Hit hard by an 18% drop in state funding over the past six years, Kansas State University can't even afford to teach its 65 financial planning students how to use such popular planning programs as MoneyGuidePro or Morningstar Advisor.
"We're not asking for a Cadillac or anything," said Ann Coulson, an assistant professor of financial planning at Kansas State University. "We need a classroom with enough electricity so our students can have their laptops and run software during class."
Kansas State University is hardly alone.
Virginia Tech is looking for at least $1 million to endow a full-time faculty position. Texas Tech, meanwhile, wants about $75,000 to help with student recruitment and retention, and Utah Valley University needs about $25,000 for a sustained program to raise awareness of its financial planning program and the profession.
"Corporate funding is absolutely essential to helping financial planning programs grow, develop and gain visibility and status on their own campuses," said Luke Dean, director of the financial planning program at Utah Valley University. "We desperately need help from the big industry players and the [registered investment advisory] firms."
Without that help, the future of the nation's nearly 200 academic financial planning programs is questionable. So, too, is their ability to help replace the industry's legions of retiring financial advisers. By 2022, the industry is expected to face a shortfall of at least 200,000 advisers, according to consulting firm Moss Adams.
As it stands, college financial planning programs are barely scratching the surface of addressing the industry's problem with attrition. Considering the programs only graduate about 1,350 young professionals a year, it would take nearly 150 years to make up that 200,000 shortfall.
200KExpected shortfall of advisers by 2022, according to Moss Adams
In stark contrast to such areas as accounting and law, where it's common for schools to receive multimillion endowments from alumni, financial planning doesn't have the financial support of the companies — or individuals — who benefit most from its growth.
"Corporate funding in support of [financial planning] programs is just starting to gain momentum," said Vickie Hampton, chair of the personal financial planning department at Texas Tech University. "But it's in its infancy."
COMPETITION FROM WITHIN
One reason for the lack of financial support is that the financial advice profession is not nearly as old as the fields of law or accounting. As the profession matures, it stands to reason that successful advisers and their firms will contribute more to the formal education of advisers, say experts.
But some school administrators cite another problem: competition from another industry player, the Certified Financial Planner Board of Standards Inc. In late 2015, the CFP Board launched a new center designed to support workforce development among advisers and financial planners, and foster research by academics and practitioners in the financial planning field.
The organization, known as the Center for Financial Planning, couldn't have gotten off the ground without some $6.2 million in funding it received from such firms as TD Ameritrade Institutional, Northwestern Mutual, Capital One and Edelman Financial Services.
"I'm afraid that firms that have donated to the CFP Board's effort will feel like they've already done their part to help," said Utah Valley University's Mr. Dean. "But that money isn't going to get to the academic programs that need it."
For its part, the CFP Board does not view itself as competing with the schools for funding.
"There are many resources available within the financial services industry to support a wide variety of initiatives," said Marilyn Mohrman-Gillis, the Center for Financial Planning's executive director. "These include short-term needs, such as enhancing classrooms, and long-term efforts offered by the center that will help build the academic foundation for a diverse financial planning profession of the future."
One factor working to the schools' advantage is that the demand for professional financial advice is growing and many advisory firms have never been in a better position to provide financial support. With an estimated 10,000 baby boomers retiring every day, the need for financial advice has never been stronger. In fact, the typical advisory firm has doubled in size since 2011, according to the 2016 InvestmentNews Financial Performance Study. Thanks to industry consolidation, there are now more than 400 advisory firms with at least $1 billion in assets under management and dozens with more than $10 billion in AUM.
As a result of such growth, many firms are in a better position to give of themselves financially. Now it's up to school administrators to convince them to invest in their programs.
"How will the advice business become a profession if we don't see some of these larger players invest in it?" said Ruth Lytton, director of Virginia Tech's financial planning program.
Lane Keller, founder of KMH Wealth Management, is part of the Texas A&M Founders' Club for financial planning that helped to set up a certificate-granting program at the school several years ago. It's raised about $1 million so far from corporate and individual sponsors, with the ultimate goal of creating a financial planning major at the school.
"We need young people coming into this business because most of us are older, and we have to transition these businesses over to a younger, well-trained workforce," Mr. Keller said. "Firms should support the universities in their states and get programs going."
Creating planning programs, though, requires persistence.
'LABOR OF LOVE'
Bill Carter, founder of Carter Financial Management, spearheaded the Texas A&M effort about eight years ago. After several years of pressing and pledging, the administration got on board, then said it would take $3 million to $4 million and at least five years before students would be able to earn a major in the subject.
A $500,000 TD Ameritrade Institutional grant helped the school hire a program director, and Texas A&M began offering a minor in financial planning 18 months ago. It's likely to be another two years before students will be able to pursue a major in financial planning.
"It's been a labor of love and a study in patience," said Mr. Carter, whose firm has already hired two graduates from the program.
Nationally, planning programs have received the most funding from custodians Charles Schwab and TD Ameritrade Institutional. For instance, Charles Schwab modernized Temple University's financial planning training center and renovated Virginia Tech's financial planning classroom last fall. It also sponsored a tech center at Texas Tech in 2008, among other projects and sponsorships at the University of California, Irvine, the University of Akron and the University of Arizona. In addition, Schwab offers an RIA summer internship program.
TD Ameritrade Institutional, beyond its sponsorship at Texas A&M, has awarded grants to six other schools that were launching or expanding financial planning programs, funded about 46 students' scholarships and hosted 253 students at conferences since 2010. It estimates it's spent about $5 million so far.
"We support the financial planning programs and I tell advisers all the time that they have to support them too, if not with their money, then with their time and help teaching," said Kate Healy, marketing director of adviser marketing and sustainability at TD Ameritrade Institutional. "Working with the financial planning programs is the best way for firms to build their pipeline for talent."
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Financial technology firms also have been generous in supplying software to academic programs for their students.
But financial planning programs want more funds to pay for students to attend conferences; they want teaching support that can bring the real world into the classroom; they want firms to hire their students as interns; and they want scholarships for their students.
"Even a $1,000 scholarship is a big deal to these kids," Mr. Carter said.
Last year Mr. Carter spoke to the financial planning students at Texas A&M and asked them about their aspirations. He explained to them how important they are to the advisory industry's ultimate success.
"You need to understand, you are my dream," he said.