Hannah Moore on How to Become a Professional Financial Planner

0:04This week on the Saturday Personal Finance Edition of Motley Fool Money, choosing financial planning as a career.

0:21I'm Robert Brokamp, but two weeks ago, my guest was certified financial planner practitioner Hannah Moore, who talked about how to find the right financial planner for you. This week, Hannah's back to talk about the benefits, challenges, and logistics of becoming a professional financial planner. Back in the 1990s, I was an elementary school teacher living in an expensive city and not making much money. So I figured that I should learn more about personal finance. And the more I learned, the more I loved it. So I became a financial advisor, which eventually led to my current job at The Motley Fool.

0:51Perhaps you too have caught the personal finance bug and have thought to yourself, maybe I could do this for a living. If so, you'll definitely want to listen to our next guest, who is Hannah Moore, the founder of Amplified Planning, the owner and principal financial planner at Guiding Wealth, and the recipient of many awards, including being named by Barron's as 10 People to Watch in Wealth Management and Wealth Management's Innovator of the Year in 2024. She's also the creator of The Externship, an outstanding summer program for aspiring financial planners and people who want to build their own financial plan.

1:19I was fortunate enough to be able to attend last summer, and registration for this summer's externship is now open. Hannah, welcome back to the show. Yes, thank you so much for having me. So what do you see as the main benefits of being a professional financial planner? This is such a great question. And it's just like, where do you start? Like every day I get to come into the office and I get to talk with clients about their money. And I don't know if your listeners are anything like me, but that is like one of my favorite things to do just in life in general. I remember being in high school.

1:50I would drive around and just listen to the personal finance talk shows on the radio. And I would be like, even as a high schooler, I'd be like, well, here's what I would tell them to do. But that's not my day job. That's what I get to do every single day. And I get to bring a level of expertise to so many different clients. I am very, very impact driven. And every day I get to come into the office and I get to see the direct impact that we are having on our clients' lives. Like it is not an abstract thing. It's like I am in meetings with clients, helping them navigate their financial lives, helping them figure out what are the goals that they want to do?

2:24and how can we make that possible? Or what are the constraints that are in there? It is so incredibly rewarding. I can't imagine any other field. I said this before and somebody's like, well, what about teachers? I'm like, yes, that's fair. But like you get to deal with people's money. But the impact that you can have every single day on somebody's life. I come home from work every day with my cup filled. Like I'm like giving out of the overflow because I love this work so much. I'm a mom of three kids, obviously wife, mom of three kids. And this is such a great career for balancing all of the things.

2:57I took my lunch break and a little bit extra time to go get the Easter eggs for the kids for their things. You know, there's just a lot of things that you can incorporate into your life because of the pace of financial planning and what this looks like. I love the people side. I love the numbers. I love how they blend together. I love how, well, now I love how there's not a black and white answer. That took me some time to get there. But I really love how money is not as simple. Like it really can be this really complex thing. and you can make a really good living in this field. There's lots of studies out there showing kind of what the salaries can be in this space.

3:27So for me, this is like this perfect trifecta of the work you get to do, the work-life balance that you get to have and getting paid well to do it. What do you say about radios? That's actually how I got interested in personal finance myself, driving in my junky car as an elementary school teacher and hearing a talk show about money and thinking, this is actually kind of interesting. I wish someone had taught me this when I was in high school and that started me down this road. So it's just funny you mentioned that too. All right. So you love the profession. Someone who thinks this podcast probably cares about money and they think, well, maybe I should get into it.

4:00Looking five, 10, 15 years down the road is now a good time to get into the profession. I'm solidly in the yes camp. I am very, very bullish on this field right now. Financial planning as a field is growing immensely. So there's been some research that came out in the last year or two. So this Cerule study said that by 2034, we're going to have 100 ,000 advisor shortage. And there's a couple of factors that are playing into that. So one is that we have an aging advisor population. And so a lot of people are like, oh, they're going to have to retire someday. They've been saying that my entire career.

4:31The problem is when you love your job, you don't really want to retire. So there's a little bit of like, you know, what does that look like? It's also kind of telling about this career as well when you don't want to retire from it. But the second piece of it is that more and more Americans are wanting financial planning help. This has become a bigger demand in this space. And so this is a growing field where more and more people just need help in their personal finances. And so we're seeing this as this is one of those expansive fields where we're seeing, you know, AI is coming, right? We can't avoid it.

