The Best and the Brightest

My duties as a part-time faculty member of Kansas State University’s CFP-registered financial planning program included taking a group of students to this year’s FPA “Experience” Conference in San Diego. Students love getting this real-world exposure to financial planners and the financial services industry, and I’m sure it’s an eye-opening experience for them.

This year, as it turns out, I probably learned as much or more than my students from spending time with them. It was eye opening for me to see not only how knowledgeable today’s students are, but how good their people skills are. The professional training of planning students was great when I was in school, but it has come a long way in 12 years. I suspect most advisory firms don’t know the quality of today’s students’ education, but it became clear to me that how well advisory firms adapt to the much higher quality of young planners today will determine their ability to grow and succeed in the future.

To start, the first thing I noticed about these students is how good their people skills are. I could see it clearly in the way they acted with each other and especially in their interactions with advisors. They were particularly attentive, connected with people, got them to open up and asked them probing questions.

So, I asked a few probing questions of my own and found out that K-State and other schools now have intensive programs designed to make students better at interacting with clients. Students are taught counseling techniques that are used in other people professions. Then, at K-State at least, they are given face-to-face, real-world experience working with clients in a program that provides financial counseling to other students. The planning students are observed with clients by faculty members and other students through two-way mirrors. Then their performances are graded and critiqued. How many of today’s older advisors have ever had their client meetings observed and critiqued?

That kind of feedback can really elevate one’s game, judging by the students I observed. These “kids” can talk, and about some serious stuff. They even made me question my communication skills. Owner/advisors used to say it’s great that financial planning graduates have technical knowledge, but it takes years before they will be able to communicate effectively with clients. Today’s young advisors will benefit from experience, but they are much farther up the learning curve than my peers and I were a decade ago—a fact that today’s firm owners can’t ignore if they are going to successfully recruit and work with the students coming out of top-notch planning programs today.

My K-State students were clearly using their client training communication skills when they talked with the successful advisors they met at the FPA conference. Whether it was conscious or merely the result of their training, they made the older advisors feel comfortable and got them to open up and talk about themselves and their firms. In the majority of cases, the students were subtly interviewing advisors, trying to find out everything they could about that advisor (similar to how you would a client) and making judgments about whether these advisors would be good candidates to work with (similar to how you judge whether a prospect would be a good client).

Which leads me to the second important thing I learned about today’s financial planning students: They have a very different employment mentality than my graduating class did when we were looking for our first planning jobs. Before the dot-com crash, financial planning practices were booming and the demand to hire young advisors was very high. (What I’m going to say next may sound counterintuitive, but just bear with me.) Consequently, we weren’t very picky about our first job, because we knew we needed to gain practical experience to be marketable; we all planned to look for our ideal jobs after we had a few working years under our belts.

Fast-forward to today’s tough economy and job market for young planners, where good jobs are far less plentiful. You might think this would make today’s planning students inclined to take the first job they can find, but the reality is just the opposite. My conversations with today’s young planners revealed that unlike my generation, they are very focused on finding the “right” job for their first job after graduation. Why? Because today’s job market is much worse than it was in our day; they don’t know if they’ll be able to find another one down the road, so they want to make their first job the right job for them.