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The stories some financial planners tell about getting into the business -- cold-calling potential clients out of the phone book and being forced to sell certain financial products -- are foreign to the 26 students in Dr. Shee Wong's financial-planning class. Like many in the next generation of personal financial advisers, they are going to college to learn the craft.
With the launch of a financial planning minor, the University of Minnesota Duluth business school joins a growing number of financial planning programs that are emblematic of the industry shift away from selling financial products and toward selling financial plans designed to meet clients' life goals.
Financial-planning programs are popping up all over the country to prepare enough advisers for the onslaught of baby boomers worried about running out of money in retirement. According to the Bureau of Labor Statistics, the number of workers employed as financial advisers is expected to increase by 30 percent from 2008 to 2018, a pace much faster than most occupations, although the agency expects tough competition for these jobs. The median wage for a financial planner is $68,200; in Minnesota, it's $53,910.
A growing number of these professionals will try for certified financial planner status, or CFP. The designation, requires courses in everything from estate planning to investing plus in-the-field experience. When it was created in 1973, 42 planners added CFP to their business cards. Today, more than 62,000 advisers have the CFP designation. In Minnesota, the University of St. Thomas and Minnesota State University, Mankato currently have programs registered with the Certified Financial Planner Board of Standards.
The University of Minnesota Duluth program, which is housed in its Labovitz School of Business and Economics, is in the process of registering. A technology lab funded by online brokerage TD Ameritrade and Bloomington-based JNBA Financial Advisors is central to the program. Students routinely watch JNBA's investment committee meetings via video conference and employees are made available to students. JNBA uses part of the lab for its new Duluth office. The school and its partners won't reveal the exact cost but said it's a six-figure investment.
Unlike many other CFP programs, which teach the materials in a classroom setting using textbooks, lectures and practice problems, in Duluth hands-on learning is key.
Wong, head of the finance program, is downright giddy about his students having access to real, live financial advisers. "I can only teach from the book. I have no experience about how it's done in reality. [JNBA advisers] have that experience ... and that has a big impact," he said.
Wong worked closely with Richard Brown, CEO of JNBA and a University of Minnesota Duluth alumnus, to develop the program, which is centered around teaching students to be fiduciaries that place their clients' interests before their own financial gain.
This is a hot topic in the industry, and the Securities and Exchange Commission is currently considering whether to require everyone who dispenses financial advice to adhere to this standard no matter how they're licensed.
"People are becoming much more educated on the difference between selling a product, making a commission, and the other side ... investing for a fee and having a fiduciary responsibility," Brown said.
The program has attracted interest from career-changers and non-students. A continuing education certificate program is on the drawing board.
On a recently cloudy afternoon, students hunched over laptops loaded with powerful financial planning software and worked on case studies designed to prepare them for real client meetings. How can the couple who recently graduated from college save for a house and meet student loan obligations? What does the family with young kids need to do to pay for college? The quality of these cases will make up half of their grade.
More than 150 miles away, JNBA employee Marie Williams sat in front of her own computer in the firm's Bloomington office, fielding questions about MoneyGuidePro software and the trade-offs between buying a house with a small down payment or waiting to save up 20 percent of the home price.
Earlier this month, after the Federal Reserve pledged to buy $600 billion worth of bonds in an attempt to jump-start the economy, students piled into the technology lab to hear JNBA's chief investment strategist discuss the move and how it may affect the firm's clients.
New to some of the lingo, senior Chris Musser said the conversation was hard to follow, but a Powerpoint presentation helped him gain understanding. His classmate Ron Moen, 20, got a lot out of the experience.
"It's really kind of cool to see what we talk about in class and how it applies in the real world," he said.
Kara McGuire • 612-673-7293 or kmcguire@startribune.com
