The Amelioration of Financial Planning:

BY | October 1, 2021


Decades ago, the technology that advisors had at their disposal was aimed at simply selling products since the industry was structured around commissions and sales revenue. Technology has been disrupting industries for the better across the board and financial services is no different. Perhaps no generation understands the importance of integrating technology more than millennials. Will technology replace today’s human advisors? America’s youngest generation is often projected as having little interest in human interaction and would rather work with a computer versus a human. Despite a common framing, “Millennials” just may be the most socially connected generation yet. Despite some negative effects on society, we cannot deny that social media has allowed civilization to become more connected with each other and the youngest generation has embraced this human interaction. A recent study found that today’s group of tech savvy millennials is more likely to engage working with a financial advisor than prior generations. Millennials are the future of wealth management and this generation is more open to working with a financial advisor than prior generations in the past.

FINRA Investor Education Foundation

FINRA Investor Education Foundation

The next wave of financial planners must be tuned into this connection between America’s rising generation, their value of human interaction and how technology can streamline this process. In prior discussions, we’ve touched on how much data is readily at our fingertips. Social media is the obvious driver behind these new channels of human interaction and advisory firms have been rolling out ways to connect and communicate with their client base on multiple levels. The below chart depicts some quantitative measures of the online interactions between clients and their advisors.

Perhaps the biggest change coming from the FinTech world has been the fact that size no longer provides a competitive advantage. Smaller advisory firms can now provide services to their clients that were once reserved for the largest players in the industry. Financial services industry expert Michael Kitces provides an updated “Financial AdvisorTech Solutions Map” on his website helping advisors visualize the breadth of options available to help them service clients. Below is a screenshot of this map; clearly, the FinTech industry is alive and well…

Advisor Education & Development:

Looking back in time, in order to make a career in financial services, you had to sell…..period. If you didn’t meet quotas at the older brokerage houses you wouldn’t cut it. Applicable knowledge and skillset to help clients was not the primary focus, bringing in firm revenue by selling products and securities was. Imagine if dentists focused on getting patients in the chair before learning how to drill on a cavity……yeah…no thanks!

Fortunately, over the years firms have created career development programs to help younger advisors learn about planning concepts first, then providing advice to clients and creating solutions as their skillsets progress. In 1987, the CFP Board registered 25 institutions to offer financial planning education programs to further educate young advisors1. In 2017, the CFP Board celebrated the milestone of reaching 80,000 CFP professionals in the U.S.

As of December 31, 2020, the milestones include2:

  • The number of female CFP® professionals increased to an all-time high of 20,633 – 23.3% of all CFP® professionals — reflecting growth of 3.1% since 2019.
  • The number of Black and Latino CFP® professionals increased in 2020 to 3,688 – a percentage growth of 12.6% over 2019’s number of 3,274. This increase is nearly five times the growth rate of all CFP® professionals.
    • Black CFP® professionals – 1,493 (1.68% of CFP® professionals)
    • Latino CFP® professionals – 2,170 (2.46% of CFP® professionals)
    • Biracial Black and Latino – 25 (.028% of CFP® professionals)

In 2000, the first Ph.D. program in financial planning emerged at Texas Tech University. The University of Texas – Austin recently rolled out their Financial Planning Certificate Program. Below is a program overview directly from the UT Austin website:

Programs such as these are allowing young college students the opportunity to prepare themselves for a career in financial planning. The pool of talented young graduates with a fundamental understanding of basic financial planning concepts has never been more robust. The early stages of a financial planners career can now focus on building knowledge and skill compared to the past where sales figures were the only focus.

Investment Vehicles & Costs:

Figure 5

Gone are the days of having to call up your broker to buy or sell stock in your account. Decades ago, investors only had a few options with regards to tapping into the capital markets. The first publicly available index fund was introduced in 1975 by a fellow named John “Jack” Bogle. Mutual funds have been around for decades in the U.S. but it wasn’t until 1993 when they were joined by exchange traded funds (ETFs). Over recent years, the introduction of passive investment vehicles, increased competition, and the lack of outperformance from traditional Wall Street money managers has pressured firms to lower their fees year after year. A recent article from Morningstar noted that the average expense ratio paid by investors has fallen by more than 50% since 20003.


