FPA hits back at CFP critics

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What do you think of the Certified Financial Planner (CFP) designation? Speaking to Wealth Professional, FPA CEO Mark Rantall has launched a passionate defence of his organisation’s financial planning certification.

The CFP debate proved to be a controversial one on the Wealth Professional online forum, so we decided to take some of the criticism levelled at the FPA to its CEO in order to hear their side of the story.

First up, Rantall explained that the FPA believes that all financial planners should aspire to a professional certification “that is of substance”.

“So, as we sit here, we’ve got over 5,500 certified financial planners, and the certification will be equal to any professional designation in the financial services area,” he said.

“It requires an undergraduate degree to enter the program. It would then require five units at a post-university masters degree level study, together with three years’ supervised experience. So it’s a certification of substance.”

The idea, explained Rantall, is to have Australian financial planners working towards a certification whose standards are equal to other respected professions, such as law or accounting.

“It’s mapped out on the accounting qualification and the law qualification, but specifically the ICAA and CPA certification,” he said. “That’s certification, but that’s only part of it. It also requires you to sign up to a professional framework of ethics and standards.”

Why the ongoing fees?

Critics, however, have questioned why those planners who have achieved the CFP designation must continue to pay fees to the FPA in order to retain those three letters after their name.

“There’s no profession in the world that you don’t have to sign up on an ongoing sense to. And it’s not just signing up to carry the designation. Part of that is your continued sign up to say that you’ll adhere to the code of professional conduct and standards. And part of that is to also sign up to ongoing professional development,” said Rantall.

“You can’t have a CFP certification, or an ICAA certification or a legal certification and just carry it from professional association to professional association. It just doesn’t work like that.

“A professional certification is a certification that goes hand in hand with professional standards and CPD that is run by the professional association.”

He added that he believes that there is some confusion as to the difference between a professional certification and a tertiary education.

“It’s not a tertiary education,” he said. “Tertiary education you go through, you get your degree and that’s it. It’s a point in time thing. Your certification and designation is an ongoing commitment that you sign up to.

“You wouldn’t want to go and see a doctor who just did their degree and then wasn’t part of a professional association and ongoing education.”

What’s the value of CFP?

Another criticism levelled at the CFP designation is that it isn’t widely recognised in the public domain. Rantall conceded that there is still work to be done in promoting the good work that financial planners do, but passionately defended the CFP’s reputation.

“We’re increasingly promoting the Certified Financial Planner designation. And we also work with about 47 professional partners, consisting of licensees in this country, to help promote the CFP certification.

“We’ve had record numbers of enrolments in CFP this year, it’s an increase of 65% over the same period last year.

“Investment Trends research shows that 67% of financial planners believe the CFP designation has a positive influence on their reputation. And 41% believe that it has a positive influence on their business growth prospects. So that’s quite significant. It’s common knowledge that most financial planning businesses in this country do recognise the CFP certification. And it’s a desired requisite when seeking employment.

“And many businesses also sponsor their financial planners into the CFP program. We’re finding that’s increasing more and more.”

Do you agree with Rantall’s sentiments? Join the debate by commenting below.

More stories:

CFP debate rages on

Former FPA chairman hits back at CFP criticism

CFP 'cash cow': Independent planners attack FPA

CFP enrolments skyrocket as FPA points to reputational benefits

  • Shannon on 4/10/2012 11:54:33 AM

    Of the 5,500 CFP's how many have actually done the 5 subjects of study or hold an undergraduate degree? This is why it still lacks credibility.

  • Martin Benton on 4/10/2012 12:00:23 PM

    The CFA (Chartered Financial Analyst) will become the gold standard for the finance industry. The CFP simply does not cover the investment side of financial planning in enough detail to be credible anymore.

  • Roger on 4/10/2012 12:02:11 PM

    Spot on Shannon. No qualification means anything if it was "given" just for time served in the industry.

  • Martin Benton on 4/10/2012 12:02:15 PM

    The CFA is becoming the gold standard. The CFP simply does not cover investment matters in enough detail to be credible, particularly in these kinds of markets.

