A new master’s degree program in financial planning focuses on the psychological side of wealth management, just as the CFP Board introduces that component to its Certified Financial Planner exam.
The recently launched MS in Financial Planning at NYU’s School of Professional Studies will welcome its first cohort of students this fall. The program is unique in offering two concentration choices: Behavioral Finance and Financial Analytics.
The behavioral finance option comes as the CFP Board, which oversees the gold standard CFP credential, began including the ‘Psychology of Financial Planning’ in its planner exam this year.
Colin Slabach, the faculty lead for the one-year program, said that the two tracks are what make the program different from other financial planning degrees.
“I haven’t really seen that as much in the marketplace,” Slabach said. “Individuals will be able to sit and qualify for the CFP, but really our major differentiator is that behavioral finance track and that financial analytics track.”
The industry has seen a growing emphasis on the role of psychology in financial planning in recent years, bringing together behavioral finance with traditional investment advice to find new ways to strengthen advisors’ relationships with their clients. The CFP Board’s ‘Psychology of Financial Planning’ covers topics such as client attitudes, values, and biases and principles of counseling and communication.
John Loper, the CFP Board’s Managing Director of Professional Practice, said that the NYU degree “highlights the importance of our new domain, psychology of financial planning.”
The degree is targeted at career changers, people just starting out and those who don’t yet have substantial experience in the field. With nearly 4 in 10 advisors expected to retire in the next 10 years, the NYU program wants to bring in younger students to be able to fill that impending gap in the industry.
“We definitely want that younger cohort who are going to be able to, within those next 10 years, step up and become owners of these practices and really develop their skills, but we want to set them up to work with these groups of individuals,” Slabach said.
The program received CFP Board Registration on July 18.
“We really think that the CFP is trending towards becoming the standard in financial planning, so kind of similar to what a CPA would need to be an accountant, or a lawyer needs to be able to pass the bar,” Slabach said.
The CFP title does perennial battle with advisors who call themselves financial planners but lack the CFP credential. The Financial Planning Association, the leading membership organization for CFPs, said on July 21 that it would seek legal recognition for planners through title protection.
The overarching goal of NYU’s new financial planning is to prepare people to enter the market as “comprehensive financial advisors,” Slabach said.
“We’re very focused on providing them with a positive learning outcome and preparing them for the marketplace,” he said. “Just giving them a safe place where they can focus on developing their skills, but then also build these relationships for when they do get out into the workforce.”