By Lawrence C. Strauss

Financial planning used to be much simpler. There were fewer investment choices, and many planners used a pencil, paper, and a calculator. Today, though, there are many more types of investments available. The CFP certification includes information about behavioral finance, software helps advisors devise plans, and AI looms as a major change agent.

At the center of the fast-evolving world is Liz Miller, who chairs the CFP Board. A longtime financial professional, Miller founded Summit Place Financial Advisors in 2008. Among the many issues she is focusing on: There aren't enough women in the profession -- something Miller and the board are working to change. "Two-thirds of women are now the primary investment decision maker in their household," so "the demand for women in our profession is really exploding." Women account for less than 25% of CFP professionals, she says. Speaking with Barron's Advisor, Miller discusses ways for next-gen advisors to break into the industry, strategies to lead a practice through its fledgling years, and what career changers bring to the table.

What stops did you make along the way before you became a financial planner? I have been in financial services my whole career. But I joke that I spent the first half of my career in front of a computer. I was a financial analyst on Wall Street, and then I learned to manage portfolios. I was a security analyst, and I managed portfolios for a while at Oppenheimer mutual funds. Then I worked for a small boutique investment management firm. We worked with endowments, institutions, and individual clients. And I really just started looking for ways to think about managing money in a more holistic way and having that human interaction.

That's how I got into financial planning. It was early in the evolution of what today we call holistic advising. No one was really doing that. But we had a few high- net-worth clients at the boutique investment management firm, and they would come to us with the occasional question beyond their portfolios. They would say things like, "You know, my accountant won't tell me, my broker won't tell me, but will you help me? Do you know how to get a family loan for my son to buy a house?" I definitely saw this need, particularly for families, to have more holistic advice across the range of their financial needs.

What's different for planners who are launching their careers now? When I started my firm in 2008, I already had a good number of years in the industry as a portfolio manager. That is very different than our younger CFP professionals today, who often want to start their own firm and who want to have an independent practice where they can help their community or a particular population. There are all different business models that allow younger planners to really think about the best way to serve their community, feel like they're helping people, and yet still set up a business model that can feed them.

Last year the rookie advisor/trainee failure rate was 71%, according to Cerulli Associates. Why? There are two really big potential stumbling blocks for a next-gen planner who launches his or her own business. The first is that they may have all the skills accumulated to be a great financial planner, but they realize that running a business is more than just taking care of clients. And often they find they really don't like that aspect of it, or they feel stretched too thin with the responsibilities of running a business. Even if it's a single person running the business, or maybe a person with an assistant, there are very real regulatory and compliance obligations on an ongoing basis that may not be as much fun to someone as what they expected when they first launched their firm.

The second stumbling block is really evolving. For many years under the traditional financial planning approach, the pay was based on an assets-under-management model. A lot of next-gen advisors are getting into the business because they're passionate and they want to help their clients. Sometimes they want to help a particular community or population, but it was difficult to put food on the table if you were being paid only on assets under management. A lot of potential clients were starting out just like them. That's changed a lot. There have been a number of trailblazers in the next --gen arena. CFP Board is agnostic as to how you get paid, so we are very supportive of our next --gen professionals, no matter what model they build. Those newer models include pay for service or retainers or payment tied to income levels. Those models are letting a lot more next-gen planners start their own business and have some sort of steady income stream early on.

What about planners who love to help people but are uncomfortable developing a new business? This industry has grown so strongly that a next-gen financial professional has a choice of what path they want to take. Some do have this vision that they want their own firm, and they have these choices of different fee models to help them get started. If a next-gen planner is looking for a role to just take care of clients at first, or really just service clients, I would call [them] a servicing financial professional who doesn't have to focus on developing business right from the start. When I'm talking to college students who are thinking about this career, and I hear that concern -- we hear it most often from women who think they're not going to be good at developing business -- I encourage them to start out at a larger firm where what they're going to focus on for the first few years is being a great financial professional. Then they can evolve over time and learn how to develop business.

What are the pros and cons of starting out as a financial planner versus those who get into it from another line of work? I love career changers in our industry. I think particularly teachers, EMT workers, and people from the military make really wonderful CFP professionals, because they're already coming from caring professions -- and that's what financial planning professionals do today. Career changers bring very good life experience to the conversations they have with their clients.

When we're talking about next-gen planners right out of school, they come with a lot of technical expertise, mainly from the CFP financial planning program. These days we also teach the psychology of financial planning to help them start thinking about the emotional conversations and the thoughtful behavioral [discussions] you have with clients. So they bring a lot of fresh technical skills and knowledge when they start their firms, and it may take them a few more years to develop their own style of emotional interacting -- and experiences -- that help clients.

What are a few of the strategic initiatives you are working as CFP board chair? Over the six years that I've been on the board, demographics and technology just keep evolving at an accelerating pace. So we have what we call our five blocks of strategic priorities, including setting strong standards and increasing the awareness of the CFP certification credential. But with that evolution, we're certainly putting more energy into workforce and access, making sure we have enough CFP professionals to provide competent, ethical planning for growing public demand. And then there's access, which entails bringing even more professionals in and helping them to get certified and to be part of that pipeline.

How is AI affecting financial planning? I don't think any of us truly know how AI changes things, but we want to be forward thinking, both about how financial planning may change and how preparing future financial planning professionals might need to change -- and how it all works together. We certainly are confident that the technological evolution going on does not replace humans, but we do expect that it will leverage and scale and change the way financial planning expertise can be delivered.

What other technology is changing financial planning? When I earned my CFP certification in 2008, there really wasn't any financial planning software. The CFP education -- and the exam -- required a pencil, paper, and a calculator. But today, there's very robust software for planning for the different client scenarios. Even more so, those coming through and earning the CFP certification need to know how to look at evolving technology and be able to say, "Well, I put all my data into this software application, but this output can't be right. Let's see what needs to be fixed." So as technology evolves, how we approach financial planning keeps evolving as well.

What is your advice for a next-gen planner starting out today? My best advice to a new next-gen planner who wants to launch their own firm is to really think about what kind of target client do they already know very well and understand. Focusing on that clientele to start is the best way to be successful. A lot of next-gen planners start out almost throwing darts. Ultimately, that does become a mistake. Identifying where they have a passion and where they have particular knowledge to really help people is so important. They'll help that first client, and that person will recommend their friend, and they'll grow the business that way. A financial planner can probably do best by really targeting a specific clientele, sticking to it, and becoming an expert in that area.

Thanks, Liz.

Write to advisor.editors@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 10, 2025 08:00 ET (12:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.