  • Mark Smithson on 4/10/2012 12:02:49 PM

    I completed the first 4 CFP subjects and received 3 credits and a distinction. There is no doubt in my mind the CFP Program is a money making scheme for the FPA and does little to improve the Professionalism for the Financial Planners who complete it. The CFP program is an academic course that does not relate to real life scenarios that Financial Planners deal with on a daily basis. Speaking from personal experience, I have 12 years experience as a sentior Financial Planner, the FPA are out of touch with licensee requirements for Financial Planners and there are better associations that Planners can join to represent them and provide more relevant study.

  • Rob Pyne on 4/10/2012 12:13:51 PM

    As an emerging profession, it will take some time for the reluctant passengers to get on board. Despite this, the train is moving on and it is much harder to catch it when it really gets rolling. Keep up the good work FPA!

  • Mark Di Pietro on 4/10/2012 1:51:44 PM

    The most valuable part of being a CFP should be that you attract prospective clients due to your knowledge, experience and reputation. Problem is however that most people go to their accountants for financial advice and the accountant passes them on to their own planner, and as far as the clients are concerned, they could be sitting in front of Bozo the clown and still take the advice. Clients don't really care about the CFP at this point in time, for as long as they trust their accountant, they'll pretty much sign anything. I've been saying for years that the majority of Australians get their financial advice from the wrong people (ie. accountants, solicitors, bank managers and staff, industry super funds etc.). Hopefully us CFP's get there one day. Keep trying Mark.

  • Martin Le Tessier on 4/10/2012 1:54:21 PM

    I have a university degree in Commerce,the 8 unit DFP (ADFS now), 14 years in Financial planning as an adviser and a further 17 in financial services. In 14 years I have never once been asked if I was a CFP. My clients may like my degree or may not be interested. Most will make up their mind over time as to the value of my advice and my professionalism. I have worked with CFPs who got their designation for doing a 6 unit DFP and a few years in the job. A lot of them are good advisers some are not. I refuse to waste good time and money on the CFP Program for no value just for the privilege of paying higher FPA subscription costs. Professionalism or lack of it is within each of us by how we act and what knowledge we possess and effectively use.

  • Paul Reilly on 4/10/2012 2:34:55 PM

    My big issue is with the current holders of the CFP designation, most would have just been given it after a certain number of years experience, and to be a tad controversial some of them I wouldn't allow to give advice to my Golden Retriever.

  • Paul Wiltshire on 4/10/2012 2:54:17 PM

    Maybe the FPA shouldn't have tried to stand alone in the market. They came out with a very cocky ad on TV that when I saw it I felt they were trying to be the only player in the game. Disturbing to say the least. I think the slogan was only trust a FPA financial planner!! Oh really, should we find some cases of this not being the case? Really I don't think any association in our industry really gives too much of a shit, the government doesn't either. I wish some of the stories of the big banks came out. The only ones who are going to lose out of all of this is the consumer and Australian families.

  • Paul Wiltshire on 4/10/2012 2:57:52 PM

    Also you don't have to hold certain badges to make you a good planner, it actually takes heart and real care for the client and their families. This doesn't take being a member of an association and it doesn't mean shit what degrees you have that too does not make you a "better" person. If people in our industry at all levels did what was right by people instead of greed, we wouldn't be talking about this right now. That's the truth my friends.

  • Steve Hickman on 4/10/2012 3:01:30 PM

    The problem with the CFP designation is that most advisers who were in the industry before 2004 received the CFP designation by completing DFP subjects 1-8. If the FPA were fair dinkum they would ask all of those advisers who got their CFP before the current requirments were made law, to sit the extra 4 subjects. It would be surprising how many wouldn't or couldn't pass.

  • Wayne Leggett on 4/10/2012 3:03:32 PM

    Paul, you really ought to check your facts before you "mouth off." I was one of the first advisers to receive the CFP designation and I can assure you that I, like the rest of my contemporaries, had to study and pass exams to obtain the qualification, just as today's CFP students do. Having a qualification doesn't make you a good adviser. It simply gives you the requisite tools to be one should you choose to follow an ethical career pathway.

  • Andrew on 4/10/2012 3:11:08 PM

    Shannon, I did my DFP one to eight in the mid to late nineties, I have been an adviser for 24 years and have under graduate and post graduate qualifications in accounting and finance in addition to the DFP studies and I am very happy to wear the CFP badge and there are many more like me. The bar is being raised all the time and the higher the better as far as I am concerned. If 15000 advisers falls to 9000 advisers as per the projections I am thinking that I would be hugely better off. The current government is trying to dumb down the system to suit the industry funds which is fine however that has no impact on my relationship with my clients. Where the adviser wants to sit in the chain is up to the adviser and the good quality client will use the education of the adviser and the impartiality of the advice to determine who they choose to deal with in the future.

