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What is a Financial Planning Degree?
It has been said that the best thing money can buy is financial freedom. That freedom, in essence, is what financial planners sell. They evaluate the financial resources and obligations of individuals, families, and small businesses to help them make smart decisions about spending, saving, and investing.
Coursework for this degree addresses the six vital areas of financial planning:
• Cash Flow Management – understanding income versus expenses today and in the foreseeable future
• Risk Management – managing the risks (sickness, injury) that could derail goals, deplete assets, and threaten income
• Investment Planning – using investment strategies and vehicles suited to individual temperaments and planning objectives
• Tax Planning – understanding tax laws and taking advantage of available tax avoidance strategies
• Retirement Planning – establishing retirement goals and building a plan to achieve them
• Estate Planning – developing an estate plan to maximize the amount of money left to a client’s beneficiaries; ensuring proper and effective management of a client’s finances if they become incapable of managing their affairs while alive; liquidation of a privately owned business
Simply put, a financial planning degree gets you ready to build financial plans – plans with stated goals, plans formed through careful analysis, plans that have action steps to get people from they are to where they want to go, and plans that have a system in place to monitor, review, and make necessary adjustments along that road to financial freedom.
At many schools, degrees in financial planning are offered as a specialization with the finance major.
Associate Degree in Financial Planning – Two Year Duration
The financial planning associate curriculum combines courses in the humanities, the social sciences, and English composition with foundational courses in finance and business and financial planning. Students who earn this degree typically go on to further study. They may also qualify for some entry-level, assistant roles in the industry.
For a sense of the content of the associate level curriculum, please refer to the course descriptions in the bachelor’s program section, below, understanding that, while associate subject matter is similar, classes are introductory and therefore not as in-depth.
Bachelor’s Degree in Financial Planning – Four Year Duration
Bachelor’s programs in financial planning are comprehensive and rigorous. Many of them are registered with the Certified Financial Planner (CFP) Board of Standards, meaning that program graduates are eligible to sit for the CFP exam, without undergoing the application process required of non-registered program students. Individuals who pass this exam are qualified to practice independently as a financial planner. At the bachelor’s level, advanced coursework spans corporate finance, economics, investment planning, and portfolio management. Programs commonly include site visits and a finance / financial planning field experience or internship.
Below is an overview of a standard bachelor’s program in financial planning. The titles of the core financial planning courses are shown in bold.
• Microeconomics – the basics of supply and demand; the market economy; elasticity; the foundation of consumer demand; the theory of the business firm and costs of production; the market structures of perfect competition, monopoly, oligopoly, and monopolistic competition; theories of labor unions and wages; antitrust policy; and the microeconomic view of international business
• Macroeconomics – the schools of economic thought and international economics; the methodology, concepts, and terminology of macroeconomics, including principles, theories, and tools; banking, money, the Federal Reserve System, and monetary theory; macroeconomic problems such as inflation, unemployment, economic growth, and globalization
• Introduction to Statistics – collecting, analyzing, presenting, and interpreting data; descriptive and inferential statistical methods applied to problem solving and decision making; analysis of real-world data sets using statistical software
• Accounting Foundations – introduction to accounting principles emphasizing the operation of a business as a sole proprietorship; the complete accounting cycle for merchandising and service entities; partnership accounting; the application of computer technology to accounting processes
• Microcomputer Applications: Spreadsheets – creating and manipulating spreadsheets with Microsoft Excel to solve business applications; advanced features including data validation, linked workbooks, pivot tables, lookup functions, solver, and scenario manager
• Professional Ethics – social and professional situations, especially in the fields of business, law, and technology; ethical theory and examination of ethical dilemmas
• The Business Systems Cycle – the five phases of the systems development life cycle: system planning, systems analysis, system design, system implementation, and system operation and support; how many typical business needs are incorporated into a business system, including invoicing, accounts receivable, order entry, inventory, accounts payable, payroll, manufacturing, and sales and marketing
• Corporate Finance – the fundamental principles of corporate finance: company analysis, the term structure of interest rates, the relationship between risk and return, time value of money principles, security analysis, cost of capital and capital structure, and capital budgeting techniques
• Principles of Project Management – project definition, resource planning, project scheduling, and project control; planning and scheduling with limited resources; using project management software
• Business Law Foundations – the fundamental principles of business law; the legal system, dispute resolution, government regulation torts, and crimes affecting business, contracts, sales, and agency
• Management Foundations – the four universal functions of management: planning, organizing, leading, and controlling
• Marketing Foundations – learning and application of the strategies, tactics, and terminology used by market-oriented businesses; market segmentation, product, pricing, marketing communication, research, and marketing channel strategies
• Federal Taxation I – an explanation of the federal tax structure, application of tax principles as they pertain to individuals; introduction to taxation for businesses, federal tax laws and regulations, taxation theory, and tax research and planning techniques
• Investment Planning – an introduction to investment fundamentals: risk and return, investment information sources, market indexes, analysis of the economy, industry and companies, and investments in stocks, bonds, and mutual funds; an introduction to international investing and active versus passive investment strategies
• Money and Banking: Treasury Management Focus – a study of the US banking system and how the government and the Federal Reserve Board influence bank operations and US monetary policy
• Financial Analysis for Business Managers – the practical interpretation of financial statements