“Jack did more for American investors as a whole than any individual I’ve known. A lot of Wall Street is devoted to charging a lot for nothing. He charged nothing to accomplish a huge amount.”

– Warren Buffett, 2019 CNBC Interview

Trading costs are also falling and have been ever since May Day back in 1975 when the SEC unfixed commissions on the NYSE.

In 1975, for instance, brokerage commissions accounted for nearly 50 percent of all Wall Street revenues; by the end of 1984, the Securities Industry Association estimates that this had fallen to less than 23 percent4.


Over the decades, lower costs and easier access via the internet have given American investors the ability to partake in the wealth creation of capital markets.

Figure 6 & 7 – Online Trading: An Internet Revolution – Wu, Siegel, Manion – Sloan School of Management MIT

Along with declining overall transaction costs and management fees, FINRA has provided investors with a publicly available tool that aids in analyzing fund management costs over time. The tool is called Fund Analyzer and can be located here.

Planning Techniques:

There is clearly a need for advisors to offer holistic wealth management to address the anxieties of everyday U.S. citizens. For decades, brokers were simply relied upon for investment related advice. As competition grew over time, advisors began to offer comprehensive planning for their clients ranging from tax coordination, estate planning oversight, retirement cash flow analysis, education funding, and insurance reviews amongst many various related topics.

Serving a Need:

Today’s advisors are more equipped with the knowledge to not only provide investment advice on building and managing portfolios, they must also possess expertise in other areas such as taxation, estate planning, insurance, college funding, and retirement cash flow planning. Below are some images from planning software we utilize at Silicon Hills Wealth called eMoney. This software allows us to dissect a clients financial planning profile on an intricate level. Advisors as using tools like cash flow analysis, Monte Carlo analysis, and estate flow charts to help answer client’s questions regarding their future financial outcomes.

Cash Flow Reports:

Figure 11 –

Estate Flow Chart:

Figure 12 –

Monte Carlo Analysis:

Figure 13 –

Improved Regulation:

Since the Great Financial Crisis, regulators have clamped down on Wall Street and its many avenues of revenue generation including wealth management. The adoption of the fiduciary duty when working with clients is becoming more and more common in today’s environment. Michael Kitces has a great visual from a 2020 writing where he provides a summary of the 3 components of the Fiduciary Duty that the CFP Board applies to licensed professionals.


Figure 15 – FINRA Investor Education Foundation

Investors are beginning to use tools such as FINRA BrokerCheck to perform due diligence on their advisors.

An Industry or a Profession:

An industry provides a specific product, service or engages in a specific business activity; whereas a profession requires specific knowledge / skill sets, designations / licenses, and job titles which allows society to distinguish them apart from other professionals. There are many types of attorneys; however, we know that they have all experienced similar academic coursework and have been upheld to specific standards such as passing the Bar exam and being licensed by the American Bar Association within the states they practice in.
Unfortunately, the financial services industry has yet to require those that hold themselves out as advisors to pass a specific exam such as the CFP exam or go through a particular education program prior to calling themselves an advisor to the open public. The industry is evolving as more clients are screening out advisors without these designations and backgrounds. Below is a timeline showing the history of the CFP Board as it grows and transforms the industry into a profession5:

  • The CAT scan is developed in England
  • The compact disk is developed by RCA
  • A CFP exam, consisting of 150 essay questions, is prepared by the College for Financial Planning’s volunteer education committee
  • Margaret Thatcher is elected first woman British prime minister
  • Mother Teresa receives the Nobel Peace Prize
  • First issue of the Journal of the Institute of Certified Financial Planners is published
  • Sally Ride is the first woman in space
  • U.S. deficit is projected at $189 billion
  • The National Association of Personal Financial Advisors (NAPFA) is created.

