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10 Tips For New Financial Planners To Maximize Career Progression

Posted by Michael Kitces on Monday, November 19th, 12:05 pm, 2012 in Personal/Career Development

Getting started as a financial planner is difficult. Although not quite the ugly environment of decades ago, where every prospective advisor was simply thrown out into the cold to fend for themselves trying to find clients in a brutal demonstration of natural selection and survival of the fittest, the fact that financial planning is still dominated by small firms with limited experience in hiring and training makes formal career paths rare. Sadly, financial planning still has quite a ways to go to create the sorts of clear career progression paths that exist in the fields of medicine, law, and accounting. Nonetheless, there are certainly ways to increase the likelihood that each step you take in your early career will be a positive step forward. In this blog post, I give my own top 10 tips for new financial planners looking to maximize their career progression. 

  1. Get your CFP certification. Fortunately, most people entering the financial planning world today have already gotten this message, but in case you haven't, you heard it here first - go get your CFP certification. Ultimately, getting your CFP certification is crucial for two reasons: 1) if you want to give comprehensive financial advice, you need to know what you're talking about in the first place, and the CFP educational curriculum is a fantastic starting point to ensure you're competent; and 2) the CFP certification is increasingly becoming the baseline standard that any firm serious about financial planning expects to see you have, or at least be working on. Notably, if you're just getting started in the business, you won't be able to actually use the designation, as you'll lack the Experience requirement; nonetheless, get enrolled in a CFP Board registered program and start your education. And yes, this applies even if you already have another professional license in law or accounting or a graduate degree like an MBA; those professions and degrees have a lot of overlap to financial planning, but do not provide the same comprehensive education (although as background they'll certainly make a few sections of the CFP exam very easy for you!).
  2. Get a job. Yes, I realize you may already be looking to get a job in a financial planning firm, but let me emphasize this: get A job. It doesn't have to be THE job. I don't want to belittle the importance of taking your time to find a good firm where you can learn and train (or working with a firm that can help you find such a job), and you should certainly be cautious not to take a position that will require you to go out immediate and get your own clients to survive unless you really want to take on that kind of entrepreneurial position. But don't spend too much time trying to find that perfect position from the start, as it's kind of like trying to hit a home run your the first time at the bat - trying to swing harder for the fences may increase the odds you hit it out of the park, but it also increases the odds you strike out entirely. And you may not even realize exactly what direction you want to take your financial planning career until you've been doing it for a few years, and really find what you enjoy. The key aspects you should look for when trying to get that first financial planning job: make sure it's a firm that is really serious about doing financial planning, that you're a good fit for the person you will be working for, that you can focus on learning and getting some experience (that includes operations and administrative experience!), and that you will have an opportunity to be involved in the process (even if it's just behind the scenes for the first year or few). If you really want to hang your own shingle and start your own firm, don't; make that your second job, not your first.
  3. Don't stop learning. Notwithstanding the importance of getting your CFP certification to ensure basic competency in providing comprehensive financial advice, earning the CFP marks should be considered a starting point, not an end point, for your education. So what to do after you're done with your CFP educational curriculum? Personally I think the best option is to pursue a Master's degree in Financial Planning, which provides a broad but more in-depth financial planning education, and can be done through distance learning with a light courseload through a number of organizations, including the American College and the College for Financial Planning. Alternatively, if you have a particular interest in specializing in a certain area of financial planning, there are many focused advanced designation programs to consider, including the CLU for life insurance, the CFA for financial and investment analysis, the CPWA for private wealth management, and more. In the long run, you're going to want to pick a particular niche or area to specialize, but early on you'll be focused more on learning and getting some experience in your first job (especially if you're working as a staff member in a financial planning firm, and not out trying to get your own clients from scratch). Also, while it's important to continue learning, don't delay on the prior step - get a job and get some experience, both because you'll need it to get your CFP certification, and because it's frankly easier to really learn the information when you're doing it anyway! Work on your education part-time while you are working.
  4. Join an association. If you want to be treated like a professional, you need to be a part of a professional membership association. Your primary choices are the Financial Planning Association (FPA), or the National Association of Personal Financial Advisors (NAPFA); the primary difference is that the latter is for advisors compensated only by fees, so you can only be involved there if you work for a fee-only firm. If you're eligible for either, try out a meeting or two with each (if there are local groups for both in your area), and see which one is more comfortable for you. (If you are coming to financial planning as a CPA, the Personal Financial Planning section of the AICPA is also a good option in this category.)