5:06AI is going to be here. But really at the core, this is about relationships and just the more and more people who are recognizing their need for help in their finances and they're not sure where to go. The studies are crazy. Like there's literally, if you can extrapolate the data, right? It's tens of millions of Americans who want financial advice, are willing to pay for it and don't know where to go. There is a huge macro need for this within our country. Yeah, that's one of the reasons why we've had you on the show here, because I hear from our members and our listeners all the time. I would love to work with a financial advisor, trust, maybe on an hourly basis or maybe assets under management and they can't find somebody.

5:43So there's definitely aid. I've read the studies as well about what percentage of financial advisors are going to be retiring over the next decade. It's anywhere 30 to 40 percent. You're right that a lot of them actually stay in the profession a long time. By the way, I've also heard the same about accountants and tax professionals. Those are people who don't want to stay in the profession because by the time they lose their taxes. So, I mean, that's adjacent. And many people do both, right? They are a certified financial planner as well as an enrolled agent, and they do the taxes in the firm as well.

6:13So it does seem like over the next 5, 10 years, there's going to be a need for this, especially as more of the baby boomers and Gen X start to retire. Well, to dovetail off of that, you know, we run the X-Rex, we do all this training for people wanting to come into the space. The story you said of I went looking for a financial planner, I couldn't find them, or the one I was using, I was like, wait, what are they doing? That is such a familiar story to so many people who are entering this space. Yeah, many people came to The Motley Fool as a do-it-yourselfer after getting burned by a financial professional.

6:45And we know that most of them are good people, but some of them are not. So the industry definitely needs more ethical financial planners. You mentioned AI, so I have to ask the obligatory AI question. So how much do you think the profession will be affected by, you know, people just entering all their information into Claude and getting a financial plan? You know, it's so fascinating. So I think you bring up such a good point. And it's going to be something that's going to be here. So I was talking to somebody recently and they made this observation I think was really telling. They're like, you know, you used to go to a financial planner to get the recommendations.

7:21and now you're going to be going to a financial planner with recommendations and being like, does this actually fit? Does this actually fit my life? Does this fit my family's life? Is this the right advice? Are the numbers right? Like, let's not get too ambitious. I mean, like, we've all seen some things, right? And they're going to be like, can we trust this? It's so fascinating because my friends in the behavioral finance space, they have done some, obviously, doing a lot of research around this. And implementation is one of the biggest issues within financial planning, right? It's easy to give good advice, right?

7:54Spend less than you make. Like, that's simple. It's really simple to say, go invest some money. Like, right? Like, these are really basic concepts. And yet, why aren't they implemented? And a lot of this is going to be this implementation. And so, so much of what I find that we do as financial planners is help with the actual implementation of it. Because it's not enough just to know what to do, right? That's going to be commoditized. And one of my friends in the behavioral finance space, they've done some research around this. And they said that one of the top indicators of implementation is the relationship that the person who's been given the advice has with who's giving them the advice.

8:29This is such a relationship business. And that matters a lot. So are people's relationships with Claude or with AI or whoever, is that strong enough to push and pass into the implementation? I mean, I hope it is, right? Like if I could wave my wand and everybody could have answers to all of their financial planning questions and be in a better spot financially, like, yes, I would do that in a heartbeat because that would mean that everybody was set up for success financially, but we know that's not the reality. And so that's what's fascinating in this AI. So we have this whole implementation piece.

9:03We still have a lot of questions around what can it do and what can't it do and what are its limitations. I'm in a lot of conversations with some of these tech startups that are starting. The biggest question is who holds a liability on it? Who holds a fiduciary responsibility with their clients. And what's fascinating is we're seeing a lot of these companies saying, I don't want to touch that. So there's a lot of questions still around what this looks like. But going back to this basis of, you know, where are we going to be with AI? I think we're going to be seeing that the focus of the financial planner is going to be less on entering the data.

9:36We're seeing a lot of that being systematized. We're seeing a lot of that, you know, work being done on that space. And it's going to be more, can you sit across from the client and engage well with a client. And that's going to be what's going to be differentiating for so many planners. In my ideal world, I don't know if the powers to be would listen to this, but in my ideal world, what this would do is it would able financial planners to work with more clients, to be able to be giving really good financial advice, to be able for us to go down market. There are so many people in middle America who need good financial advice.

10:11Like, can this help give them financial advice? If so, I think that's a huge win. But I'm still bullish on the fact that I think that we're still going to need people to do a lot of this work. Maybe not so much as the number crunching as much. And they're going to have to know it. And that's going to be an interesting kind of challenge. But it really is going to be more people are going to need financial advice. If you're serious about your trading, you know that the platform you use can be just as important as the strategies you execute. That's why I want to tell you about TastyTrade. TastyTrade is a powerhouse platform where you can trade stocks, options, futures, crypto, and more, all in one place.