• International Finance – the flow of funds, exchange rate determination and forecasting, management of economics, and the financing of international trade; the international monetary system, foreign exchange trading, and the problems that occur in international markets
• Portfolio Management – advanced study of portfolio construction, management, and protection; topics include setting portfolio objectives, formulating an investment strategy, portfolio monitoring and revision, and evaluating portfolio performance
• Financial Plan Development – students conduct case studies and participate in field experiences to apply their knowledge of financial planning topics
• Federal Taxation II – continued study of federal taxation, focusing on business taxation for partnerships, corporations, and limited liability companies; payroll taxes, estate and gift taxes
• Behavioral Finance – the effect of psychology on the behavior of people in the financial field, such as portfolio managers, financial planners, investors, brokers, etc.; the forces – such as greed, hope, and fear – that determine risk-taking behavior in the field of investing; the effect of human reactions on important aspects of market behavior and price movements; the effect of investors’ biased reactions to public announcements about securities; the effect of perceptions of risk and return on portfolio management and security selection
• Financial Planning and Insurance – financial planning and wealth-creation techniques for individuals; evaluating and establishing financial goals of individuals; tax considerations, fringe benefits, investment techniques, insurance, and retirement and estate planning; risk management and various types of insurance including life, health, disability, long-term care, property, and liability; regulatory, ethical, and legal issues
• Retirement Plan / Employee Benefits – the principles of retirement planning: defined contribution plans and defined benefit plans for the private sector, retirement plans for non-profit and government entities; retirement plan design
• Estate Planning – the estate planning process and its goals, the methods of estate transfer at death as well as during life; taxi issues that arise with estate planning
Master’s Degree in Financial Planning – One to Two Year Duration
Master’s programs in financial planning are rare. Graduate students are more likely to pursue a master’s in finance. The financial planning master’s programs that do exist tend to be aimed at practising financial planners who wish to enhance their skills, often for the purpose of pursuing the Certified Financial Planner (CFP) credential. As noted above, the best bachelor’s programs are also designed to prepare students to sit for the CFP exam. The master’s option, however, offers a shorter route to CFP eligibility for candidates with experience in the field.
Financial planning master’s programs may also offer targeted training to obtain advanced designations, including the:
• Chartered Retirement Planning Counselor (CRPC)
• Chartered Retirement Plans Specialist (CRPS)
• Accredited Wealth Management Advisor (AWMA)
• Accredited Portfolio Management Advisor (APMA)
• Chartered Sustainable, Responsible, and Impact Investing Counselor (CSRIC)
Degrees Similar to Financial Planning
This degree program provides students with in-depth training in mathematics, statistics, and probability. It teaches the use of models in analyzing and solving financial problems and includes coursework in economics, finance, accounting, and computer science.
Economics asks wide questions about world economies, how governments should respond to financial crises, how stock prices and exchange rates are set, and how to help people living in poverty. The degree field is focused on how to use the concepts and theories of economics to study and solve real-world problems.
Entrepreneurship students learn how to build, promote, and manage their own or others’ businesses. Common classes are entrepreneurial finance, foundations of entrepreneurship, investor relations and funding, new product design and development, and business plans.
In very simple terms, the finance field is about helping businesses, organizations, and individuals make money. Degree programs in finance, therefore, teach students about investing, financial and estate planning, risk management, interest rates, insurance, and taxes. Their objective is to produce graduates who are ready to help both commercial and retail clients reach their short- and long- term financial goals.
Degree programs in insurance prepare students to work as insurance underwriters, the professionals who issue insurance policies. Students of the field learn how to consider individual circumstances and decide which policies to offer to potential clients.
Skills You'll Learn
• Analytical skills – analyzing economic trends, regulatory changes, risk, and client risk tolerance
• Comfort with using IT software – using financial planning systems and software is an integral part of the job
• Communication skills – strong oral and written communication skills and the ability to explain complex ideas and industry jargon in simple terms are key
• Entrepreneurship – this skill is vital for financial planners opening their own business
• Interpersonal skills – relationship building and trust building
• Market awareness and ongoing learning – financial planners must stay on top of developments and trends in order to properly advise their clients
• Math skills – financial planning requires understanding numbers, gains, and losses
• Organization and attention to detail – these skills are vital to avoiding potentially costly mistakes
• Passion – the best financial planners are passionate about helping others grow their wealth
• Sales / persuasion skills – financial planners are essentially sellers of both their skills and investments
• Stress management – managing clients’ financial portfolios involves helping them make life impacting decisions
• Using models, charts, and graphs to present findings
What Can You Do with a Financial Planning Degree?
Financial planning graduates find jobs at banks, credit unions, investment firms, insurance companies, and in independent practice. According to the US Bureau of Labor Statistics, these are the largest sectors (in descending order) in which financial advisors and planners work:
• Securities, commodity contracts, and other financial investments and related activities
• Self-employment / private practice
• Credit intermediation and related activities
• Insurance carriers and related activities
• Management of companies and enterprises
In their roles, financial planners may choose to focus on one or more of these areas of financial planning:
• Cash flow management
• Risk management
• Investment planning
• Tax planning strategies
• Retirement planning
• Estate planning
Common, related titles in the industry include:
• Budget Analyst
• College / University Professor
• Commodities Sales Agent
• Credit Counselor
• Employee Benefits Manager
• Financial Counselor
• Financial Planner
• Financial Services Sales Agent
• Insurance Sales Agent
• Loan Officer
• Personal Banker
• Personal Financial Advisor / Planner
• Securities Trader
• Wealth Manager
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