In the world of college planning, Pt. 2
By Andy Bowman
Strategic Advisors Group Education Systems
Last time we discussed the fact that the college planners' camp was divided, and the attributes that characterize the different sides of the camp. The distinct sides being: pure college versus financial only planners and financial product planners. It is therefore this college planner's view that this divisiveness is one of the main problems we face. It has often prohibited collaboration between the camps for a greater success rate for the families and the advisors themselves.
As we saw in the previous article, the escalating problems that families face while they try to navigate the incredibly complex world of college admissions and funding has created a fractured and distinctly different set of college planners. We discussed the "pure" college planners who focus solely on the academic side. There are the finance only advisors who try to provide solutions either through cost reduction and increased aid eligibility. And the financial only advisor that looks to creatively utilize life and annuity products as funding strategies. It is fair to say that in the complex world of college planning, the complexity has produced confusion. The search for a "magic bullet" may be elusive.
We all know the growing need for our services, and we all know the growing complexity and enormity of the problems inherent in college planning. Yet, why is it that college planners, who are generally an intelligent group, can't collectively come up with a comprehensive solution that tackles most, if not all, of the issues the college bound family faces and house those solutions under one roof? Is it too much to hope for?
The families want help and should have access to advisors to help them on more than one front. The more comprehensive the services provided by the college advisor, the greater the benefit to the student, the parents and the advisor. One part of the camp alone is not able to provide the types of solutions that are necessary to meet the scope of the college planning issues of today. Expertise in each aspect is important to the overall process that should be made available to all families.
The academic side of the college planning equation is critical to the overall success of any college planning firm. There are distinct advantages to the student and to the family when all the pieces of the positioning/selection/admissions puzzle are identified, personalized and maximized. The process is focused on giving the student (and their parents) the best opportunity. A thorough and streamlined academic system provides the students long-term success because they will maximize their potential for scholarships and grants, go to the right college for the right reasons, graduate on time, and enter a career of their dreams.
The financial side of the college planning equation, as detailed in the previous article, is really composed of two broad camps. The expected family contributions (EFC) reduction planners of the financial side are focused on an area that is absolutely important to increase financial aid eligibility. Of course, not every family will be able to benefit from all the strategies in the EFC reduction world, but every family's situation should be examined for the benefits that they may implement. The best path to success is to educate the family on the EFC and the specific strategies and products to reduce the impact on the family. An estimated EFC is a clear starting point in identifying their situation. This will provide valuable information to the family on proceeding with a course of action. The immediate desire from the client is to have an advisor with proven solutions that are measurable and verifiable.
The most complex areas are the "unknowns" of the financial side of the college planning equation. The usual methods to pay for our children's college educations: out of pocket, grandparents, home equity, retirement raids and loans may not be the most efficient methods. They certainly become less efficient if they are not coordinated with one another and the overall financial plan of the family. This is where we find funding advisors searching to raise, earn, save, borrow, or recapture the costs of college. This side is where the train usually flies off the rails and causes the other camps to just want to stick to their clean little businesses. It is also the side which is on the most benefit accretes to the family. The funding part of the equation is by far the biggest and toughest piece of the college planning puzzle. No matter how well we position our student, no matter how much we reduce the EFC, there still remain out of pocket costs associated with sending a child to college. Ultimately, the family wants to know, "Where is the money?"
The fact is: This part of the equation is where serious money can be made if certain products can be sold, which, by itself, is another topic for another article. Unfortunately, college advisors in this arena often try to force all their clients into a mold in which they can utilize these products even though these products may not work well -- if at all. Just imagine: If there were a complete array of products and strategies from which we could draw solutions and generate revenue. We would be more inclined to provide the financial solutions that are most appropriate to the clients. Then college advisors on this side of the financial side would be less tempted to make the sale and be more inclined to do what is right, thus elevating the entire college planning world. If they could incorporate "pure college planning" into the mix, even better.
You should look to broaden your scope of practice. We should stop segregating services and specializing in one of the three areas alone. It is time to utilize every solution available for the families and use them in concert. The clients benefit immensely by being exposed to more processes that will ultimately take them closer to the very best position academically and financially. We, as advisors, will benefit from a more comprehensive practice that will become a benchmark for college planning in our area. I encourage you to gain a reputation of examining and providing all possible options when creating solutions.
Still wondering which college planning tactics are the best? Well, in the world of college planning, if you don't use them all you'll be doing a disservice to your clients and yourself. Remember: The "magic bullet" is really a three-shot volley.
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