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11:59Yet you can go to ChatGPT and Claude and all these other places and basically get personalized advice. So where is that going to be in the future? Is it going to change so that we at The Motley Fool can give personal advice? Or is it going to be at some point, whenever you ask, like, here's all my information, can I retire? It just says, no, I'm sorry, I cannot give you that advice. It's fascinating, right? Because we're so highly regulated. And that's what people don't always know about this space. Like if I give advice, like I'm liable for that advice. Like people can come back and sue me. And I don't see anything about the SEC lowering their standards right now.

12:32Like if anything, they're going to be going more in that consumer protection. But my husband and I just bought a new house a couple of months ago. And I remember sitting there and, you know, I'm like late at night, this is my day job and I'm doing this. So like, we know everyone's doing this. Right. And I sat there and I was like, okay, here's my income. Here's kind of, you know, my facts that in my situation, how much house can I afford? And it gave me an answer and had the confidence of AI, as I like to say, around the answer. And then I like, I saw it. And at first I was like, oh, I have, okay, perfect.

13:01It was so interesting watching, like, can I trust this? Like, I'm literally, like, potentially putting my financial life at risk on this AI. Like, and it scared me. And I was like, okay. And I, like, had to shut my laptop. And I was just like, oh, my gosh, this is too much. So then we're selling our house. And so, you know, I go into, you know, ChatGPT and I'm like, how much should I list my house, right? And, like, giving it all the information, have, you know, all of that. And it had the side-by-side, you know how it does that, or the side-by-side comparison, and you tell me which one you like better, it was$150 ,000 difference.

13:33And that was 30 % difference based upon the sale price that we were looking at. And I was like, okay, that's actually kind of terrifying. And again, it was another one who said, shut my laptop. I'm like, I need to go call my realtor. And I think we're going to continue to see some of these pieces because it'll be interesting to see if lawsuits come and how this plays out from that liability standpoint. Yeah, I see the numbers that are wrong. I mean, I still do. I'm old school. I write my own articles. but I'll throw it into AI and just, you know, fact check this and highlight anything that's wrong.

14:03And they'll say, you know, you're wrong about this fact. And I'm like, no, I'm not. I know I'm absolutely sure that I'm right about this. Yeah, well, and that's where it's going to be so fascinating, especially for people coming into this space, because you're going to have to be smart enough to catch that because it's going to be giving you a certain answer. Like there's going to be certainty in its answer and you're going to have to be able to say, no, that's not right. And so like, even like we're training so many of these financial planners coming into the space, we're looking at what are the new skill sets that people are going to have to come in.

14:28It's a fascinating time to get into financial planning. All right. So let's get into that. Let's say someone is intrigued about becoming a financial professional. Where and how should they start doing their research into whether this really is the profession for them? Oh, I love that. So there's going to be a couple of kind of answers. There's going to be just obviously talking with your family and friends. And part of that is just seeing like, is this something that fits you, right? Like, I think that's a big piece that we forget about. Like, is this a good career choice for you? And oftentimes your family and friends can be a great mirror to look at yourself and be like, oh, yeah, we have so many people in the externship who say that.

15:03Be like, yeah, I started talking about this as maybe I want to do this. And all my friends were like, yes, please. Like, this makes so much sense that you would do this. So I think just kind of getting that like, hey, is this right? When we look at kind of the education piece, the days are almost gone. Not all gone, but they're almost gone of where you can just come in, if you will, hang your shingle and just start selling stuff and make a lot of money on it. Right. Those days are hopefully behind us, not entirely, mostly behind us. And, you know, people are going to be expecting a certain level of education.

15:32They're going to be expecting a certain level of skill set or knowledge that you're going to have. And largely, you know, that's going to be in that CFP designation. So if you're curious about this career, that's going to be something that you're going to want to explore. What are those classes? What does that look like? What are those pieces on there? And then, you know, not to self-promote too much here, but the externship is also a really great way to really get your toes in the water. I'm just seeing like, what is this career? What does it look like? You know, we really, when we started this, we're really looking at like, how can we just showcase what financial planning is and what the different options are within this field?