  • NYSE becomes computerized
  • October 19th, Dow Jones drops 22% on Black Monday
  • President Raegan presents first U.S. trillion-dollar budget
  • P. Kemp Fain, Jr., presents the “one profession, one designation” concept in his white paper, “Unifying and Professionalizing the Financial Planning Segments of the Financial Services Industry.”
  • 24 educational institutions along with the College for Financial Planning have IBCFP-registered CFP programs.
  • Soviet Union dissolves
  • First McDonalds in Moscow opens
  • College for Financial Planning has 25,000 enrolled students and close to 40,000 alumni
  • National Center for Supercomputing Applications at the University of Illinois introduces Mosaic, first true browser for the World Wide Web
  • ICFP celebrates its 20th anniversary with a focus on financial literacy, hosting the Personal Economic Summit in Washington, D.C. ICFP adopts the IBCFP’s Code of Ethics and Professional Responsibility, agreeing to follow all future ethics rules established by the IBCFP. ICFP opens membership to international CFP professionals
  • Netscape and Yahoo! are in business
  • MLB goes on strike
  • Worth includes CFP certificants in its “Best 200 Financial Advisers in America.”
  • Federal 55-mph speed limit is repealed
  • Worth includes CFP certificants in its “Best 200 Financial Advisers in America.”
  • CFP Board’s CFP certification program is accredited by the National Commission for Certifying Agencies.
  • DJIA tops 6,000 marking a 100% gain in just 4 years
  • Worth’s “Best 200 Financial Advisers in America” list includes 173 CFP certificants.
  • DJIA tops 9,000
  • Russian debt default sets off global market plunge
  • U.S. District Court rules that the CFP marks are “distinctive and famous.”
  • Portable MP3 player appears
  • Y2K concerns begin to form
  • There are 52,723 CFP certificants worldwide
  • America Online buys Time Warner for $165 billion

  • Financial Planning Association is launched, with more than 30,000 members and 100 chapters.
  • First PhD program in financial planning is offered, at Texas Tech University.
  • Enron scandal breaks
  • Nasdaq closes at 1,185 marking a $4.4 trillion loss in value from peak
  • U.S. Patent and Trademark Office approves registration of CFP as a certification mark.
  • CFP certificants number 73,618 worldwide
  • U.S. invades Iraq
  • Harley-Davidson marks 100th birthday
  • Lance Armstrong wins 5th Tour de France
  • CFP Board implements Rule 401, requiring CFP certificants to disclose conflicts of interest and compensation structure to clients
  • Pluto loses its status as a planet
  • General Motors reports $920 million profit in fourth quarter 2006
  • The Journal of Financial Planning celebrates 25 years of publication.
  • Federal Reserve pumps $72 billion into U.S. financial system in 2 days to steady volatile markets after losses in the American mortgage market
  • General Motors reports $722 million fourth-quarter loss
  • A bachelor’s degree is required for CFP certification
  • Gas prices touch $4.14 in July for regular unleaded
  • Lehman Brothers, AIG, Washington Mutual all collapse leading to the GFC
  • October 9th, most active day in NYSE history
  • DJIA closes below 9,000 for first time in 5 years
  • FPA, NAPFA, and CFP Board form the Financial Planning Coalition to protect and educate the public in the name of financial well-being, and to influence financial services regulation.
  • FPA’s board of directors passes a resolution supporting a Standard of Care for its members, clarifying the role of a fiduciary adviser.
  • MSNBC includes financial planning in its “Top Twenty Jobs of 2008.”
  • By year-end, number of CFP professionals outside of the United States (59,676) surpasses for the first time the number of U.S. certificants (58,830), for a total of 118,506 CFP certificants in 23 countries.


The profession of financial planning has come a long way throughout the years. Integrations with technology, advancement in investment options, lower overall costs for market access, improved regulation, a higher degree of services offered to clients and more focused / structured training for young professionals have helped push the profession in the right direction. We are confident that in the years to come as America experiences the greatest wealth transfer in her history, financial planning will be at the forefront of America’s vital professions.




4 The New York Times, Is Wall Street Ready for Mayday 2?, Leslie Wayne – April 28,1985

5 The History of Financial Planning: The Transformation of Financial Services By E. Denby Brandon, JR. and H. Oliver Welch Copyright © 2009 by E. Denby Brandon, Jr. and H. Oliver Welch

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