B (3:35)

Funny you say about radio is that that's actually how I got interested in personal finance myself. Driving in my junkie car as an elementary school teacher.

C (3:42)

Yep.

B (3:42)

And hearing a talk show about money and thinking this is actually kind of interesting. I wish someone had taught me this when I was in high school and that started me down this road. So just funny you mentioned that too. All right, so you, you love the profession. Someone who thinks this podcast probably cares about money and they think, well, maybe I should get into it. Looking 5, 10, 15 years down the road, is now a good time to get into the profession?

C (4:04)

I'm solidly in the yes camp. I am very, very bullish on this field right now. Financial planning as a field is growing immensely. So there's been some research that came out in the last year or two. So this cerule study said that by 2034, we're going to have a hundred thousand advisor shortage and There's a couple factors that are playing into that. So one is that we have an aging advisor population. And so a lot of people are being like, oh, they're going to have to retire someday. They've been saying that my entire career. The problem is when you love your job, you don't really want to retire. So. So there's a little bit of like, you know, what does that look like? It's also kind of telling about this career as well, when you don't want to retire from it. But the second piece of it is that more and more Americans are wanting financial planning help. This has become a bigger demand in this space. And so this is a growing field where more and more people just need help in their personal finances. And so we're seeing this as this is one of those expansive fields where we're seeing, you know, AI is coming. Right. We can't avoid it. AI is going to be here. But really, at the core, this is about relationships. And just the more and more people who are recognizing their need for help in their finances and they're not sure where to go. The studies are crazy. Like, there's literally, if you can extrapolate the data, right. It's tens of millions of Americans who want financial advice, are willing to pay for it and don't know where to go. There is a huge macro need for this within our country.

B (5:30)

Yeah, that's one of the reasons why we've had you on the show here, because I hear from our members and our listeners all the time. Like, I would love to work with a financial advisory trust maybe on an hourly basis or maybe assets under management, and they can't find somebody. So there's definitely a need. I've read the studies as well about, you know, what percentage of financial advisors are going to be retiring over the next decade. It's anywhere 30 to 40%. You're right that a lot of them actually stay in the profession a long time. By the way, I've also heard the same about accountants and tax professionals. Those are people who don't want to stay in the profession because by the time they reach their 60s, they're paying taxes. So, I mean, that's adjacent. And many people do both, Right. They are a certified financial planner as well as an enrolled agent, and they do the taxes in the firm as well. So it does seem like over the next five, 10 years, there's going to be a need for this, especially as more of the baby boomers and Gen X start to retire.

C (6:21)

Well, to dovetail off of that you know, we run the extra shift, we do all this training for people wanting to come into the space. The story you said of I went looking for a financial planner, I couldn't find them or the one I was using. I was like, wait, what are they doing? That is such a familiar story to so many people who are entering this space.

B (6:39)

Yeah, many people came to the Motley fool as a do it yourselfer after getting burned by a financial professional. And we know that there are, most of them are good people, but some of them are not. So the industry definitely needs more ethical financial planners. You mentioned AI, so I have to ask the obligatory AI question. So how much do you think the profession will be affected by, you know, people just entering all their information into Claude and getting a financial plan?

C (7:06)

You know, it's so fascinating. So I think you bring up such a good point and it's going to be something that's going to be here. So I was talking to somebody recently and they made this observation I think was really telling. They're like, you know, you used to go to a financial planner to get the recommendations and now you're going to be going to a financial planner with recommendations and being like, does this actually fit, does this actually fit my life? Does this fit my family's life? Is this the right advice? Are the numbers right? Like let's, let's not get too ambitious about. I mean, like there's, we've seen, we've all seen some things, right? And they're going to be like, can we trust this? It's so fascinating because my friends in the behavioral finance space, they have done some, obviously doing a lot of research around this and implementation is one of the biggest issues within financial planning. Right? It's easy to give good advice, right? Spend less than you make. Like that's simple. It's really simple to say, go invest some money. Like, right, like, like these are really basic concepts and yet why aren't they implemented? And a lot of this is going to be this implementation. And so, so much of what I find that we do as financial planners is help with the actual implementation of it. Because it's not enough just to know what to do, right? That's going to be commoditized. And one of my friends in the behavioral finance space, they've done some research around this and they said that the, one of the top indicators of implementation is the relationship that the person who's been given the advice has with who's giving them the advice. This is such a relationship business and that matters A lot. So are people's relationships with Claude or with AI or whoever, is that strong enough to push and pass into the implementation? I mean, I hope it is, right? Like if I could wave my wand and everybody could have answers to all of their financial planning questions and be in a better spot financially, like, yes, I would do that in a heartbeat because that would mean that everybody was set up for success financially. But we know that's not the reality. And, and so it's. That's what's fascinating in this, this AI. So we have this whole implementation piece. We still have a lot of questions around what can it do and what can't it do and what are its limitations? And I'm in a lot of conversations with some of these tech startups that are starting. The biggest question is who holds a liability on it? Who holds, like, who holds a fiduciary responsibility with their clients? And what's fascinating is we're seeing a lot of these companies saying, I don't want to touch that. So there's a lot of questions still around what this looks like. But going back to this basis, where are we going to be with AI? I think we're going to be seeing that the focus of the financial planner is going to be less on entering the data. We're seeing a lot of that being systematized. We're seeing a lot of that, you know, work being done on that space. And it's going to be more. Can you sit across from the client and engage well with the client? And that's going to be what's going to be differentiating for so many planners. In my ideal world, I don't know if the powers to be would listen to this, but in my ideal world, what this would do is it would able financial planners to work with more clients, to be able to be giving really good financial advice, to be able for us to go down market. There are so many people in middle America who need good financial advice. Like, can this help give them financial advice? If so, I think that's a huge win. But I'm still bullish on the fact that I think that we're still going to need people to do a lot of this work. Maybe not so much as the number crunching as much. And they're going to have to know it. And that's going to be an interesting kind of challenge. But it really is going to be more people are going to need financial advice.

