As someone who has almost survived graduate school, I can tell you one thing: I am not the same person I was before I started my program. Earning a master’s degree in financial planning has felt like a rite of passage into the career of finance. It has groomed me in many different ways, helping me build up an immense amount of knowledge in various areas that impact our financial lives. It has also helped me develop a new network of relationships with classmates and some of the best practitioners in the field. Throughout my study, I’ve been surrounded by some very bright people!
Here are five things that the program has taught me well about a career specializing in personal finance:
1) “Comprehensive” financial planning is a holistic, professional practice.
As GGU professor Elissa Buie, CFP® often points out in our Cases capstone course, financial planners have to have big brains and emotional intelligence. It is very helpful for practicing advisors to learn about behavioral finance — a field of psychology that gives insight on the emotional tics and behaviors that support or hinder us when making financial decisions. My graduate program also taught me how to crunch numbers, do forecasting, backtest and build investment portfolios. We studied tax and estate-planning law. I smile now when I think back to 2014, when I didn’t have a clue on how to use a HP12c financial calculator, what modern portfolio theory was, or how to file my own tax return!
2) The earlier you plan, the better off you’ll be!
Managing personal finances can be complex, frustrating and time-consuming, but it is not an impossible area to learn or improve upon! In fact, our lives depend on it! Sadly, in the US we simply have never done a good job of teaching people at a young age how to properly manage their money and make good financial decisions. This lack of education can be especially harmful to a person later in their adult years.
I smile now when I think back to 2014, when I didn’t have a clue on how to use a HP12c financial calculator, what modern portfolio theory was, or how to file my own tax return!
Financial planners help clients take a proactive approach towards better financial health and well-being by guiding them in areas such as how to build an adequate emergency fund, how to get rid of and avoid using high-interest rate debt to fund their lifestyles, and why it is important to pay attention to other areas like discretionary spending, taxes, and holes in insurance coverage or estate planning.
3) Delivering financial advice cannot be done in a “one size fits all” fashion.
Every single person has different needs, attitudes towards risk, habits, and things they want to accomplish with their money. Financial planners/advisors have to know how to ask the right (often tough) questions, so that they can truly understand a client’s situation. We empower our clients by helping them strategize in a way that is forward-thinking, and we help them consider and understand the “what-ifs” that might come along with making any number of financial decisions. It’s exactly what makes practicing financial planning such an interesting field!
I wouldn’t call myself a Steve Kerr of financial planning (not yet as least!), but we have similar jobs to do. Thankfully, I learned some solid coaching skills from GGU professor Saundra Davis….
4) There’s a dire shortage of women & minority financial planners
Step inside the corporate offices of a wirehouse, independent RIA, or brokerage firm today and you will see two things: a lack of women advisors and a lack of minority advisors. Since I can check off both of these boxes, I can tell you that women and minorities are not often encouraged to go into this field. Professional advocacy groups like the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA) are trying to change this; but to-date those who have been delivering financial advice are, more often than not, white and male.
Compare this with the below illustration taken from a research study published by the Journal of Financial Planning on the usage of financial planners by different racial groups in the U.S.
This graphic shows a heavy imbalance of wealth between different racial groups. Much of this comes from the fact that Black and Hispanic households, and women, have not shared in the financial rewards of the last century as much as white and Asian households.
I believe strongly that if more women and minorities enter our field, it will expand our reach into these communities, and hopefully encourage more black and brown households and more women to seek the help of financial planners in creating long-term strategies for building personal wealth.
5) Be prepared to wear a coach’s hat.
A financial planner has to wear many hats, and being a financial coach is often one of them. Imagine Golden State Warriors NBA head coach, Steve Kerr, as he keeps his players focused on the court. At every game, Coach Kerr and his coaching staff remind the players to remain calm, remember the game plan and make the necessary adjustments in order to execute big wins. I wouldn’t call myself a Steve Kerr of financial planning (not yet as least!), but we have similar jobs to do.
Thankfully, I learned some solid coaching skills from GGU professor Saundra Davis, like how to develop a communication style while working with clients that can help clients assess their own solutions “toolkit” — problem-solving techniques that have worked for them in past experiences that can be creatively applied and repeated towards achieving a financial goal.
Nicole Middleton is a graduate student at Golden Gate University’s Master of Science Degree in Financial Planning program. She is also a practicing Financial Advisor and co-owner of an independent financial planning firm, Strategy Squad Insurance Services, LLC based in Oakland, CA.
This article appeared in Nicole Middleton’s LinkedIn stream on April 3, 2017.