What are colleges and universities looking for as they hire the next generation of financial planning faculty? A recent survey set out to answer this question, analyzing the complex factors now shaping the faculty pipeline. Its co-authors include John E. Grable, a certified financial planner and professor at the University of Georgia in Athens; Charles R. Chaffin, director of academic programs and initiatives for the Certified Financial Planner Board of Standards; and Michelle Kruger, a financial planning analyst and doctoral student at the University of Georgia.
Over the last ten years, the number of academic programs for financial planning registered by the CFP board has grown significantly, with most of this growth occurring within business schools. But two obstacles have hampered continued expansion, say Grable, Chaffin, and Kruger.
First, growth in financial planning doctoral programs has not kept pace, leading colleges and universities to compete for a limited supply of doctorally qualified faculty. Currently, only five U.S. doctoral programs are registered with the CFP Board, including Kansas State University, Louisiana State University, Texas Tech University, University of Georgia, and University of Missouri. While other programs that are not registered with the CFP Board encourage their students to take financial planning coursework, the researchers write that “the number of programs is too small to realistically help build teaching and research capacity going forward.”
Second, these graduate programs are largely focusing on the wrong skill sets, the researchers argue. That is, they’re preparing students for tenure-track careers at research-oriented universities, when most financial planning faculty positions are non-tenure-track and focus on teaching, industry outreach, and communication with stakeholders. Because of this discrepancy, many finance departments will find it even more difficult to find the faculty they need. Because of their training, the study finds, many PhDs will be inclined to consider only tenure-track positions, leading to a glut of applications for a few positions at top-tier schools and a dearth for the many open positions at smaller institutions.
To spark more discussion about these challenges and quantify the state of the hiring market for financial planning faculty, Grable, Chaffin, and Kruger conducted an email survey of 342 academic directors and faculty at financial planning programs listed with the CFP Board. Of those responding, slightly more than 50 percent were with programs accredited by AACSB International, and 19 percent were from programs accredited by the Accreditation Council for Business Schools and Programs (ACBSP).
In the survey, respondents were asked whether they would consider hiring a candidate who held a PhD in financial planning from a non-AACSB-accredited school. Sixty-three percent said they would be “somewhat likely” or “very likely” to hire a PhD who had graduated from business schools not accredited by AACSB, while 23 percent said they were “somewhat unlikely” or “very unlikely” to do so. Fourteen percent were undecided on this question.
Next, respondents were asked to indicate the type of coursework and experience they most wanted to see on candidates’ CVs. First, respondents ranked 13 course subjects from most to least important. Not surprisingly, respondents ranked courses in finance and investments at the top of the list, with those in retirement planning coming in second. However, courses such as statistics and economics ranked much lower. In terms of candidates’ experience in the field, only 28 percent reported that work experience was “very important,” with the majority within this group noting that they would prefer a candidate to have four to six years in the field. Sixty-eight percent of respondents rated prior work experience as either “somewhat important” or “neither important nor unimportant”; only 4 percent found work experience “not important.”
Next, respondents were asked to rate the importance of several personal characteristics in their evaluation of candidates for faculty positions on a scale from 1 (not at all important) to 5 (very important). The five characteristics rated of greatest importance included English speaking and writing skills (4.63), teaching experience (4.51), willingness to collaborate (4.42), course evaluation feedback (4.28), and research experience (4.09). Of least importance were the candidates’ publication histories (3.95), research acumen (3.86), experience administering experiential learning programs (3.35) and experience as teaching assistants (3.33).
Evidence of publication, however, was a priority for more than 70 percent of respondents, who noted that they expected new hires to have published one to three peer-reviewed papers. Respondents also indicated that they were more impressed by candidates who had a few publications in high-quality journals, such as the Journal of Financial Planning and the Journal of Professional Finance, than those with more publications in journals with lesser reputations.
Finally, respondents were asked to rank, not rate, ten qualifications possessed by job candidates, from 1 (most important) to 10 (least important). When respondents ranked the qualifications they valued most, teaching experience came out on top, with research experience and work experience coming in second and third, respectively. Written and oral communication skills came in fifth, with academic conference attendance and professional conference attendance coming in the last two spots.
The researchers note that their study supports past studies that also have highlighted that the ability to publish individual research is no longer the gold standard when it comes to hiring faculty in many disciplines. Candidates also must know how to collaborate as part of research teams, teach, interact with industry, act as ambassadors to the university’s larger community, and communicate their own worth to tenure and search committees.
Doctoral programs must adapt to this new market, the researchers emphasize. To prepare new PhDs for today’s academic marketplace, PhD programs in financial planning should give students experiences that develop their teaching, collaboration, communication, and career-building skills, such as team projects, conference presentations, and internships.
The ultimate goal is to nurture and develop PhD programs that help students develop teaching and research skills to become effective faculty. In addition, the CFP Board recently partnered with Columbia University in New York City to develop the CFP Board-Columbia University Teaching Program, another way to enhance teaching and research across all CFP Board Registered Programs. The inaugural program will be held at Columbia University in August.
“Thinking about these issues early in one’s academic career,” they conclude, “can also help someone develop a coherent teaching and research agenda that can be implemented over time while in school and after employment.”
A webinar hosted by co-authors Grable, Chaffin, and Kruger will be held on August 24, 2016, at 1:00pm EDT. Online registration is available here.