Academic journal article Journal of Financial Counseling and Planning

A Study of Interest and Perception of the Financial Planning Profession among Finance Undergraduate Students

Academic journal article Journal of Financial Counseling and Planning

A Study of Interest and Perception of the Financial Planning Profession among Finance Undergraduate Students

Article excerpt

(ProQuest: ... denotes formulae omitted.)

In 2006, there were approximately 176,000 financial planners in the United States, and the outlook for job growth during the years 2006-2016 was projected by Department of Labor (DOL) to be 40.9%, much faster than average for all occupations (Dubofsky & Sussman, 2009). This growth projection is still going strong, as seen by the DOL's 32% job growth projection during the years 2010-2020. That growth amounts to about 66,400 new jobs from 2010 to 2020 (Corbin, 2013). On the other hand, the housing bubble burst in 2007 and the collapse of mortgagebacked securities led the stock market downward from 13,930 for the Dow Jones Industrial Average (DJIA) in October 2007 to 7,608 in March 2009 (Yahoo! Finance, 2015). In the meantime, unemployment went from 4.7% in late 2007 to 10% in October 2009 (Bureau of Labor Statistics, 2015). Since 2009, the economy has rebounded to a great extent, with unemployment rate falling to 5.6% and the DJIA rising to 17,823 at the end of 2014.

To understand the impact of these changing economic conditions on students' expectations of the financial planning profession, we initiated this project in the Fall 2009 semester at the College of Business of our state university, which is in the Midwest region of the United States.

We conducted an annual survey of students taking courses in the Finance department and asked a series of questions that concentrated on students' demographics, interest, and perceptions of financial planning as a promising profession. Survey data were collected until the 2013-2014 academic year for 5 years.

A recent report from the November 2013 issue of Financial Planning Magazine (Corbin, 2013) indicated an "advisor shortage" problem that has been going on in the United States. Most fresh financial planning graduates in 2013, even those with little experience, were able to land jobs, and many of them had several job offers. At least three factors contributed to this talent shortage. On one hand, the demand is increasing when baby boomers head into retirement and seek financial advisors for help. On the other hand, the advisory industry is likely to shed 25,000 positions between now and 2017 because of advisors' own retirement without sufficient back-filling of new advisors. This is projected by Cerulli Associates in September 2013 (Corbin, 2013). Furthermore, according to this report, "Educators say they struggle to recruit students into planning programs" and "There is a sharp fall-offbetween the few outstanding candidates and the rest . . . it's a bit of a needle in a haystack" (Corbin, 2013, p. 58). Given the imbalance between supply and demand of financial planners, students with this career goal may find themselves in a good spot in today's tough job market. It is thus at least puzzling to see financial planning programs struggle to recruit students and graduate much fewer talented financial planning graduates than needed by the industry.

We believe that our study may contribute to the understanding of students' perception and interest in the financial planning profession, and also hope that the results provide some insights into the puzzle of the imbalance between the supply of and the industry demand for financial planners. This article is organized as follows: We first provide literature review on the perception of the financial planning profession. We then discuss the survey and its summary statistics and present our empirical models and results. Finally, we conclude this article and discuss potential future research.

Literature Review

Past literature studied the perception of the financial planning profession from the perspectives of consumers, practitioners, and students. As of now, however, to the best of our knowledge, this strand of literature is rather limited. Regarding student perceptions and interests of financial planning profession, Pope and Howe (1991) found that students' educational and career aspirations were contributing factors in their attitudes toward financial planning, and those who had higher level of interest in financial planning were those who desired to pursue their future in law, government, graduate school, self-employment, and as housewives. …

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