Executive Summary The roots of financial planning are in insurance agents and stockbrokers who sought out a way to deliver better advice and guidance to their clients. Similarly, the roots of financial planning education have long been in “adult education” certificate programs that took experienced and active advisors back to school to gain the educational knowledge they needed to sit for the CFP exam and earn their CFP certification. Over the past decade, though, we have witnessed the emerging rise of the “financial planning academic” – pioneering students who went through the first Ph.D. program from Texas Tech (supported in large part by an early $2,000,000 grant from the CFP Board with the specific vision of supporting a growing population of financial planning academics), earned their doctoral degrees, and are now beginning to go forth and establish undergraduate, graduate, and Ph.D. programs at other universities across the country. As the trend continues and the Texas Tech/CFP Board vision is fulfilled, the number of university-based financial planning programs continues to grow, and financial planning is well positioned to gain more academic credibility. And as the financial planning academic community continues to grow, so too are the resources serving them. From the Academy of Financial Services, to the recently (re-)introduced academic track at the FPA annual conference, to the CFP Board’s latest round of recently announced academic initiatives, including a new “think tank” financial planning research center and also a new academic Journal, financial planning is well positioned to continue its drive forward towards increasing academic rigor and recognition… including not only a rising volume of college-educated financial planners but perhaps spawning some research that will slay a few financial planning sacred cows and help to advance not only the financial planning body of knowledge but how it is applied by practitioners as well!

The Rise Of Financial Planning University Programs

The first class for CFP certificants dates back to 1973. However, the reality is that for its first 15 years, the education of financial planners was the domain of adult education programs (specifically, the early version of the College for Financial Planning). The educational track was developed for those who had been in the industry for years already – generally as a life insurance salesperson or a stockbroker – who wanted to transition his/her practice towards financial planning. In 1985, the CFP Board was officially spun off from the College of Financial Planning to become a standalone organization to maintain the CFP certification standards, and once separated an increasing number of schools were allowed to become CFP Board registered programs, with the first 20 universities recognized in 1987 (see the IBCFP announcement at the time!).

While the number of financial planning programs in degree-granting programs grew in the early years, the pace was slowed significantly by several factors. The first was the general lack of recognition of financial planning as a bona fide profession unto itself, and a perceived lack of rigor that was associated with it; as a result, early financial planning programs were primarily in school divisions ranging from “agricultural economics” to “life sciences” rather than in finance or business programs. The second challenge to financial planning programs at degree-granting institutions, in the context of academia itself, was the lack of a credible “terminal degree” – i.e., a Ph.D. end point – for those who were teaching financial planning and creating programs. Simply put, it would be difficult for financial planning to ever be fully recognized as such in academia as long as there were no financial planning Ph.D. academics to lead them; of course, the classic chicken-and-egg program was that few programs had any interest in developing a Ph.D. program, either!

Nonetheless, in 2000 the first Ph.D. program in financial planning emerged, from Texas Tech University, and gained momentum 2 years later with a significant $2,000,000 grant from the CFP Board itself. One of the stated early goals of the program was to begin to grow a base of “financial planning academics” – those with Ph.D.s in financial planning who could go forth and start or lead financial planning programs at other universities and colleges, and raise the academic profile for financial planning itself.

A PhD in Financial Planning And The Rise Of The Financial Planning Academic

Since the Texas Tech Ph.D. program started, it has gone on to mint 30 Ph.D.s (and 9 more who have done everything but their dissertation), many of whom have been instrumental in launching or sustaining what are now 5 Ph.D. programs in financial planning, including Texas Tech itself, those at the University of Georgia, Missouri, and Kansas State, and most recently at Louisiana State University (now the first CFP Board-registered financial planning Ph.D. program in an AACSB-accredited business school!). And the CFP Board has stated that there are 3 more Ph.D. programs in development now as well. Texas Tech graduates staff not only four of the five current Ph.D. programs, but have also been instrumental in the development and support of several undergraduate CFP Board registered programs as well, from Utah Valley University to the award-winning students at William Patterson University; consistent with the original vision to support the growth of financial planning academia, nearly 90% of the Texas Tech Ph.D. graduates remain in academia growing and supporting programs; only about 10% have gone on to ‘private industry’ jobs at all.

