The American College is in active discussions with prospective buyers for its 35-acre Bryn Mawr, Pa., campus.
The college intends to use capital generated by a transaction to pursue key objectives, including a revamping of its course curriculum, the hiring of new faculty and online content experts, and the promotion of its insurance and financial services designations through an aggressive marketing campaign.
"We want to focus more on education and less on the burdens of being a landlord," says American College President and CEO Larry Barton. "We don't need to own a campus to do that, especially since less than 1% of our students study on-site. Our mission is to be a citadel where the financial services industry can turn to for teaching and learning."
Efforts to sell the campus have not passed without criticism. Chief among the accusations, which first surfaced in a series of Probe newsletter articles in December and January, is that the college–in particular Barton and the board of trustees–jeopardized the institution's fiscal health through financial mismanagement, thus necessitating the sale.
The decision to explore a sale, made last December, would encompass six buildings located on the campus, including the 50-room Gregg Conference Center that provides lodging for attendees. As part of its agreement with the buyer, the college intends to lease back one or two buildings, including the MDRT Foundation Hall, an office building that houses faculty, editorial and administrative offices.
The college is in discussions with nearly 30 prospective buyers, including educational, health care and for-profit entities, says Barton. He adds the college has no preference as to a buyer; while a university "would be ideal," co-locating with another organization would also yield synergies. He observes, for example, that a health care consortium might help conduct or support gerontology studies of interest to faculty in the college's chartered advisor for senior living (CASL) program.
"Monetizing" the property was the best of three options the college had considered, says Barton. The other two–merging with another college and transitioning from a non-for-profit to for-profit institution–had less appeal.
Barton cannot say what price the college may secure from the sale or the savings resulting from a lease. He notes only that overhead costs on the property exceed "several million dollars" per year.
CB Richard Ellis, an El Segundo, Calif.-based real estate services firm, is representing the college in the marketing effort. The college earlier tapped the management consulting firm McKinsey & Co., New York, to assess and validate objectives that a sale would enable.
Chief among these is renewal of the college's educational designations, including LUTCF, CLU, ChFC, FSS and others. While the college updates these programs annually to reflect current tax laws, Barton says that "it has been years" since the college last revised its curriculum.
A second objective is to hire new staff, including curriculum designers and digital technology experts who will deliver educational content online, plus "several dozen" faculty members who will provide in-classroom instruction at sites nationwide. Barton says that some of the educational programs, in particular the new financial services specialist designation, have been hobbled in recent months owing to a lack of qualified professionals willing to deliver the instruction on a volunteer basis.
The college additionally intends to promote its educational designations through an enhanced marketing campaign. Barton observes that the marketplace's 43,000 chartered financial consultants are almost as numerous as the 48,000 practicing certified financial planners. But because CFP stakeholders have promoted the CFP marks more aggressively, the designation has enjoyed wider industry recognition than ChFC, Barton says.
Critics of ChFC question whether the designation is also at a disadvantage relative to CFP because, in the case of the former, The American College is both the accrediting institution and sole content provider. As regards CFP, market-watchers note, these functions are divided between an independent CFP Board of Standards and, on the content side, the College for Financial Planning and other institutions of higher learning.
Barton rejects any suggestion that ChFC is handicapped because of the college's dual role.
"We are the largest provider of CFP education in the country," he says. "Of the approximately 220 colleges and universities that deliver the curriculum, we have a 29% market share–virtually a third. Also, whereas in years past people would progress in their coursework from LUTCF to CLU and ChFC, now many of our students start with CFP and proceed to our other designations. So, our large CFP market share is, indirectly, helping us boost interest in all our designations, including ChFC."
The competitive threat facing the college, and the industry at large, is the proliferation of educational designations generally, Barton adds. He claims that some of the new designations offer less than rigorous academic standards. He believes the financial services community should organize a summit to address the issue.
