Knowledge Distribution Disruption
Faster. Stronger. Bigger. Better… today’s society moves at the speed of light. Yet, progress is halted when a lack of know-how, skill, or distrust feeds into discomfort, disconnecting consumers from the financial tools, products, and services necessary to achieve financial security. Meanwhile, regulation and licensing requirements often convert financial advisors into gatekeepers, sometimes causing consumers uncertainty or concern. Through many years, significant numbers of consumers started to distrust the industry.
Solomon S. Huebner recognized this phenomenon early on. He saw how state regulations dating back to the 1800s, along with the varied intricacies and lack of knowledge in many areas of personal finance, required a deeper understanding of how products could help protect families and their legacies while also reducing some level of risk. Huebner had the forethought to found The American College of Financial Services a full two years before that famed Black Monday rattled investors and plunged the markets toward The Great Depression, caused in part due to high levels of speculation in the financial markets.
Now, nearly a century after he established The College to educate financial professionals and deepen consumer trust in financial services, the field of education itself is in the middle of its own transformation known as modularization.
Modularization is when “instructional content and paths are designed and developed in such a way as to be standalone components.”
“We focus on the smallest possible learning object or learning moment,” said Grady Batchelor, DMgt, vice president of the Institute for Learning Innovation, as he explains how modularization presents the opportunity to unbundle existing courses and programs. This function leverages The College's expertise and financial knowledge to address specific moments that matter for both advisors and consumers in easily accessible, focused learning units at the moment of need.
According to Batchelor, modularization ultimately benefits the student, whether a consumer or an advisor. “If people do not possess basic financial knowledge and skills, they're not going to seek out advisors. They won’t know that they need an advisor or that different products and services are out there.” Whereas for advisors, “the challenges are having the right financial knowledge for the moments that matter when money is in motion.” Modularized delivery platforms can be ideal for an advisor who has something specific to learn to serve a client’s need or goal, he stated.
“A lack of basic financial knowledge often leads to poor financial decision-making and can impact others in their family for generations,” Batchelor cautioned.
Despite that, there is yet another element in the mix that factors in so that clients can feel confident in their financial skills and decisions. That element is trust.
According to Domarina Oshana, PhD, director of Research and Operations at the American College Cary M. Maguire Center for Ethics in Financial Services, “Trust is the key challenge… particularly in terms of evaluating the trustworthiness of the source of information.” Consumers often wonder, “Is the source credible?” Oshana explained how examining things like integrity, good intent, and credentials helps consumers evaluate overall competency for information, knowledge, and recommendations.
For educators, Oshana said that includes having a good track record of delivering course content for students that's relevant and has value for clients. Whereas for financial professionals, “There's just so much information out there and so many different people, conduits, and institutions that can offer content… it really is about assessing what's right for the end user — what's credible, what's going to further their careers, and what's going to advance them in ways that will help them build credibility.”
And for those in leadership, “It's about developing leadership skills around the nature of trust and how to build it with stakeholders, because it's a ripple effect,” according to Oshana.
With the student as a stakeholder, “Trust building is about removing those practical barriers.” Technology often serves as a significant barrier to knowledge distribution. Oshana asked, “How easy is it for professional students to access and acquire the knowledge they need to develop careers? What actions can institutions take to ensure today's student experience results in tomorrow's higher student lifetime value?”
“The College is well-positioned when it comes to overcoming knowledge distribution challenges compared to other institutions because of trust,” explained Oshana.
As shown in the Gallup polls and the Edelman Trust Barometer, trust in institutions has been declining, Oshana stated. “Yet through our own research on trust in financial services, we're seeing a new story emerge…. Our Center for Ethics in Financial Services research shows that trust in the financial services industry is moderate compared to other service sectors, such as telecommunications or healthcare. It’s also exciting to see studies like the CFA Institute’s investor trust study showing trust in financial services trending at an all-time high.”
“Based on this and our own research, we have reason to be optimistic about trust and financial services,” Oshana said.
While trust is essential in establishing credibility, shifts in content delivery itself are changing how The College can personalize the student’s experience. Batchelor described how intentionally designed, personalized, customized, gamified, and modularized content is optimized for cataloging, usability, re-usability, maintenance, and long-term shelf life, or what is referred to as evergreen content. He said this is “to appeal and engage a wide number of specific audiences that have the potential to have a generational impact on society” as well as a great deal of impact on their entire family.
“We're modularizing all of our financial education content to make it easier and faster to deliver applied financial knowledge in multiple delivery formats to meet the ever-changing, specific needs of our partners and consumers during the moments that matter most in their life,” stated Batchelor.
For students, Batchelor explained that modularization is readily available “whether they need on-demand training for themselves or they need on-demand training for their clients to help solve problems so that a financial professional can work more effectively with their clients.” This is the ability “to have a module on-demand that covers a specific area that doesn't require the student to go take an entire course,” continued Batchelor. He noted how this could be an advantage that deepens a particular skill that is needed in the moment. “Maybe they don't have time or maybe they don't want to, but it allows them to get education and learning on demand that specifically addresses that thing that they want to address.”
