How Any Financial Advisor Can Make Money Using College As A Lead Generation Tool

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The two top questions asked by financial advisors when looking to become a Certified College Funding Specialist (CCFS®) are, “How can I make money using college funding in my business?”

To start, “college” is a subject that focuses on what your prospects love... their kids. And given today’s COVID-19 scare, students are confused as to whether to learn on-campus or at home - or whether or not to attend college at all. Yes, families have questions, plenty of questions, and have no idea where to turn for help.

So how do you take your prospects’ questions about college and turn them into leads and money? It’s simple. If prospects come into your office to discuss college funding, they either don’t have a financial advisor, or they don’t have a good relationship with their advisor. Either way, you have a good chance to turn the prospect into a client if you decide the prospect fits your client profile.

Depending on the type of financial professional you are, college can help you bring in assets under management, sell 529s, annuities, cash value life insurance, originate mortgages loans, and engage new tax clients.

Many use annuities and cash value life insurance as an asset repositioning strategy for financial aid; while others use our tax, cash flow, lending, and cost reduction strategies to help high-income families recoup their entire education cost before they retire.

Financial Advisor Professionals

If you are a CFP, RIA, Series 6, 7, 65, or any other independent financial advisor, college funding offers you the unique advantage to get new clients. You can use college to gradually move the prospect’s entire asset base from their current investment advisor, even in a bull market. How?

Instead of just being an investment manager moving money for an AUM fee, college allows you to become the family’s Chief Financial Officer. And over the next 5-10 years, you can develop a plan to guide them through the college process while managing their retirement goals at the same time.

John is a CFP independent financial advisor. He is licensed in life/annuities. John is also a CCFS and has been in the college funding business for the last five years. He works with an average of 25 college clients each year. John gets a college planning fee from every client he works with, plus he gets a product sale from 80% of those clients. Around 60% of those clients either move their entire asset base with John over time, or he charges the client a $1,200-$2,000 financial planning fee to guide the client through college and retirement. John’s yearly AUM charges are 1.5% under 500,000, 1% under 1,000,000, and .75% over 1,000,000. At the very minimum, John receives a $1,200 fee for college planning for each child, and 80% of these college clients purchase a term life policy to cover the college period. Since John uses a convertible term policy, he also has an opportunity to convert the term insurance into whole life before the ten-year term is up, and the client is too old to get inexpensive insurance. During that time, John also has the opportunity to convert the client’s entire asset base to his retirement platform.

Insurance/Annuity Professional

If you are a life insurance and annuity advisor, the college market is a perfect fit since every client is between 40 to 55 years old. After that, insurance becomes a bit expensive. Below is one of our blog articles that illustrates how one of our members uses life insurance products in their college funding practice: YOU CAN USE COLLEGE FUNDING TO SELL LIFE INSURANCE, HERE'S HOW.

Tax Professionals

If you’re a tax professional, taxes are your client’s biggest problem, especially your business clients. Every time they scratch a check for college the business owner must first pay the IRS 22 to 37 cents on the dollar for the money earned. There are hundreds of tax strategies available (especially in 2018 and after) that any small business client can use to reduce the net cost of their children’s education.

The financial aid formula is weighted much higher for income (47%) than it is assets (5.6%). One tax pro used this knowledge to help a business client restructure his corporation, reduce the amount of income he took as a paycheck and borrowed the balance back from the retained earnings of his company. This technique helped the client get $34,000 in grant money offered by the college, which reduced his son’s $62,000 private college cost.

Some of our members that manage client’s taxes have reported to us that they consistently save their business clients between $10,000 - $20,000 in taxes and cash flow with our college funding strategies.

Mortgage Professionals

If you’re a mortgage planner, you’ve probably seen clients borrow money for college the wrong way. The biggest problem in college today is expensive, PLUS loans (5.30% interest + 4.228% origination fee), and the colleges help promote them. As a mortgage planner, you can show families a better way to borrow by using strategic equity management to restructure their debt and recapture the money they spend on college expenses.

In this example, a mortgage broker is trying to help a client figure out the best way to fund elite private college educations for his two children. This business client makes a good income, but his money was tied up in his business. Consequently, he had decided to borrow the necessary funds ($325,000) over the next ten years using high-cost education (PLUS and PRIVATE) loans. The average monthly payment to cover these education loans would be $3,020. The mortgage broker showed the client how to fund these education costs by refinancing his home. Using a conventional mortgage loan to cover these education costs of $325,000, instead of high-cost PLUS (5.30%) and PRIVATE (6%-8%) loans, the client was able to reduce his average monthly payment (including additional tax savings) to about $1,500. This saved the client $1,520 ($3,020 -$1,500) per month in cash flow.

Regardless of the state of the economy, or the mortgage industry, most families will borrow big for their children’s education. The question is… will they borrow most efficiently. The answer always seems to be NO!

As a result, many of our CCFS/ELA’s that are mortgage brokers sell an additional 3-4 mortgages per month showing families a ‘better way to borrow’ for college. For mortgage brokers, there’s no better time to get into college funding, especially with the interest rate difference between conventional mortgages and education loans.

As you can see, there is significant money to be made using ‘college’ as the driving force of your marketing. Our members make money in college funding by charging planning fees and/or offering their financial products to help fund college costs. However, all use the niche of college funding to start conversations with potential prospects.

Posted by Ron Them

For over 30 years, the nation's leading financial advisors, broker/dealers, and major media outlets have been using his research, funding strategies, training, and insight. Ron is highly regarded as an expert in the college funding field.

He is a former Chief Financial Officer of a Fortune 500 company and currently owns his own financial advisory company specializing in cash flow planning for business owners and executives. He developed the Cash Flow Recovery™ process that uses cash flow management principals to increase asset value and build wealth for business owners.

He is also the originator of several software calculators to help advisors and families make college affordable, including:

* College QuikPlan EFC Calculator
* "Find the Money" College Cash Flow Calculator
* College Debt Reduction Calculator

Ron has been quoted in U.S. News and World Report, Kiplinger's Personal Finance, Smart Money, Financial Advisor Magazine, Small Firm Profit Report, Practical Accountant, LIMRA's Market Facts, Senior Advisors Magazine, HR Magazine,, Employee Benefit News Magazine,, Entrepreneur Magazine, Insurance Selling Magazine,, The Christian Voice, and Columbus CEO Magazine.