The Financial Planning Standards Board (FPSB), owner of the international Certified Financial Planner certification program, reported that the global number of CFP professionals grew by more than 8,000 last year, from 139,818 in December 2011 to 147,822 in December 2012. But Australia has bucked the trend, with the number of CFPs in the country dropping from 5,492 to 5,473.
FPA CEO Mark Rantall says it is the country’s ageing population that is causing the downward trend, and enrolments for the CFP certification program, which is the highest level of certification a financial planner can achieve, have actually seen a 20% increase. However, due to retirements and the duration of the course, it will take time before these numbers are reflected in Australia’s CFP population.
So why is CFP certification beneficial to you?
According to Investment Trends reports last year, CFP professionals are not only more likely to be hired, but also to be paid more and be seen as less of a compliance risk. The reports showed:
Consumers who use (or express a preference to use) CFP practitioners were willing to pay 28% more for ﬁnancial advice.
Seventy-five percent of planner licensees said they would pay up to $40,000 per annum more for planners with a CFP designation.
Forty-four percent of planner licensees said their practice would favour a CFP practitioner when it came to employing a new planner.
A Comparator Benchmarking report also shows:
Fifty-seven percent of licensees report that business revenue increased as a result of employing CFP professionals.
Sixty-five percent of licensees claim that client relationships are strengthened by having a greater number of CFP practitioners.
Seventy-eight percent of licensees state that corporate risk and complaints are reduced by having a greater number of CFP practitioners.
According to FPA and ASIC data, CFP professionals account for more than 35% of the planner population but less than 2% of ASIC enforcement activity.
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Phil on 30 Jan 2013 01:16 PM
Wow $40,000 p/y increased in wages due to a handout designation. . . Not to bad.
Patrick Canion on 30 Jan 2013 01:57 PM
Hyperbole:'CFP numbers falling' & 'Australia bucked the trend'
Fact: CFP numbers reduced by 0.34% due to retirements.
There can be no doubt at all that practitioners who make the effort to obtain and retain their CFP certification provide better quality advice and are better rewarded for their quality and diligence.
Pat on 30 Jan 2013 02:45 PM
Patrick: there is plenty of doubt. Firstly, I used to work for a couple of "advisers" who received a grandfathered CFP solely based on experience. This experience amounted to using a client's home equity to gear up into a wrap portfolio and sell some insurance. Hardly quality advice; more a means of generating FUM based fees.
Over 10 years, between three advisers, we have had 2 prospective clients ask if we were CFPs: one of those prospects is still a client.
There can be no doubt that the majority of prospective clients have no idea what a CFP is.
I gave mine up when I realised the FPA stood behind commission and FUM based fee generating institutionalised advisers [or rather the institution owners] rather than quality advice.
Daniel Boce on 30 Jan 2013 04:23 PM
Yes a CFP certainly provides better advice then a experienced planner who spends his accreditation hours on strategies, rules and products that he / she wants to focus on. No doubt about it all.
Patrick Canion on 30 Jan 2013 05:28 PM
Pat: I'd be very interested in understanding your basis of your last remark. The FPA provides equal representation for all individual members, and in fact does not have institutional membership. The FPA has a process to investigate and discipline members who do not adhere to the code of professional conduct.
Merely asserting something does not make it fact. What is fact, however, is that CFPs account for more than 35% of planners yet account for less than 2% of ASIC enforcement activity.
GAB on 30 Jan 2013 10:00 PM
I agree with you Pat, apart from the attack on FUM based fees. When I go to PD days lately all I hear is business consultants spruiking set fees that will increase our profits, nothing to do with what's right for the client. I'm sticking with asset based fees thanks, if I'm managing people's wealth. Set fee for strategy...you can use both you know.
Pat on 31 Jan 2013 08:31 AM
@Daniel: have no idea what you are going on about at all. I will take the blame for that.
@Patrick - I quit CFP years ago when we still had Principal Members. Many CFPs back then were of the grandfathered variety where all you had to do was be old enough to send in your tokens.
@GAB: my problem with FUM based fees as I see them charged is that advisers, when they bother to provide ongoing strategic advice rather than just review investments, is that they relate the value of that strategic advice to the amount of money the adviser is managing for them. Or, more commonly I am sure, they only provide investment review advice once the initial Plan is done. In that case, charge %s to your heart's content.