  • Bruno Festa on 4/10/2012 4:48:07 PM

    Well Mark, no need to elaborate on the above comments, I think it has all been said. But keep if you must, keep on batting.

  • Rod m on 4/10/2012 5:26:25 PM

    Well said Shannon i have been in the industry for 35 years so what, it is our clients that make our businesses and the Trust they have in us as Individuals, sadly I recall a fair number that were selling Westpoint property were FPA members and they obviously forgot about the code of ethics and morales , sorry but i do not believe having initials after your name makes you a better adviser, its the person inside that counts. Bring on FOFA just another little hurdle for us to Jump over just like all the others that have been put in front of us over the years.

  • Drew Potts CFP on 4/10/2012 5:56:01 PM

    Wayne, you are spot on with your comments I went through the same process , seems to be a lot of very ill informed advisors out there who need to take a deep breath and get a few facts together before hitting the keyborad. More power to the FPA and what they are doing to get our industry recognised and behaving like a profession.

  • Dean on 4/10/2012 10:45:28 PM

    It's great that the qualification standards for CFP are high now, and great that they evolve over time. However they were far too low when the CFP program started, and that mistake continues to undermine the credibility of CFP as a standard. Statistics I have seen suggest that 40% of current CFPs don't even have a university degree. It's time for the FPA to admit that the original entry standard was too low, and make it mandatory to have completed a uni degree to renew as a CFP from July 2013.

  • Paul Wiltshire on 5/10/2012 9:54:31 AM

    I will and can "Mouth off" about what ever I like. The FPA ad stated only trust and FPA adviser, so does that make me not trust worthy because I'm not an FPA adviser? Really. I've worked with all types. My point was to blanket "Good" advise under one banner is wrong. We are all in this industry together, but I get that there is attacks on small business and especially on small risk only advisers like me. The Facts I was stating is the Crooks who did this to our industry are still in it for the most part. They covered the crooked stuff up to protect brands and guess what some of those advisers never got outed. I know there are good and bad planners, I don't care what governing body you are associated with I take you merits of integrity and care for my clients on a face value of if I believe that planner is a good person not what association he is a member of. My statement related not to the education piece but more the fact FPA have come out defending themselves when we all saw the ad and their real intentions.
    Regards,

  • Julie on 5/10/2012 9:55:34 AM

    It is true that CFP's would love clients to ask them if they are a CFP before doing business with them. But I ask you, how many of you tell your clients you are a CFP and why? Getting the message out to consumers should not just rely on the FPA. I do agree that there are some seriously misinformed planners out there willing to have a cheap shot at CFP's who have been practising for a long time. There are equally some newer CFP's or planners in general that you might not consider worthy. Lets work together to build a profession and recognise that it will develop and what you do today to be a CFP may not be what the new breed of CFP's have to do tomorrow, wil you be less of a CFP then?

  • Shannon on 5/10/2012 10:37:06 AM

    Julie, you are spot on. The landscape will continue to change and along the way there will be some good advice come from CFP's and good advice from non CFP's. What we should be promoting as an industry is good advice from all,regardless of being a member of FPA or AFA or whoever then we can eventually become a profession.

  • John on 5/10/2012 10:42:32 AM

    I have a Commerce degree, a Post-Graduate in Financial Planning via FINSIA as well as having passed my CFP certification and I can tell you the CFP and the FPA are a joke. They are irrelevant. I also agree with Martin above - the CFA is what you should aim to achieve but as most financial planners are just 'strategic' accountants, most wont know what the CFA is!!

  • david m on 5/10/2012 10:52:15 AM

    Paul, as a CFP and member of the FPA who paid the advertising subsidy to fund thoses ads, why the hell wouldnt we want the message to be to see a FPA member? Would you pay for an ad that said go seek advice and not provide your phone number! If you want to benefit from my money Paul - you need to join the FPA, complete a degree and go through all the hoops. If not, just continue telling your new clients why's its not worth your time..meanwhile I'll keep telling my new clients why we have a waiting list. Each to their own.