  5. Join a young/new planner's group. The associations all have a group for young planners to join, that gives them the opportunity to network and get to know other young planners. For the FPA, it's NexGen; for NAPFA, it's Genesis. The early years of your career will have challenges, and it's good to have a group of peers going through similar difficulties, with whom you can relate, commiserate, and get some friendly advice. If you're a career changer who is new to financial planning but not "young" (as both NexGen and Genesis have age limits), consider the FPA's MPACT (Mid-Profession And Career Transition community) group instead.
  6. Get a mentor. In continuing to build out your peer and support network for your early years as a financial planner, get a mentor (or several). Mentor relationships can be formal or informal. For a formal mentor relationship, check out the mentor programs available through both the FPA's MentorMatch and the NAPFA Genesis Mentor Program. Alternatively, if there's a particular person you want to work with as a mentor, reach out to him/her directly as well. Bear in mind that mentoring means different things to different people, though, so if you reach out yourself you may need to give the relationship some structure; I suggest buying yourself, and your requested mentor, a copy of "The Heart of Mentoring" by David Stoddard to help set a roadmap for expectations. For an informal "mentor" relationship, just keep it simple - reach out to anyone you think you can learn something from, offer to buy him/her lunch, ask a lot of questions during your time together, and then just listen and learn! You'll be amazed at how much most fellow planners are willing to share, especially with someone who's new to the business.
  7. Go to a conference. As a part of both continuing your education, expanding your network of relationships, and overall professional development, go to at least 1 conference per year outside of your local area.  In the past I've written about highlights for many of the best financial planning conferences, but if you're a newer planner, there are two others you should seriously consider: the FPA Residency program, and NAPFA University (if you're a NAPFA member). The FPA Residency program is a standalone intense training program - so intense, in fact, that the week you spend there is eligible for 3 months towards your CFP certification experience requirement! It's not cheap (although there is a scholarship program to help), but if you're planning to attend, the FPA member discount alone makes it worthwhile to join the FPA. If you choose NAPFA University, you'll attend one of the main NAPFA conferences, but simply participate in the NAPFA University track; although not quite the intensive and immersive experience of FPA Residency, the upshot is that you'll get a bit more opportunity to interact with practitioners at all levels across the conference itself. If you're looking for something in a larger conference setting like NAPFA University, but aren't eligible for NAPFA membership itself, there is a Nexgen track at the FPA National conference that's worth considering as well.
  8. Volunteer. Now that you've spent some time engaging in one of the membership associations, volunteer and give back. Join a committee for the local chapter or study group, or volunteer to contribute some of your time to the national organization. Volunteering is not only a positive for the simple chance to give back to your profession, but it becomes an opportunity to meet people, network to future jobs, build relationships with future colleagues, and find additional mentors. If you're thinking of starting to build your own business and clients someday, begin to volunteer and establish relationships with the community you someday hope to work with, whether that's joining the local Chamber of Commerce or a specialized association in your target market.
  9. Tackle your demons. You're not going to be perfect at everything coming right out of the gate, and you are probably aware of some of your weaknesses. Tackle them. Are you afraid of public speaking? Join Toastmasters. Looking to hone or start building some leadership skills, or learn to network better? Check out Dale Carnegie training. Are your technology or typing skills behind where they should be? Find a class for it. In the long run, you're going to be most successful by focusing on your strengths, but at some point you'll have to shore up some of your weak points as well, and there's no time like now to get started.
  10. Have some patience. Building a successful career in financial planning takes time. Accept this. No, this doesn't mean that you should stay in a dead-end job with a firm that isn't growing, but it does mean that it's unrealistic to expect that the firm will hand you a bunch of clients of your own in your first year. Realize that every job you can do within a financial planning firm will teach you something - yes, even those administrative tasks, because the reality is that paperwork matters and botching it for clients is a great way to lose them - and there's nothing wrong with that, as long as next year you get to spend a bit more time on bigger and better tasks and job duties. If you're not happy with how things are progressing, ask to sit down with your boss and then ask for more responsibility, but accept that sometimes the answer will be "eventually, but not right now" and that you'll need to ask again in 6 months. Most of those successful planners you see took 7, 10, or 15 years before their firms got to a comfortable point of providing a stable income to them, so be happy that in today's world you may get to a similar place in only 5-10 years.
So what do you think? Did I miss anything important on my list here? Is there something you'd disagree with?  Do you have tips for new planners from your own experience? Or any regrets you'd suggest someone else not repeat?

  • http://www.serenityfc.com Alan Moore

    Great advice Michael! I left my first job after 1 year, and was really surprised that hiring firms didn't care that is was a short stint. Take the first position based on what you can learn, not how much money it pays. I learned more in 12 months than most learn in a decade, because of the mentorship and training the position offered.