In fact, overall the shift of financial planning towards more degree-based institutions has been significant over the past decade; it took 15 years from the first 20 institutions to grow to approximately 54 degree-based institutions when the Texas Tech Ph.D. program launched (in addition to even more adult certificate-based programs), and there are now 95 degree-based institutions offering financial planning programs (many of which offer several programs at the undergraduate, graduate, and even Ph.D. level). In fact, in just the last four years alone, the number of Baccalaureate programs has increased by 33% (while the total number of certificate programs has been stagnant), and of the 54 potential financial planning programs currently in development with CFP Board, the majority are baccalaureate programs within AACSB-accredited schools of business and finance. Overall, the current breakdown of CFP Board registered programs reveals that nearly 50% of the programs are now degree-based, after having been dominated by adult education certificate programs in the 1990s and early 2000s! (Note: There are a handful of other doctoral and other programs that overlap financial planning but are not CFP Board registered, and some institutions sponsor more than one CFP Board registered program simultaneous [e.g., an adult certificate and a separate baccalaureate program].)

The significance of this “rise of the financial planning academic” cannot be understated. Not only is the growth of degree-based CFP programs supporting growth in the number of students entering the financial planning profession (though many are just studying financial planning without following through into financial planning careers), but for all recognized and bona fide professions, a thriving academic community that conducts research and advances the body of knowledge is crucial to the growth of the profession (combined with practitioners that put the research into practice). As the number of financial planning Ph.D.s continues to grow, so too with the number of university-based financial planning programs, especially at the graduate and doctoral level, which in turn will help to put forth even more financial planning academics.

Meeting The Growing Needs Of Financial Planning Academia

The significance of the rise of financial planning academics is that they are also emerging as an important constituency unto themselves in the financial planning landscape, who have their own needs and concerns, and are just now beginning to get new resources and focus to serve them.

Historically, the organization supporting financial planning academics, and the intersection of academia and financial planning practitioners, was the Academy of Financial Services (AFS), which has a Call for Papers for its academic publication (Financial Services Review; the subscription comes with membership to AFS) and a conference in the fall (October 16-17 in Nashville) where those papers and other research can be presented.

As financial planning academia has continued to rise, though, other programs have emerged. Last year, the FPA (re-)launched its own academic mini-track at their FPA Experience national conference, which is being repeated on a larger scale in 2014 with a recently announced Call for Academic Papers at their re-branded FPA Business & Education (BE) conference. (Notably, Nerd’s Eye View itself will be the first sponsor for this year’s FPA Call for Papers, which will include two $500 prizes – one for “best applied financial planning research” and one for “best theoretical financial planning research”. The submission deadline is May 30th for those interested in putting their research into the competition!)

More recently, the CFP Board – which has long supported the growth of financial planning academic, including its significant grant to help jump-start the Texas Tech Ph.D. program! – announced several new initiatives as well, including a new “think tank” called the “Center for Financial Planning” aimed to help fund academic research in financial planning (and also how to encourage more young students and also more gender and racial diversity amongst financial planners as well), and the planned launch of a new academic Journal to give rising academics a new place to publish (a crucial step, as most Ph.D.s need opportunities to publish at credible Journals to gain tenure at their universities and there will soon be too few publications to support the number of Ph.D.s!).

As the CFP Board, FPA, and other initiatives gain momentum, and the ranks of financial planning academics themselves continue to rise, a new era of financial planning is emerging – one that will increasingly focus on deepening and advancing the theoretical and research underpinnings of the body of knowledge that financial planning practitioners implement, in a world where sadly far too much of what is done in financial planning is based on rules of thumb and “conventional wisdom” rather than rigorous research and study. In the process, I suspect that we’ll find a number of “cherished” sacred cows of financial planning will be slaughtered, but at the same time there is an increased opportunity for more productive academic-practitioner research collaboration to occur (as in the past, much of the academic research has been very far removed from the practical realities that most financial planners face with their clients). And as the number of academic programs increases, so too should the breadth and quality of financial planning students available to enter the profession (even if we need to produce an ever-larger number of students to account for the fact that not everyone ends out getting a job in their undergraduate major!).

In the meantime, if you’d like to check out the latest in financial planning academia – or possibly contribute and get involved yourself – be sure to check out the academic track that will be available as a part of the larger FPA BE annual conference this fall (or consider the AFS’ own event if you’re interested), encourage any academics you know to submit an abstract of own research to try for the new prizes at this year’s Call For Papers, and stay tuned for further developments from the CFP Board’s new Journal and the Center for Financial Planning as they launch in the coming year!