A (10:30)

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B (11:41)

The liability question is interesting. We here at the Motley fool, if I want to create a tool on our website, our lawyers will be very careful about saying you can't do anything that even smells like personalized advice. Because the Motley fool website, the free site, is not a registered investment advisor yet. You can go to ChatGPT and Claude and all these other places and basically get personalized advice. So where is that going to be in the future? Is it going to change so that we at the Motley fool can give personal advice? Or is it going to be at some point whenever you ask, like here's all my information, can I retire? It just says no, I'm sorry, I cannot give you that advice.

C (12:16)

It's fascinating, right? Because we're so highly regulated and that's what people don't always know about this space. Like if I give advice, like I'm liable for that advice. Like people can come back and sue me. And I don't see anything about the SEC lowering their standards right now. Like if anything they're going to be going more in that consumer protection. But my husband and I just bought a new house a couple of months ago and I remember sitting there and you know, I'm like late at night, guys, this is my day job and I'm doing this. So like we know everyone's doing this, right? And I sat there and I was like, okay, here's my income. Here's kind of, you know, my fact set in my situation. How much house can I afford? And it gave me an answer and had the confidence of AI, as I like to say, around the answer. And then I like, I saw it and at first I was like, oh, I have. Okay, perfect. It was so interesting watching, like, can I trust this? Like, I'm literally like potentially putting my financial life at risk on this AI, like, and it scared me. And I was like, okay, I'm. And I like had to shut my laptop and I was just like, oh my gosh, is this too much? And so then we're selling our house. And so, you know, I go into, you know, chat GPT and I'm like, how much should I list my house? Right? And like giving it all the information, have, you know, all of that. And it had the side by side, you know how it does that over the side by side comparison. And you tell me, tell me which one you like better. It was $150,000 difference.

B (13:33)

Wow.

C (13:33)

And that was 30 difference based upon the sale price that we were looking at. And I was like, okay, that's actually kind of terrifying. And I, again, it was another one who said, shut my laptop. And like, I need to go call my Realtor. And I think we're going to continue to, to see some of these pieces because it'll be interesting to see if lawsuits come and how this plays out from the liability standpoint.

B (13:53)

Yeah, I see the numbers that are wrong. I mean, I still do. I'm old school, I write my own articles. But I'll throw it into AI and just fact check this and highlight anything that's wrong and they'll say, no, you're wrong about this fact. And I'm like, no, I'm not. I know. I'm absolutely sure that I'm right about this.

C (14:08)

Well, and that's where it's going to be so fascinating, especially for people coming into this space, because you're going to have to be smart enough to catch that because it's going to be giving you a certain answer. Like it's going to be certainty in its answer. And you're going to have to be able to say, no, that's not right. And so like even like we're training so many of these financial planners coming into the space we're looking at, what are the new skill sets that people are going to have to come in. It's fascinating. Time to get into financial planning.

B (14:30)

All right, so let's get into that. Let's say someone is intrigued about becoming a financial professional. Where and how should they start doing their research into whether this really is the profession for them?