  • Paul Wiltshire on 5/10/2012 11:46:41 AM

    Totally understand you point David. I actually thought after watching the ad that I should join the FPA so people think I am trust worthy because now some may be under the impression only FPA planners are honest........ But my clients, referrers, family and friends in the community know I am honest and trust worthy so I don't need a ad to tell them this. They know already that I care for people and I have never had one client question my integrity, make a complaint or be in a worse position after an interaction with me as their adviser and none of them have ever cared what organisation I was with at the time. Personal integrity goes way further the what money can buy in an Advertisement. After watching that ad I felt the FPA was against advisers who was not with them! That's not how our industry will be run in the future. Sorry for "Mouthing Off" But that's just how the FPA have made me feel as a "good" adviser in the industry who was not one of their members. Maybe they could have worded their advertisement better to support the industry as a whole not just their advisers. I'm glad you felt you got your value for money from you membership. You have a waiting list because you are a good planner and a good person who cares not because you are with the FPA or have CFP or CPA that was what I was trying to say. and I doubt you think planners not in the FPA are all not trust worthy as the AD stated. I've never had to explain to a client why I am not in the FPA, but each to their own as you say.

  • anne C on 5/10/2012 12:07:32 PM

    what a lot of noise about very little!! The FPA's a joke always has been always will be Ho Hum Yawn. 5500 CFP'S. how many have degreee's and interestingly will they be required to "upskill" if the FPA introduces their new education requirements and more interestingly how many would pass!! Its my experience Clients don't know or care what an CFP is and David m PLEASE you have a waiting list because you are a CFP!! I don't think so. You have a waiting list because you are no doubt a good adviser and a great client proposition and care about those you advise.You do not need to be a member of the FPA or a CFP to qualify for those designations.

  • david m on 5/10/2012 12:17:54 PM

    Paul, you raise some excellent points. I'm not sure if I do get value for the AD, as whilst you noticed it - as a planner you would, but did the target audience get it? I guess the FPA want to position consumers to look for the "brand". This makes sense and I support this. Does this means all FPA members are awesome and all advisers who are not members are rogues..of course not. Ultimately, it's up to all of us to raise the bar or suffer the consequences of lack of trust, over government regulation and bad business conditions..

  • Paul Wiltshire on 5/10/2012 12:50:09 PM

    In saying all that, I would not send my clients to a financial planner who didn't have the higher education, hence why I do refer my clients to fully qualified Financial advisers. However, it makes no difference to me if they are in the FPA or hold CFP or a CFA, I care if they care for my clients or not and if they do have a high level of understanding of our industry and can help my client financially by getting value for their money. But I agree 100% that the education is needed before you can give holistic advice, that goes without saying. I wasn't attacking the CFP or CPA only the FPA's views that only their advisers are trust worthy because that is not the case. I don't need an organisation telling people I do the right thing, I just do it and that should be the case across the industry no matter what.

  • david m on 5/10/2012 3:09:47 PM

    @Anne C. You are right, my clients don't care about the CFP status, more our reputation. It would be nice to think one day perhaps they will, but in part this will require us to as an organisation to ditch the 7000 AFP's and 2500 CFP's who no longer make the grade. Trouble is..that doesnt leave many people to pay Mark's wages..

  • Paul Wiltshire on 5/10/2012 3:45:06 PM

    I doubt the Target market watched it in between big brother or farmer want a wife lol. It's a known fact in BIG Business to turn and divide the workers, in our case us the planners working for our clients. We don't work for the Banks (or at least we shouldn't) we don't work for the insurance companies, we don't work for the Government or Unions, We work for our clients. this has been lost at some point in the discussions on making our industry better. Better for who is what I ask. On that note I'm going home...........

  • Tahir on 18/11/2012 3:38:11 PM

    I have cleared all levels of CFA exams. I wonder whether I should pursue CFP or not. Can any one advice please.

  • Lets get real on 19/11/2012 10:50:04 AM

    Tahir, well done thats a huge achievement. Do the CFP (if you have time and desire) if you want to expand your strategic advice skill set. Don't do it from an investment perspective only as you are clearly covered in this aspect by the much more vigorous CFA. My opinion only so happy to hear others.

  • Lets get real on 20/11/2012 12:55:55 AM

    Rigorous even!!

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