Facing a looming shortage of financial advisors, the CFP Board of Standards is launching the Center For Financial Planning to build a more diverse and sustainable universe of financial advisors. TD Ameritrade Institutional, which has been focusing internal efforts on addressing the same issues, is becoming the center’s lead institutional sponsor with a five-year, multi-million dollar commitment over several years.
As CFP Board CEO Kevin Keller sees it, the number of advisors––which is heavily dominated by older white males––is likely to shrink over the next decade. There are “more CFPs over 70 than under 30,” he noted.
The CFP universe of 73,000 certificants is adding about 3,000 new advisors a year. While the board boasts a 97% retention rate, it anticipates that many of the first generation of advisors will start retiring or winding down their businesses over the next decade.
If something isn’t done, the next generation of Americans could find it difficult to get financial advice. Research conducted by the CFP Board has found that 40 percent of Americans now work with a financial advisor, compared to 28 percent in 2010.
Part of the raison d’etre behind launching the center is to create an academic home and body of knowledge for the profession. In recent years, the number of universities offering baccalaureate programs in financial planning has surged from 90 to 145, and Keller said there were another 45 universities looking to create programs.
“The future is in business schools,” he added. Research reveals that students are often unaware of the career paths in the financial planning profession and can’t find a program. Frequently it is “tucked away’ in the agricultural or home economics department.
Keller said the role of the center will be to support the next generation of academics and aspiring students, not to compete with university programs, as some have feared. It hopes to offer opportunities for both research and publishing.