16:07And it's asynchronous. We try to fit it within your life, but really giving you like, this is what a day in the life of a financial planner really does look like. And does this fit you? and helping you see that inside kind of look really can make a big difference. So let's get a little bit into the externship. Yeah. It's so valuable. I just signed up randomly. You know, we don't have any deal together. We'd never met before. I just had heard about it. And I thought, well, of course, this is what the industry needs, because there's no other way to really learn whether this is right for you. But part of it, too, is you get access to all kinds of financial planning software that you get to play with, maybe check out your own situation, but also get an idea of like, all right, if I'm a financial planner, this is the type of software I'm going to be interacting with on a regular basis.

16:54And you bring in all these guests, all kinds of people from all walks of life who've taken their experience and turned it into this interesting, unique, successful financial planning career. We started in 2020. So it was a response to COVID, right? We started seeing students who are losing their internships. So this is, so give me a little bit of the backstory, I think which will help, you know, give some context. We were looking at students who are losing their internships and we're like, how can we help them? That's when we started, we kind of were on this full sprit to get this program across the finish line.

17:25And we thought we were targeting juniors and seniors in college who had some knowledge. We opened up this program, we were open for three weeks and it went viral. Reddit was one of our biggest referral sources, like it was crazy. It was one of the only offerings that was available at the time. Like it was, It's still wild when I think back to it. And what we saw was kind of what you're talking about. There's a huge need for how do you get into this space? Because you think about it traditionally, right? Somebody's listening to this. Okay, so if they're in college, you can kind of go that college path route.

17:53And there is a pretty, it's not as defined as I would like, but there's a pretty clear pathway and firms kind of understand that. But if you're a career changer and you're looking into this field, number one, it's complicated as all get out of where are you going to land? Like I can give you a name of any company, any of the big companies, and there's so many different career paths within that. Are you how is it structured? There's so much that's there. So if you're a career changer, you had to kind of just get lucky and know somebody or know where to land. And then you had to go quit your job and then hope it was successful.

18:26Like there is a lot of risk, right, that that comes into play with that. But what we found in 2020 when we built this program, I mean, it was built with the constraints of COVID. It was built with the constraints of we can't meet in person. Everyone's going to be busy. We're all at home. It was we still have collective trauma around this. It was such a time. But what we found was that this program really gave access to financial planning as a career. And so since then, this program continues to get bigger. And we really view ourselves as a welcome mat into financial planning. So we really view ourselves like if you are interested in this career, it is a great spot to come and just come and see what it looks like.

19:05Because if I had to wager money on this, most of your listeners probably can't just go quit their job for two months to go try out an internship and then go back to their day job if that didn't work. Like, that's just not realistic for most of us in the world. But to give you this perspective of being like, hey, you can do that in the evenings. The majority of our people are working full-time jobs who take this program. You can do it in the evenings, on your commute, on the weekends. You get to see all aspects. Like, I mean, the experts are phenomenal. and it gives you just this view of like, what are the top experts in financial planning?

19:37What does this look like? And like the software, getting to see client meetings, you get to see the whole thing of what this career is. And then one of my favorite parts about this is that if you go through this program, you're gonna know where you wanna land. You're gonna be like, oh, that person really resonated with me. I wanna serve clients like that and do it this way. It really gives you a much stronger framework for pursuing this career. And we always say we throw as many resources as we possibly can at the externs because we want to see them be successful in this field. So what's the runway, right?

20:09So let's say someone wants to explore it. They start doing things like the externship. They might start taking classes to become a certified financial planner, any other classes, anything like that. Are we talking a year, two years, three years, or is it really variable? It really is variable when we're talking about career changers. So career changers are a top demographic, which is fascinating in the externship because people often think, oh, it's going to be students. And we do have a good amount of students, but career changers are, by and large, our biggest group. So a lot of it's going to depend on people's personal situations.

20:39So like we have a number of people who often joke, they're like, I'm waiting to be fired with that severance package. And like, once I get that severance package, then I'm going to be jumping in. So it's kind of a funny thing. We just had somebody in our monthly training. He's like, I just got fired, guys. And like, it was like this whole celebration because everyone knew what he was talking about. And he's like, I'm going in now. So what we find is usually it's going to take, we see one to four years as kind of a runway on this. It's going to depend too on where you're located at, that that can make a big difference.

21:10It's going to be, you know, kind of your personal network. And so we see a lot of folks kind of do the externship and say like, oh, this is for me. Some people put their resume together right away and start sending it out. That obviously, you know, shortens that pathway. Other people are like, I want to get some of these CFP courses under my belt. I want to make sure that this is the right path for me. So really, you know, some people are kind of quietly looking as they're kind of going through this. But we usually see there is, you know, that runway of like one year, really three years, maybe four years on this.