    Don't discount the value of a great mentor. It will set you up for long-term success.

    • Michael Kitces

      Alan,
      Indeed, while I really do NOT like to encourage "job hopping" at all, I still think we sometimes put too much pressure on getting that FIRST job right, and underestimate how valuable good experience can be even if the position doesn't stick in the long run.

      The upside is that you did get to work in a job and a firm that is truly serious about financial planning, which gave you the kind of experience that really makes it valuable!
      - Michael

  • http://www.linkedin.com/in/grantawebster Grant Webster

    Very good advice, Michael. As a young(er) planner, I can personally attest to the career benefits of #9. I joined Toastmasters to help with preparing for seminars and client presentations. From day one it has been a great help. To quote one of the members, "join Toastmasters to help keep those butterflies flying in formation."

  • http://www.linkedin.com/pub/david-ward/20/450/502 David Ward

    Great advice Michael. I'm a young planner and just recently attended the FPA Residency program at Lake Arrowhead. This was a FANTASTIC opportunity for me to cultivate presentation/meeting skills that many new planners don't have (from all that time in the back office on Naviplan). Not only was this beneficial for learning about framing and conveying information in a meaningful way, but it was a great networking opportunity. The mentors in the program (Jon Guyton, Gregg Clarke, Kacy Gott, Debbie Grose, Carolyn Kaufman, Sabrina Lowell) are all very successful and provided us with tons of great direction.

    I would recommend the FPA Residency Program to any new planner. Actually, I believe next year they are also offering one on the east coast (at the University of Georgia).

  • http://iaminvest.com/ Neil Krishnaswamy

    Michael, I enjoy your thoughtful blogs and I thank you for today's great insights! Last year I (officially) changed careers into financial planning AFTER taking the CFP exam. So while I still need 2 years of work experience before I can use the marks, I highly value your advice in point #3. The difficult choice for me, and perhaps others, is whether it's better to broaden the educational base with a master's degree or pursue specific designations. I've been leaning towards the latter, while you appear to generally prefer the former. Do you find that the MSFS (American College) and MSPFP (College for FP) degrees are valued equally in this industry?

    • Michael Kitces

      Neil,
      Thanks for your comment!

      In practice, I don't see any real difference in industry perception between the MSFS from American College and the MSFP from College for FP. Both are reasonably well respected as institutions in the industry. Realistically, I would choose whichever is more appealing to you based on content, curriculum, learning options, price, flexibility, and whatever other factors are important to you.

      In terms of a Master's degree versus a specific designation, I think it's a matter of where your passions are and, if you know yet, where your business or career is heading. If you have a passion for investments, and hunger to do more investment analysis, then by all means go for a CFA. But if you're not really sure what your path is necessarily going to be yet, there's little "harm" in pursuing a Master's degree and making a decision to do another designation later. Being more educated as a financial planner isn't going to be a liability for your financial planning career!

      I hope that helps a little?
      - Michael

      • http://www.iaminvest.com Neil Krishnaswamy

        Thank you so much Michael. Your advice is most helpful. I agree there's little harm in more education! Back in August, you provided another neat way to look at this when you questioned whether planners are giving clients good advice when recommending they save versus invest in their own human capital. That was an eye-opener, and certainly applicable to my own situation now. Thanks for your great contributions Michael, and I look forward to reading your next posting!

  • Sophia

    Michael, such great tips for young planners! I really think that having a mentor is huge! (Shout out to Scott Oeth! You're the best!) Plus, I love the advice "don't stop learning!" That's part of the reason why I love this profession: there's always more to learn and it is constantly evolving. I think it's a really exciting time to be a Gen Y planner in this profession because I think we are on the cusp of some major changes. It's so easy to get wrapped up in the day-to-day activities, but whenever I attend a conference I'm reminded of how passionate I am about this profession and how exciting it is! Interesting advice about joining Toastmasters. I think that's a great tip! People used to be really confused when I told them my undergrad is in Theatre Performance and I'm an actor-turned-financial planner, but it's really helped me in this profession more than I ever thought it would! I think I've really done almost all of the things you've recommended on this list except #10: patience is not my virtue. Oh well, there's always room for improvement! This is one of mine! Happy Thanksgiving to you and your family!

  • Aaron

    Hi Michael,

    Great post all around as usual. I'm curious why you don't emphasize more on marketing and learning sales skills though. I've been in the business for five years and can say that learning sales skills and marketing earlier would have definitely helped propel my career forward at a much faster rate than I have experienced. You can be the smartest/best FA in your town, but if you aren't able to get in front of people to show them that, your career will end faster than it takes to grade a Series 7 exam.

