The first wave of financial planners is graying at the temples, and there's a big need for a new generation to take their place. The median age for financial planners is 52, and that number hasn't budged much since 2008, which means the industry isn't getting younger.
To make sure there are young people in the pipeline to take over and keep the profession vital, the National Association of Personal Financial Planners has created a networking group called "Napfa Genesis" to help nurture young, fee-only financial planners.
Founded by David Grant of Vantage Financial Partners in Arlington Heights, Ill., Napfa Genesis provides support and networking opportunities, as well as educational services, to college students or those just entering the profession. The group also holds monthly webinars on issues pertaining to new planners.
It was created in part to help students and the youngest planners learn from those with a few years of experience; to that end, the group pairs new members with existing Genesis members as mentors.
"Young people have a lot of unrealistic expectations," says Grant, 29. "They think they will get their education and their CFP designation and then be advising large numbers of high-net-worth clients within a couple of years. But what they should be learning is everything about the profession, about the company they are in and about all kinds of clients. If they rush the process, they make mistakes."
Genesis is open only to people who want to be-or currently are-fee-only practitioners. Wirehouses and other firms are willing to hire and educate newcomers if they want to sell specific products, Grant says, but there is a lack of places for potential fee-only planners to look for advice.
"We are hopeful the creation of Genesis will help younger planners in the industry learn what they have to do to be successful while making fee-only financial planning stronger in the future," Grant says.
Membership is open and free to all Napfa members, affiliates and students under the age of 33. "We're trying to make the group a natural peer group for those leaving college, and 10 years seemed to be a good fit," Grant says. (Interested people can contact firstname.lastname@example.org.)
Less than 3% of financial planners are younger than 30 years old, while the largest group (almost 30%) are 50 to 59 years old and nearly 75% are 40 or older, according to the CFP Board of Standards.
Dr. Vickie Hampton, professor and chair of the personal financial planning department at Texas Tech University, says those who started the financial planning profession are "graying" and that there is a need for new blood in the industry.