C (14:40)

Oh, I love that. So there's going to be a couple of kind of answers. There's going to be just obviously talking with your family and friends and part of that is just seeing like, is this something that fits you right? Like, I think that's a big piece that we forget about. Like, is this a good career choice for you? And oftentimes your family and friends can be a great mirror to look at yourself and be like, oh yeah, we have so many people in the externship who say that. Be like, yeah, I started talking about this as maybe I want to do this. And all my friends were like, yes, please. Like this makes so much sense that you would do this. So I think just kind of getting that, like, hey, is this, is this right? When we look at kind of the education piece, the days are almost gone. Not all gone, but they're almost gone of where you can just come in if you will, hang your shingle and just start selling stuff and make a lot of money on it. Right? Those days are hopefully behind us. Not entirely, mostly behind us. And you know, people are going to be expecting a certain level of education, they're going to be expecting a certain level of skillset or knowledge that you're going to have. And largely, you know, that's going to be in that CFP designation. So if you're curious about this career, that's going to be something that you're going to want to explore of what are those classes, what does that look like? What are those pieces on there? And then, you know, not to self promote too much here, but the externship is also a really great way to really get your your toes in the water. I'm just seeing like what does this career? What does it look like? You know, we really, when we started this, we're really looking at like, how can we just showcase what financial planning is and what the different options are with within this field. And it's asynchronous. We try to fit it within your life but really giving you like this is what a day in the life of a financial planner really does look like and does this fit you? And helping you see that inside kind of look really can make a big difference.

B (16:21)

So let's get a little bit into the externship. Yeah, it's so valuable. I just signed up randomly. We don't have any deal together. We never met before. I just had heard about it, and I thought, well, of course this is what the industry needs, because there's no other way to really learn whether this is right for you. But part of it, too, is you get access to all kinds of financial planning software that you get to play with, maybe check out your own situation, but also get an idea of like, all right, if I'm a financial planner, this is the type of software I'm going to be interacting with on a regular basis. And you bring in all these guests, all kinds of people from all walks of life who've taken their experience and turned it into this interesting, unique, successful financial planning career.

C (17:04)

We started it in 2020. So as a response to Covid, right. We started seeing students who are losing their internships. So this is. So give me a little bit of the backstory, I think, which will help, you know, give some context. We are looking at students who are losing their internships, and we're like, how can we help them? That's when we started. We kind of were on this full sprint to get this program across the finish line. And we thought we were targeting juniors and seniors in college who had some knowledge. We opened up this program. We were open for three weeks, and it went viral. Reddit was one of our biggest referral sources. Like, it was crazy. It was one of the only offerings that was available at the time. Like, it was. It's still wild when I think back to it. And what we saw was kind of what you're talking about. There's a huge need for. How do you get into this space? Because you think about it, traditionally, right? Somebody's listening to this. Okay, so if they're in college, you can kind of go that college path route. And there is a pretty. It's not as defined as I would like, but there's a pretty clear pathway, and firms kind of understand that. But if you're a career changer and you're looking into this field, number one, it's complicated as I'll get out of. Where are you going to land? Like, I can give you a name of any company, any of the big companies, and there's so many different career paths within that. Are you. How is it structured? There's so much that's there. So if you're a career changer, you had to kind of just get lucky and know somebody or know where to land, and then you had to go quit your job and Then hope it was successful. Like there is a lot of risk, right? That, that comes into play with that. But what we found in 2020, when we built this program, I mean it was built with the constraints of COVID It was built with the constraints of we can't meet in person, everyone's going to be busy, we're all at home. It was, we still have collective trauma around this. It was such a time. But what we found was that this program really gave access to financial planning as a career. And so since then, this program continues to get bigger and we really view ourselves as a welcome mat into financial planning. So we really view ourselves like, if you are interested in this career, it is a great spot to come and just come and see what it looks like. Because if I had to wager money on this, most of your listeners probably can't just go quit their job for two months to go try out an internship and then go back to, back to their day job if that didn't work. Like, that's just not realistic for most of us in the, in the world. But to give you this perspective of being like, hey, you can do that in the evenings. The majority of our people are working full time jobs who take this program. You can do it in the evenings, on your commute, on the weekends you get to see all aspects. Like, I mean the experts are phenomenal. And it gives you just this view of like, what are the top experts in financial planning? What does this look like? And like the software getting to see client meetings, you get to see the whole thing of what this career is. And then one of my favorite parts about this is that if you go through this program, you're going to know where you want to land. You're going to be like, oh, that person really resonated with me. I want to serve clients like that. And do it this way. It really gives you a much stronger framework for pursuing this career. And we always say we throw as many resources as we possibly can at the externs because we want to see, we want to see them be successful in this field.

B (20:07)

So what's the Runway? Right? So let's say someone wants to explore it, they start doing things like the externship, they might start taking classes to become a certified financial planner. Any other classes, anything like that? Are we talking a year, two years, three years, or is it really variable?