Advances in how education is delivered have grown more prominent. “By modularizing content, it allows The College to address applied financial knowledge that's more focused — specific to the needs of an advisor, the needs of a consumer, and the specific needs of the organizations that we're supporting.” Batchelor discussed another benefit of these changes. “Often, advisors and consumers need the same information but from different perspectives. With modularization, we can focus on both a financial advisor’s perspective and a consumer's perspective.”
“Modules also allow us to access that specific bit of knowledge within a course and bring it to life in a smaller, easier-to-use, more bite-sized piece of information that can be consumed quickly or on demand,” said Batchelor.
“In particular, a lot of financial advisors are left having to provide basic financial literacy to their clients,” he said, “especially older clients that don't have that in their background.” Technological advances in content delivery allow The College to fill that void by repackaging those smaller bites and its educational products to reach expanded audiences and consumer learners. “Modularization offers this opportunity to be able to extract those kinds of information, see it as a conversation with a consumer, and then speak directly to the consumer,” stated Batchelor. “Interestingly enough, in a lot of cases, those are the moments that matter for advisors as well.”
“To meet academic standards, everything, no matter how small of a unit that we deliver, must have a specific objective or objectives that are going to be met by that particular learning object,” Batchelor continued, “and at a minimum, it must have assessment of learning associated with it.”
“Modularizing allows us to take existing content to more rapidly and effectively create new, innovative programs that specifically address our organizational client's needs, our practitioner's needs, and our consumer needs,” Batchelor confirmed. “Everything we offer, it can be delivered to the advisor, but on the flip side, it also can be offered in terms of a conversation with the consumer. And whether that is to help the advisor or to help the consumer, that same conversation is ongoing between the two.”
“And there's many moments that matter in people's lives,” Batchelor stated, “and as a result, modularization allows us to be able to address those quickly.”
Batchelor acknowledged we have a much more sophisticated consumer audience today. Yet, even when a consumer is not as savvy, they are still better at researching and looking for things to solve their needs. And even populations who may be afraid of banking and financial services industries, they still do their research. He sees this as an opportunity for The College to take its financial expertise and unbundle it to provide modules for someone who does not need to know as much as an advisor. They do, however, need to know and understand how something works in the financial world.
In The College’s consumer program, Know Yourself, Grow Your WealthSM, Batchelor discussed how students revealed spending habits for the path forward in life, that each path has very different outcomes for the individual who learned to save, with either a piggy bank or a bank account, or the individual who went and immediately spent. He concluded, “Those are simple, but those behaviors tend to really move forward, especially if they're reinforced over time…. Money is spent fast or money is saved.”
Reaching consumers is important because it has a direct impact on legacy. “When one person in a family changes their behavior or changes what they share with their family, that can change how they approach money and how they invest money,” states Batchelor. “Literally, the legacy becomes: I can change generations from the changes that I make. Those same changes that individuals in our consumer programs make, they actually have an impact long term for generations to come. That generational wealth is how families really, truly are able to make a difference moving forward.”
“And because there are many moments that matter in people's lives, modularization allows us to react and address that quickly,” said Batchelor.
In education, there is a long-held belief that you can have the greatest impact if you can meet the student where they are — provided that a foundation of credibility and trust allows that knowledge to reach consumer and professional students. Even as a disruption to how education is delivered, modularization meets a student’s immediate need by repackaging The College’s knowledge, thought leadership, and expertise for a larger population.
Trust: Four Key Practical Challenges for Educators
Establishing credibility builds trust, and trust itself separates superior education providers and thought leaders from the rest. Director of Research and Operations at the American College Center for Ethics in Financial Services Domarina Oshana, PhD discusses four challenges to gain trust in education for consumers.
- Awareness and Access
- Do consumers know what knowledge is available and where to go?
- Is “how to access” communicated in ways that are sufficient for consumers to connect with the content and the expertise?
- Experience
- Do consumers have a frame of reference and the competence needed to process and apply financial knowledge?
- Relationships
- Do consumers have a network of trusted connections with whom they can communicate about financial knowledge?
- Time
- In evaluating and assessing the sheer volume of available information, do consumers have the minutes and the hours necessary to process and apply financial knowledge?
Access interviews featured here and more in our 2022 President’s Report.
Batchelor’s Insights:
Oshana’s Insights:
RIA Team Specialization and Education Plan
How to integrate specialization with individual roles and responsibilities
Making sure that your team has both the financial planning skills and business acumen they need to deliver specialized services demands an intentional and informed approach to training, upskilling, and lifelong learning.
The right financial education can help prepare team members for their various roles and support them as they move up the ranks. For example, an entry-level paraplanner may be responsible for:
- Client fact-finding and onboarding.
- Maintaining social media accounts.
