Kate Healy: Evangelizing for Financial Planning as a Career Choice

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Hello and welcome to Barron's The Way Forward. I'm Greg Bartalis, and my guest today is Kate Healey, Managing Director, Center for Financial Planning. We're going to be discussing what advisors can do to have more people recognize that being a financial advisor can be an attractive career choice. Kate, welcome to the program.

Greg, thanks so much for having me. I'm excited to be here.

Fabulous. So this is a really exciting topic because there seems to be an enormous disconnect between what the reality is of the profession and how so many people perceive it, particularly younger people. Tell me about this dynamic. Tell me about your job and what you're doing to address this.

Yeah, you've hit it on the head, Greg, right? So many people don't know about this profession, and those that do have misperceptions about what it really is. And so We're really working hard at the CFP Board to build out that pipeline of talent to create awareness before people have made their career choices, actually before they've made their college degree choices. And so really looking at ways to introduce this career to them in a real level when they're in high school, when they're in middle school, or they haven't chosen their college degree yet. We did some research last summer. We— almost 1,600 people evenly split between middle school and high school students, college students, and then their parents. Because we also know that we've got to not just talk to the people, but we've got to talk to the influencers, the people that help them think through and make their career decisions. So we found a lot of interesting stuff that I'm sure we'll go through as we talk today.

Sure. I mean, tell me, let's dive into that.

I mean, obviously, right? Number one barrier was lack of familiarity. More than half of the students would never consider this as a career. Actually, in college it was almost 60%. Although I will say from a parent influencer perspective, only 10% of them said they would never consider the career for their children. But again, so much of a lack of awareness around that. And a lot of that too is a misalignment with what the career really is. Those that said they were not interested in the career, assume that it's because they weren't good with numbers. They thought it would be boring and not an interesting job, that they wouldn't be good at it or it wouldn't be a good fit. They really hone in on this, I need strong math skills. It was interesting, a lot of them thought that you could only be successful if the market was going well. And they thought that you have to be an extrovert, that the only way to do this is to be someone who's really out there and selling all the time. You know, when we think about how we have to message this, those are the things that we have to counteract against.

Right. And I think that perception is fairly ingrained amongst these people to the extent they even think about it. Right. And what's interesting is I know that you were involved in a study previously, and it mentioned that when advisors were asked what skills they were looking for in new hires, you know, client service, good communication skills, being able to relate to clients, all of those things ranked quite highly. And to your point, so many young people just think you're essentially commissions and you're doing sales and whatnot.

Absolutely. And that's what scares them away, right? They're— who's ready to do sales when they're 21? They don't have a Rolodex of people. Yeah, they don't know everyone. So it's— and it's interesting, that disconnect. So we also have to think from advisor's perspective as they're writing their job descriptions, what are they asking for? To make sure that that comes clear, that This is a focus on clients, and we need you to have communication skills, and we need you to be able to come in here and solve problems. It's not come in here and trade stocks and, and bring in new business all the time.

It even seems that firms are more willing to hire people without traditional backgrounds on top of that, you know, putting aside what the actual nature is, there's just more of a broadening and receptiveness to people from various walks of life. So it should be more of an accommodative on-ramp, if you will, into the profession.

Absolutely, 100%. And as firms are growing and maturing, right, we're seeing a lot of them go more to that teaming model. You know, here at Barron's, right, that it allows folks to have different people play different roles. It also gives the client more confidence that there's a whole team of people behind them, but it really helps provide a career path. So, you can start out as one member of the team and then evolve into different members and really grow your skill set, your confidence, and all of that to then maybe you do become a business development person or you have your own book book of clients. But there's a path there. It's not just— we don't just drop you off after college and say, okay, you're in, let's go.

I mean, that's a really interesting point. I mean, when you think about some of the traditional vocations that younger people consider, such as, let's say, medicine, law, that seems to be more of a fixed trajectory, if you will. And here, what you're describing is, yes, it's a specific career, but within it, there are almost micro careers potentially if you're part of a team, you could wear many different hats and just shift around and world of possibilities really.

Yeah, you know, I often say, I think sometimes we do ourselves a disservice when we talk about the lack of, for instance, women in this profession, right? Because we only ever really talk about the advisors. So for instance, there are 23% of CFPs are women, but the reality is 46% of folks in firms are women, but they're in different kind of roles. They could be running marketing, they could be running operations or compliance, or some of them are the COO. But we, we always, when we do our statistics, we focus so much on the advisor. So we need to also broaden that, that this profession has an ecosystem of careers you can have. You can grow into the advisor role or not if you don't want to, but you can start out in client service roles or power planner roles or marketing roles and then really get involved in the business and then move into one of the other careers.

Yes. And I think just being in the business, regardless of where you are, will give you a front seat view of it. And as you do your job, you can watch and go, hmm, that's interesting, or, hmm, that looks awful, and take it from there.

Right. And I think you also, when you see— you look at someone, you go, you know, I actually think I could do that. I didn't think I could before. I didn't have the confidence. And now I think That's something I can do.

Exactly. Because it's just abstract and it can make it out to be some monster that it isn't. It gets demystified.