C (20:23)

It really is variable when we're talking about career changers. And so career changers are a top demographic, which is fascinating in the externship because people often think oh, it's going to be students. And we do have a good amount of students, but career changers are, by and large, our biggest group. So a lot of it's going to depend on people's personal situations. So, like, we have a number of people who often joke. They're like. They're like, I'm waiting to be fired with that severance package. And, like, once I get that severance package, then I'm gonna be jumping in. So it's kind of a funny thing. We just had somebody in our monthly training. He's like, I just got fired, guys. And, like, it was like this whole celebration because everyone knew what he was talking about. And he's like, I'm going in now. So what we find is usually it's gonna take. We see one to four years as kind of a Runway on this. It's going to depend, too, on where you're located at that. That can make a big difference. It's going to be, you know, kind of your personal network. And so we see a lot of folks kind of do the externship and say, like, oh, this is for me. Some people put their resume together right away and start sending it out. That obviously, you know, shortens that pathway. Other people are like, I want to get some of these CFP courses under my belt. I want to make sure that this is the right path for me. So really, you know, some people are kind of quietly looking as they're kind of going through this. But we usually see there is, you know, that Runway of, like, one year, really three years, maybe four years on this. But a lot of that is going to be dictated on, like, your situation. Some people are like, I'm going to get through all of that CFP coursework as fast as I can. So it really just depends on the person and situation. But there is. It is not just a, like, flip the switch and then they're gone. Although it can be.

B (21:54)

And I assume that a part of it is also looking at your own personal finances, because you might be taking a big, big pay cut to get an entry level job or do something else. And you have to have the savings to live off for that 1, 2, 3 years before you're back up to where you were.

C (22:09)

Absolutely. It's the number one question we get in the externship is, okay, like, most career changers are like, they realize they're gonna have to take a page cut. Usually not all the time, but usually they're like, okay, and. And what does a Runway look like for that? And so that's gonna be, we talk about where you land is really important. So there are going to be some firms where that is a really defined process for you, where it's going to be just really clear, like, here's going to be the metrics that you need to hit to get that promotion. Those are going to be jobs that career chasers want that they're going to be like, I want to have that trajectory of going up. There's going to be other roles. I was just talking to one guy and he's kind of stuck in a pair planner role where he's just like, I'm here, but I'm doing it. Like, I'm doing the work, but I also, like, don't feel like I have that upward mobility. And he's like, he's quasi retired. I don't think he needs this job for like the money. Right. Like, I think he's done his financial plan well. But what's interesting though on that is Schwab has done some research around where do financial planners find employees. So one's a personal network, two is a university, and then three is other firms. So it is a lot easier for him to go find another job because he has a job in this space already. And so for him, his play is going to be a little bit different where he's likely to probably go and move to a different firm from where he's at. But yet again, that's one of those really strategic questions you gotta be asking if you're going to be coming in as a career changer.

D (23:25)

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B (24:32)

Any final advice for people considering a career as a financial planner?

C (24:35)

I could sing his praises all day long. You know the impact we have in clients lives. And you know the other piece I do want to mention, you know, we're talking about kind of getting a job. Path to entrepreneurship is one of the big reasons people are interested in financial planning right now. About 50% of our folks, that is one of the reasons why they're interested in this. So it's not just about getting the job. It can also be about being an entrepreneur and starting your own business and what that looks like. But I will tell you, it is one of the most rewarding careers that you can possibly be in. I know you just had me on a couple weeks ago, Robert, but one of the stories I told was that this is one that we're dealing with like this week with our clients husband passed away on Saturday and we are guiding this client. We've been guiding them all the way through this process. It is so fulfilling to be able to be there around people's big life events and to be able to do that and to bring a level of expertise where, you know, I know a lot of your listeners might be DIY and they might love this stuff. And I love this stuff too. There is a whole host of people out there who are like, I'm good, like this is a great podcast. But like, please don't make me listen to that podcast. I don't want that information. I need help. And there's so many people out there who are looking for advice and that they want it and they're just looking for the right person. What I also love about the externship is I see how many different backgrounds there are of people and it makes me so excited seeing them get into financial planning and hearing their story and hearing their why. Because all I can see is the client that is like looking for that person and hasn't been able to find it. And so it's just so exciting thinking about all these people coming into financial planning and the people that they're going to be serving and the lives that they're going to be impacting.

B (26:14)

Well, Hannah, thanks so much for joining us.

C (26:16)

Yes, thank you so much for having me.

B (26:18)

And that, my foolish friends, is the show. Thanks for spending part of your weekend with us. And thanks, as always, to Bart Shannon, the engineer for this episode. People on the program may have interest in the investments they talk about. And the Motley fool may have formal recommendations for or against. So don't buy or sell investments based solely on what you hear. All personal finance content follows Motley fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show Notes. I'm Robert Brockamp. Full on, everybody.