- Preparing files for client meetings.
- Client servicing.
As such, they need to understand target marketing principles, ethical decision-making, current financial products, and major financial planning areas. A designation such as The American College of Financial Services Financial Services Certified Professional® (FSCP®) can help.
As the paraplanner moves into an associate advisor role, however, their responsibilities evolve to include:
- Inputting data into financial planning technology.
- Portfolio asset allocation analysis.
- Preparing files for advisory meetings.
- Conducting investment research and research for quarterly outlooks and summaries.
- More intensive client servicing.
In this new role, they need to understand investment management theory, tools, accounts, and application and portfolio management strategies. A structured program like The American College of Financial Services Wealth Management Certified Professional® (WMCP®) can support them as they develop new skills.
At every level, team members need the right skills and training to succeed in their day-to-day tasks. And The American College of Financial Services is ready to be your lifelong learning partner, helping you and your team build the knowledge and skills you need to succeed.
To learn more about the skills and education needed at every level of your RIA, from paraplanner to managing partner, download our RIA Team Specialization and Education Plan now.
Furthering My Commitment to Philanthropy as a CAP®
For those unfamiliar with the CAP® Program, it provides professionals with the knowledge and skills needed to help others realize their philanthropic goals for themselves, their families, and society. The program delivers a shared body of knowledge in the arts and sciences of philanthropic planning for philanthropists, fundraising coordinators, and financial advisors, increasing their ability to collaborate effectively and realize philanthropic intent.
Philanthropy and giving have been a part of my life for as long as I can remember. When CJ and I were first married, long before we had dollars to give, we were committed to serving others by donating our time. Philanthropy has always been our passion.
When I came to The College, I knew I wanted to advance my knowledge by enrolling in one of The College's specialized programs. Coupling my interest in philanthropy with the excitement I heard from CAP® alums about how the courses had significantly expanded their knowledge and impacted their careers, I enrolled.
While my intention was there, accountability to commit the time was lacking. I kept saying to myself, "I have to start. I have to start." I needed an accountability partner in this pursuit, so I decided to add the completion of the CAP® Program to my 2022 goals and objectives, which I submitted to The College's Board of Trustees. Now I had an accountability partner, which I am a strong proponent of in most purposeful endeavors.
The second course was the most challenging because it focused on charitable tax strategies and implications. When you stop and think about it, there is not one financial product or service that doesn't have some tax implications, yet, the lack of tax knowledge is a known issue in the industry. It wasn't long before I realized, from a personal standpoint, that my philanthropy lacked efficiency and I was disappointed that our financial advisors did not possess this knowledge.
The depth of knowledge I learned from completing the CAP® Program has given me a whole new perspective on what we could have been doing. As a CAP®, I have also grown in my understanding of fundraising and appreciation for philanthropic sacrifices.
When we think of philanthropy, we tend to envision someone writing a million-dollar check, yet we overlook people's daily sacrifices. Today someone donated to their child's school; another purchased groceries to feed a family; and another visited an elderly neighbor to make needed household repairs — all philanthropy. Our philanthropy should not be celebrated for the number but rather for the sacrifice.
It reminds me of a congregation in Kentucky with well over twenty thousand members. Years ago, they had a fundraising campaign with the slogan, "Equal sacrifice, unequal giving." If all I have is $5 and I give $1, and you have $1 million and give $200,000, we have made an equal sacrifice. As a CAP®, my respect for the sacrifices made by everyday people is more profound, as is my admiration for my fellow CAP® alums, those who care deeply about ensuring philanthropic intent is maximized, no matter the sacrifice.
I hope my recent accomplishment inspires you to pursue your next lifelong learning goal. The need for specialized knowledge and skill in financial services is significant, and The College offers many avenues to expand your opportunities. I encourage you to find an accountability partner — maybe your spouse, partner, or a peer — and get to work on your next learning goal this year.
Diversity, Equity & Inclusion Insights
Introducing the 2023 Women Working in Wealth<sup>SM</sup> Award Winners
The Women Working in WealthSM Award was created to showcase and celebrate women who have rolled up their sleeves to advance women in financial services through mentorship, sponsorship, and advocacy. Each award winner documented concrete examples of how she removed obstacles, created allies, and executed novel solutions to gender parity.
The Women Working in WealthSM Awards are presented each year to a group of mission-driven and passionate female professionals who are making a significant impact in financial services. The 2023 group of award recipients includes:
- Natalie Baires, WMCP®, JPMorgan Chase
- Lauren Oschman, CFP®, CDFA®, Vestia Personal Wealth Advisors
- Sahar Pouyanrad, EMBA, CTFA, AEP®, CEP®, ChSNC®, PFP®, JPMorgan Chase Bank
- Raquel Tennant, CFP®, 2050 Wealth Partners
- Andi Madden Wrenn, AFC®, Zeiders
Nominations for next year’s Women Working in WealthSM Awards open in October!