Show Me the Money
Another issue is funding. Where other majors see millions in donations, grants and scholarships from degreed professionals, financial planning on a whole has been left to fend for itself in the university system.
Even at the top schools, financial backing from the industry is lackluster. Texas Tech, arguably the most well-known program, receives just $300,000 a year in cash donations, according to Associate Professor Deena Katz.
Most programs don’t even see a fraction of that level of funding. In the past two years, William Paterson University received a $50,000 grant, $45,000 in scholarships and $6,250 in student competition cash prizes. The money does more than fund a program, Dean says. It shows support for the program and raises its profile in the eyes of university administrators.
The University of Georgia's program receives less than $10,000 a year from financial services companies. Grable says alum support is also low, noting that a majority of industry leaders are primarily older men who perhaps didn’t go to college. Or if they did, they graduated with a general degree—not in financial planning, Grable says. So when it comes time to make a donation, they generally send to their alma mater and not a financial planning program. “That will never actually make an impact for financial planning,” he notes.
At Virginia Tech, which has more than 125 undergraduate students, Assistant Professor of Practice Derek Klock says the school does not have any corporate donors who have stepped up to fund scholarships, faculty or programs. “The vast majority of our ‘donor-based’ money is from individuals—either alums or people who have hired our grads,” Klock says. The support has allowed the school to provide a few, small scholarships.
Ron Rhoades, former NAPFA president and a professor, occasionally donates a speaking fee to help support his program at Alfred State University, which has 30 students.
“Financial services needs to find better ways to support NextGen advisors,” Rhoades says. It doesn’t cost a lot to run a financial planning program, he adds, but industry support helps elevate the importance of a degree.
There is some indication the industry is starting to step up. TD Ameritrade Institutional launched the NextGen Grant Program last year, pledging to award over $1 million in grants and scholarships over the next 10 years. The program awards $50,000 annually to an established financial planning program, $25,000 to a university with an emerging program and up to 10 student scholarships. In 2013 the program awarded $50,000 to William Paterson’s program and $50,000 to 10 students.
Technology vendors, such as MoneyGuidePro, are also helping these programs by providing free software. This year, MoneyGuidePro provided 65 universities access to its software, with plans in place to increase that to 100 universities by next fall. The company is also partnering with other technology vendors such as RedTail, Orion and Laser App, to bring additional resources to campuses. “We want young financial advisors to embrace our philosophy that clients deserve comprehensive financial plans,” says Will Gilfillan, head of the company’s educational licensing program.
The bulk of any additional funding comes in the form of donations or scholarships sponsored by local financial planning firms, as well as FPA chapters. The Central California FPA chapter sponsors a $500 scholarship annually, while the FPA of Greater Kansas City also provides several yearly scholarships, the amount of which varies.
Scholarship website SchoolSoup.com lists less than 50 scholarships for financial planning majors, with most only worth a few thousand dollars at most. In addition to individually sponsored scholarships, many are provided by community banks, as well as insurance companies like MassMutual and State Farm. Meanwhile, other degrees like Chemistry have almost 2,000 scholarships listed, several providing tens of thousands of dollars in aid.
“Maybe part of it is our fault,” suggests Kansas State’s Director Ann Coulson. “We haven’t asked. We haven’t made a concerted effort.” Coulson says that the university programs need to learn to ask for funding—not just scholarships and internship opportunities for their students.