“Companies like the exposure they get to the next generation,” Mr. Mulholland said. “The students coming into the industry will be able to add value at a much sooner point in their careers because they know about software that advisory firms might not even know is out there.”
Luke Dean, financial planning program director at William Paterson University's Cotsakos College of Business, said the software has become invaluable to leading financial planning programs.
Companies were initially resistant about donating software, but now the floodgates have opened, Mr. Dean said.
“Some companies said, 'No, we're not giving you our software free,' but now almost all of the companies have seen the light and are donating to us for free,” he said. “They realize we're training the next generation of planners.”
Students who train on financial-planning software are in demand with registered investment advisers and broker-dealers, Mr. Dean added.
For example, he said, a large RIA has already hired a William Paterson student who won't graduate until December. The student was hired partly because he had recommended that the company adopt MoneyGuidePro as its financial planning platform.
“These students are training 55-year-old firm owners,” Mr. Dean said. “This generation is way faster in adopting technology.”
At the Technology Tools for Today conference in February, William Paterson University's financial planning students won first place in the FAStech Cup competition. They won by integrating a range of software products and creating a website for a fictitious company, Pioneer Wealth Management, which offers interactive financial planning tools to investors.
FAStech, or Financial Advisor Student Technology, is a partnership of software providers that has driven much of the free software licensing initiatives. MoneyGuidePro was the first financial planning strategy offered through FAStech, while RedTail was the first customer relationship management system and Orion Advisor Services was the first portfolio management software provider, Mr. Mulholland said.
Tony Leal, chief technology officer at MoneyGuidePro, said plans are underway for a second FAStech Cup in 2015.
“These kids were clever as heck. We definitely plan on doing it next year,” Mr. Leal said.
More students will enter next year's competition, and more companies will be watching, he added.
“We even have large broker-dealers who want to come to FAStech now and recruit,” Mr. Leal said. “Why not? You've got some really sharp candidates that are all in one place and one time presenting in front of a panel and an audience.”