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Financial planning for college is a pain point even for wealthy clients and an underserved niche for advisors
<p>Financial planning for college is a pain point even for wealthy clients, and an underserved niche for advisors. </p>

An Untapped Market in College Financial Planning

Niche advisors have an advantage, but it’s getting crowded. The marketplace is jammed with advisors who specialize in wealth management, retirement planning, small business owners, multi-generational wealth, doctors, educators, etc…

But there is one field where you won’t get jostled: The niche for good late-stage college planning. It is just about deserted.

I’m not referring to schemes to sell parents life insurance and annuities to hide their assets. That is a commission-generating strategy that is expensive and often backfires.  

Legitimate late-stage college planning involves advising parents with teenagers (or grandparents with teenage grandchildren) on how they can stretch whatever they have managed to save for college as far as possible. 

Parents with college-bound children are desperate for this kind of advice and yet the financial industry has remained unresponsive. I’d argue that the industry assumes that the families who are most anxious in seeking help as they transition from saving to paying for college are low-income and middle-income households. We all know that those aren’t the kind of families that advisors are seeking. 

I strongly believe, however, that the industry has a wrong view of this market. Having crossed paths with thousands of parents over the past few years, I can tell you that the moms and dads who are most proactive in seeking answers about the cost of college are affluent parents, who dream of the very best schools for their children. Unfortunately, the institutions with the shiniest brand names come wrapped up with much steeper price tags and fewer discounts.

I suspect that these parents are operating under this assumption: If they provide their children with all the advantages (best schools, best neighborhoods, expensive extracurricular activities, test-prep tutoring and tons of enrichment) their kids would emerge as such awesome superstars that colleges would compete against each other to give them full-ride scholarships, or close to it. 

While the most elite colleges and universities consider high-income, high-achieving students desirable, they will give these applicants little, if any, scholarships. There are so many rich, talented students in the applicant pools, schools don’t have to try hard to attract top prospects. In contrast, the vast majority of schools in the country would be eager to give these stellar students fat awards because these institutions don’t enjoy national drawing power. 

You might assume that these affluent families can find their own answers as they navigate the college process, but it’s much tougher than you think. High school counselors are an obvious resource, but they aren’t trained in college planning, which is a national scandal.  In many states, public high school counselors must earn a master's degree but these graduate programs rarely offer even one class in college planning. 

In addition, most private college consultants are shaky on how to advise their clients on the financial side of college and routinely suggest schools without consideration of costs. 

By just knowing the basics about college planning you can be an invaluable resource to clients and prospects. Resources here are so limited you don’t have to wade deep into the weeds to provide much-needed help. 

This is the hopeful message that I delivered during a college-planning presentation that I gave at the Financial Planning Association’s annual conference in September in Boston; it’s an open field for advisors. 

If you can help your affluent clients, who are stressed about college, you can strengthen and cement the relationships you already have.  College conversations can also give you an opening to talk about other financial concerns. Knowing some of the basics about college can also position you to attract new clients. 

An easy way to start is by wading into my columns on

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