And it sounds so frightening to find your own clients, right? And to business develop. And then you start to realize how you make those relationships through your community and through just how you live your life. And it becomes a little different.

Yeah. I want to go back earlier. You mentioned the role of parents, or you mentioned mom, I think, as influencer, which is kind of funny in this context, right? It's like often from young people, dad, mom, you don't know what you're talking about, et cetera. But here, they have a potentially inordinate impact on the decision-making of that young student, right? I mean, tell me about that.

Yeah, I think they still say, mom, dad, you don't know what you're talking about. But in green, they do listen. So when we looked at who their influencers were, right, no surprise, it's their family. And within their family, it's their parents, and their mom a little bit over their dad. They listen to mom, and then of course it's their friends and it's social media. But it's important, you know, we used to think that maybe it was guidance counselors and things like that, and they do play a role. They're just swamped, right? They have so many students per guidance counselor, they're not the one. But, you know, when we look at how we can do that, and we can talk about some of the programs we're developing at the CFPB around how to help inform influencers about what this is as well, because they're the ones that students are going to talk to. Again, I think, You know, you and I, and many of us have talked about, if you haven't had a financial planner in your life in some way, if your parents didn't use one, or if your aunt or uncle isn't one, you don't know this exists. You have no idea. And so we need to spread that word to more and more people so they can help bring people towards this career.

Yeah. I mean, what's interesting is that the money, finance, investing, and what is in some ways actually though quite mainstream, right? And if you look at YouTube channels, Twitter, whatnot, it's all out there. So on one level, it seems that it might not be as hard a lift because it's something that's familiar. If you go back maybe in the— I don't know, go back to the '70s, pre— then you really have this barrier, what is this thing? So it's technically floating around. The ideas are not alien. It's more about how can you fuse the reality of what it is in wealth management, use that again as perhaps an on-ramp to become familiar with that world and find that bridge.

Yeah, and I think that so much of what we see though right now, it's very much focused on transactional. It's stocks, it's what's the market doing, which is great. It's good to have that knowledge. You need to know to invest, invest early, invest often. But they're not seeing the full picture of the behavioral piece of the actual, the wealth management, the financial planning where you're sitting down and you're not just talking about investments, you're talking about where you want that family to be. Estate planning, legacy planning, retirement planning, education planning. So many more behavioral pieces of how to help people make the right decisions in order to have competent financial planning.

Right. No, that's extremely true. You're right. I do think there is too much of an emphasis on like, oh, these stock picking competitions. And of course, if you buy the winners, tend to have bought the riskiest things and doesn't really teach the right lesson on that level. Tell me what else you're doing in terms of diversity and also in age. I mean, I think you mentioned something like Correct me if I'm wrong, but that there are more CFP holders who are over the age of 70 than under 30. Is that right?

You got it right. There are more CFPs over the age of 70 than there are under the age of 30. So, you know, there's a disconnect, or there's more of a skew towards the older age. Now, we are seeing the progress there, right? Like, for instance, you know, and I talked about the 23% women last year, over 30% of new CFPs were women. 15% of the new CFP certificates were diverse, 2.5 times the growth rate of all CFPs. So we are seeing more younger people. There were more people under the age of 30 taking the exam. So there is progress there, but we have a long way to go, right? Because we know this is a profession that is aging and that we also have a challenge then of making sure we have a nice pipeline to create that new group of talent because at some point, the over-70 are going to retire.

Let me ask you this. So for younger people who are receptive to the business and actually throw their hat in the ring, do you know, to the extent you can answer this, what reasons or arguments most resonated with them or influenced their choice? Was it like, is it compensation, is it flexibility, etc.? I'm just wondering if there are any themes that emerge.

Yeah, you just, you know, you almost hit them right on the head. It really was. It's that they can make a good living for themselves. They have a work-life balance and flexibility there. It's not a one-size-fits-all job, right? You can be very— you can have a job in a corporation call center, do financial planning that way, but you can also open up your own business and have a ton of flexibility. So that work-life benefit, the work-life balance, the benefits with flexibility, and the fact that you really can make a good living very strongly resonated with the, the students, but also their parents.

Yeah, yeah, I can, I can appreciate that, especially given the rate of technological change. I mean, kids applying to universities, it's more of dealing with international students as well. I mean, it's really definitely much more challenging. So I could see the— and given the cost of college, right, throw that in the mix, people are going to want a decent ROI. So there is going to be an element of, hey, let's be a bit more pragmatic maybe than we might have been in decades past.