    I have seen too many good people who would of made great FAs leave (or forced out) this career because they weren't able to reach enough people fast enough. At the end of they day clients don't care if you have a CFP (although it is great to have one and you'll probably provide better advice) they care that you understand them and their needs and that you can communicate the solutions to them. And that is the selling process.

    I've spent 5 years fighting to make a living in this career and it's just over the past year that I've realized nothing matters unless you're talking with people about their issues. And this probably isn't a surprise to anyone but they aren't exactly knocking down the doors of our firms unless we have good marketing and know how to communicate.

    If you're starting your career at a firm that just expects you to learn about the financial planning process and not bring in clients, none of the above pertains to you. However, if you're one of the many whose careers depend on them finding clients and developing your professional knowledge. Then I would highly recommend you seek out mentors and advice about marketing and sales before learning how to put together a retirement plan. You can always lean on those same mentors for assistance with putting the plan together or developing an investment portfolio.

    In summation, all of the above advice is spot on, but it doesn't make one difference unless you can market yourself and sell your services in an ethical manner.

    P.S. Michael your weekend reading suggestions have become a mandatory part of my weekends, thank you.

  • CJ Camarda

    I enjoyed your piece as I landed on it indirectly. Been in the business for 15 years and I agree with the melding of sales(crucial) ability with knowledge. I have many of the familiar dez's CFP, ChFC, CLU as well as a CFS(easy) and probably the most valuable since 2008's collapse the CMT-Chartered Market Technician via the MTA(technical analysis-as many wealthy people are familiar with all these trading platforms with these indicators and I found out with certain personalities you better be able to assess trends on a chart both long/short term chart. But I must say the sales ability and continuing education as I train all year round is pivotal in gaining trust with HNW individuals that I 40% of the time will get them to 'engage' in a first meeting with me for large amonts of money. Ok enough on the sales diottibe, I am looking now at the CPWA vs the MSFS in tackling larger more complex cases and clients- 10 Million and above/closely held businesses etc.....thus far been a coin toss, perhaps you may be able to shed light and delineate beyond IMCA and Am Colleges respective web site. Thanks in advance!

    • Michael Kitces

      CJ,
      Thanks for the comments.

      I'm a fan of both the CPWA and the MSFS programs; I'm an instructor for the former, and a graduate of the latter.

      If your goal is specifically ultra-high-net-worth, I would probably lean towards the CPWA here, as the curriculum is a bit more specifically designed to serve the planning needs of that group. While you may cover some relevant topics and content in the MSFS program - particularly around a few of the electives - the core of the program is still financial planning focused, not wealth management (which I do distinguish as different disciplines - see http://www.kitces.com/blog/archives/436-IMCA-Defines-The-Difference-Between-Private-Wealth-Management-And-Financial-Planning.html).

      So I'd characterize the MSFS as "deeper financial planning" but the CPWA as "deeper ultra HNW wealth management". Both are strong programs, but given the context you present here, it sounds like CPWA may be the better fit.

      I hope that helps!
      - Michael

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  • Michael Kitces

    Aaron,
    Thanks so much for the feedback!

    I don't disagree about the importance of learning marketing and sales skills to build a personal financial planning practice. Indeed, it doesn't really matter how much you know if you can't convince anyone to do business with you.

    The reason why I don't feature it more prominently here is that, in the longer run for financial planning, I still see that as something to be done AFTER one learns the fundamental skills necessary to BE a planner and give advice. I do think a balance is necessary between skills and knowledge overall - that's why I suggest working sooner rather than later and not staying in school for knowledge for "too long" without any experience.

    But for the young new financial planner, frankly I wouldn't recommend starting a financial planning practice from scratch as a 22-year-old anyway. I'm not convinced its viable for all but the most exceptional of candidates, as evidenced by the horrific "failure" rate from the business for people who start down that path. It's somewhat more viable for career changers, who have more of a natural network they can rely upon.

    I do think that sales and marketing skills are important to develop after the first couple years as a financial planner, though, and that delaying too far beyond that will certainly inhibit longer term career growth. Perhaps that means I'm due for a follow-up article here talking about "next steps" after the ones articulated here, as I envision this is primarily about the first 0-2 years or so, and there's a lot more to do to take a career to the next level in years 3-5!

    Thanks again for the feedback, and happy to hear you enjoy Weekend Reading as well!

    With warm regards,
    - Michael

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