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A Well-Rounded Education is the Key to Financial Planning

Jae young Yang - CFP Koreaby Jaeyoung Yang, CFP

The work of financial planning requires a financial planner to have professional knowledge in varied fields. It is, of course, not an easy matter for one individual to acquire all of the professional knowledge necessary for financial planning. In addition, financial planning is not so much a theoretical science but a practical one, with shorter history than such sciences as economics, business management, and psychology.

Therefore, it has less research findings and theories.

Education and Experience are both Needed

Some financial planners say that the financial planning taught in universities is too theoretical and not useful for work practice. This is a narrow-minded perspective, however. Financial planning cannot be done with work experience only. If it could be done with just on-the-job experience, a financial planner could not be considered a professional. Financial planning services require knowledge in many related sciences like economics, business management, investment, insurance, welfare, retirement, psychology, and so on. Therefore, in order to be a professional financial planner, planners should never stop studying those related subjects and cultivating their ability to interconnect the varied sciences.

Such education can be received in regular college courses or shortened curricula, or in other educational institution programs. Financial planners, at work, tend to prefer a shortened course to a regular one that would take up a lot of their time. The short-term courses carry such an advantage because having an expertise in a particular field can directly be applied to their on-the-job practice. However, even if knowledge in a particular field, such as inheritance, investment and insurance, is important, they still need to have a systematic and specific knowledge basis in general fields. Thus, enrolling in a university or graduate school to study these topics systematically would be a good step. There, they would be able to study the issues that could arise from work practice, and apply what they have learned to their work practice. Servicing financial planning on these bases would further the relationship and build trust faster with clients.

A Strong Financial Network is the Key to Success

As financial planning helps plan a life, the sciences that have relevance to financial planning are vast and diverse. Thus, to the extent that it is very difficult for an individual to acquire the entire scope of the knowledge related to financial planning, it is very important to have networks established with experts in a wide range of fields. It is particularly important to have a network that includes professors, researchers, and students in universities. This is because they can be a continual source of research studies, findings, and theories.

If experts in non-financial fields add their own professional knowledge to financial planning, it can greatly enhance the synergy.

Knowledge Areas that Support Financial Planners

As mentioned above, financial planning work has relevance with varied subjects. Thus, professionals in different fields can have strength in their own areas. Even though many financial planners are from financial institutions, there are a lot of important areas other than, say, investment and insurance, which are the main professional fields of financial professionals. This is because financial planning is the planning of one’s life. Those who have a strength in a science such as tax (which is a sensitive subject to many people), behavioral finance (which is related to investment), psychology (that has relevance to the post-retirement life), and humanities (that are concerned with human emotions), can have an added advantage in their financial planning practice. The same goes for planners who have a strength in economics, mathematics, statistics, computer science, and so on. But there is one important proviso these people need to keep in mind. The proviso being that without a general understanding of financial planning concepts, their expertise in those other subjects is useless.

Accordingly, a financial planner should enhance his or her competence through systematic study and research in a lot of different subjects and sciences, in order to be able to apply them to their financial planning work. Then, he or she could provide clients with a better financial planning service, and will, in return, receive greater trust from them.

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