What, Exactly, Is Your Major?
When a student graduates with a bachelor’s degree in accounting, they’ve usually attended classes within the university’s business school and studied taxes, financial analysis and general business. There’s no such assumption in financial planning, as the programs vary school-to-school.
Out of the 120 baccalaureate programs registered with the CFP Board, less than a dozen offer a bachelor’s degree specifically in financial planning or personal financial planning. Instead, many students graduate with diplomas in business administration, finance, economics and business studies. In at least one case, the program leads to a degree in agricultural economics.
In fact, a majority of these financial planning programs are not even housed in a business school. Texas Tech University’s program is housed in the College of Family and Consumer Sciences. Part of Virginia Tech’s program is in the Department of Agricultural and Applied Economics. And these are among the best financial planning programs in the country.
“These programs are not positioned in the right place—they should be in the business schools, but they’re not,” says Nexus Strategy President Tim Welsh.
Why do they need the halo of the business school for legitimacy? “The biggest issue is awareness. I just don’t think a lot of students know this career path exists,” says former Financial Planning Association President Michael Branham. “If you look at where these programs are at Texas Tech and others, they’re not in the business school or finance programs. Students might not even know that this type of program exists—it might not be appealing to them because it’s outside the business school.”
There’s certainly an advantage to placing a financial planning program within a business school, Dean says. It attracts students with a predisposed interest in money management and finance. His program is based within the university’s Cotsakos College of Business; the financial planning bachelor’s of science degree has expanded to 90 graduates annually since launching in 2009. Many are dual majors also earning accounting or business administration degrees.
So why aren’t more financial planning programs taking advantage of being in a business school? Historically, business programs were not at all interested in personal or household finance, says University of Georgia Professor John Grable.
“Most business programs talk about corporate finance, but never address personal or household finance,” he says. Business schools also tend to consider personal finance to be a less significant degree. “There’s definitely a pecking order at universities in terms of majors,” Grable says.
The real problem is that the universities still think of the work as more a trade than a profession, Pfeiffer told an industry conference last month. “The academic principles in the schools of business won’t allow them in.”
“They’re in the school of agriculture and economics and they’re in the school of humanities because (those schools) have more tolerance for bringing in this kind of external, or around-the-edge type of curriculum,” he says.
The CFP Board is trying to change that as one of the only institutions attempting to design a shared body of knowledge that would be the basis for a professional degree. To be sure, more programs are starting in the business departments, says Charles Chaffin, the director of academic programs and initiatives at the CFP Board. “That’s where it’s trending towards.”