Where will the next generation of advisors come from and who will train them? The majority of advisors learn their skills at large institutions like wire houses and insurance networks, with some migrating from the provider world. The problem is that this system engenders very little innovation. There are precious few universities teaching these new advisors in an environment that focuses on experimentation and innovation rather than efficiency and hardcore training aimed at getting them out on the street as quickly as possible to start generating revenue.
Some promising new initiatives may be harbingers of change. Texas Tech, a leader in teaching financial planning, is setting up a program to help their 250 financial planning students, who may know how to use social media but may not know how to apply it to the business world. They are collaborating with Finect, a social medial company.
On another front, a group of financial services tech companies have formed a partnership, FASTech, which gives a network of collaborating universities access to their software. Started by an executive at MoneyGuidepro (a producer of financial planning software), the partnership provides a single-access web portal for students at participating universities like Texas Tech and Virginia Tech. The partners include Redtail (CRM), Orion (portfolio management) and five other financial software companies.
While the field of financial planning includes a larger group of advisors, at its core retirement planning is financial planning, since most people save for retirement through their employer's DC plan. Perhaps the DC market should consider sponsoring programs at local universities — a step that’s being advocated by the Legg Mason Retirement Advisory Council, led by Gary Kleinschmidt. While current training and industry meetings are useful, perhaps some of those resources could be allocated to ensuring the longer-term future of the industry. Sacrifice today to have a better future — isn’t that what we ask our clients to do when planning for retirement?