And I think that's what's so important about why we have to raise that awareness, right? We've heard in the past, you know, people say, my parents just tell me to get an accounting degree because they know I'll always have a job and I'll be able to pay off my student loan debt. We need to showcase that you can get it. You can actually get a degree in financial planning because many people don't know that. We're still, you know, building out programs, right? There's about 200 programs in the country where you can get a financial planning degree.. But if you ask any students that are in those programs, more than half of them will say, I fell into this. I was here. This degree program had maybe a financial literacy class and I got really interested. And then I went to the professor or the program director and they convinced me that this would be a great career for me. So we still have so much awareness to create around the fact that there can be a path. And that's what we're really working on, looking to embark a program you know, later in this year to be, to get into middle schools. Well, we'll start with high schools, right? To get into high schools with curriculum that is going to talk about what's a day in the life of a financial planner look like and partnering with organizations that already have relationships with schools so that we're not trying to get into every school district in the country to really showcase here's what a career looks like. And if this is a career that interests you, there's actually a pathway. You can go to college and get a financial planning degree. And when you think about the ecosystem that we work in, there are so many companies here that are looking for talent that, that can help create internships and scholarships and all of those things to help build that pathway. And then once you graduate, you can get a job working as a financial advisor in many different types of firms. So there's always going to be a great fit.

Yeah, I mean, given that so few students would have that degree, I would have to imagine if you got that, that would put you right at the top of the list. I'd be like, whoa, look at this.

So absolutely, absolutely. So we, you know, we need to create more awareness, get more of those programs, um, and then get the certifications, right? You know, study for the CFP exam, join the, the Financial Planning Association to network with people, um, and just create those, those, um, the networking events and the pathways. It's just really, it's showing that path. Right now, no one knows how anyone became a financial advisor because if you ask financial advisors, their pathways are so different depending on if they started in the '80s or the '90s, they might have had a, you know, started in a product-based and got a lot of training, whether it's in an insurance company or a wirehouse, and then they may have gone independent or they, or as firms, broker-dealers have started to build out more of their financial planning capabilities, there's a whole different career path.

Yeah, and you mentioned that 200 schools, I think, Alpha?

It's over 200, yeah.

And what's been the trajectory? Has that been growing to the extent, if you know, has it been growing modestly or fairly rapidly?

Etc.? It's been growing rapidly. I will say that there, there are constraints on the growth, right? And some of those constraints, um, which is something where I think that the— maybe some of those over-age 70 CFPs can help— is some of the growth constraints are having qualified faculty to teach the programs, right? So the program can only grow as fast as they have professors to teach. And also there's a lot of infrastructure to set up a new degree within a program. But there is a lack of teachers. And so, you know, there's an opportunity for advisors to also become adjunct professors and help out their local schools, their alma mater, and say, I can teach estate planning, I can teach retirement planning. This is what I do every day. And create those extra resources.

I could totally see that as a way to maybe do a soft glide to retirement. Say, I just want to teach one class or do it on your own terms. And they know the information inside out. It wouldn't even feel like work to them.

Absolutely. And, you know, I laugh that so many of them can be done virtually. They're in person. You can set up a Zoom call and teach a class right from your living room.

What else? What else haven't we talked about that you think is worth knowing?

I think that one thing I always ask advisors to do is to make sure they're telling everyone about what they do, right? Talk to their clients' kids. Their clients' kids especially get it because they're working with a financial advisor. But when the programs that we're creating at the CFP Board, we're going to be asking for volunteers, right? We can talk all we want about this career, but until you actually talk to a financial advisor and get the passion of what, how they feel about what they do, that to me is going to be a game changer to really having more people embrace this profession. So at some point, right, there'll be an opportunity to have volunteers come into schools and talk about a day in the life and talk about what they do and help us with these programs to really create that, that like, oh, that's a successful person and Wow, he or she looks just like me. That's interesting. I didn't know that someone who looked like me could do this profession. And so we'll be looking for everyone in this industry to really help us create those pathways and career paths.

It seems like a very good idea because for obvious reasons, the kids will learn a lot. The advisor will get some visibility. Let's say they leave 50 business cards. Kids go home, hey, Mom, learned about this. You know, it could even drive business. But there's certainly goodwill. There's really no downside. School benefits from having an expert come in?

And, you know, it's interesting. I mean, obviously we wouldn't use it as business development, but we also see that, you know, the teachers are very interested because they, they don't get training in this either, right? And they're just like all of us. Hey, there's your 403(b). How do you save for retirement? And so the— and to your point, then going home and talking to your parents, you know, um, a majority of this country does not work with a financial advisor. And so the more awareness we raise that This help is there and you don't have to be a millionaire to get it. I think that benefits all of society by providing more opportunities for more people to work with a financial advisor.

I wanted to ask you for an actionable idea. So for anyone listening, what can they do to maybe get closer to what you're recommending?

Yeah, I mean, I think it's get involved in this. Like, this is everyone's problem. You know, at the CFP Board, we are kind of— I call us, we're at the cornerstone of the ecosystem. Right? You can work with us at the Center for Financial Planning. You can donate. We have scholarships and career fairs to get involved in. But tell everyone that you know about the profession and tell people you don't know and just get out there and talk to all the organizations and really help people. We have resources through our WIN Advocate Program for women that, you know, can help you get into a school to, you know, have a curriculum and talk about what a great career this is.

Okay. Well, that was a really terrific conversation. Thank you for joining.

Thanks so much for having me, Greg.

My guest has been Kate Healey. For more advisor-specific podcasts, please check out barons.com/podcast. For The Way Forward, I'm Greg Bartalis.

This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.