What do you think of the Certified Financial Planner (CFP) designation? Speaking to Australian Broker Online's sister publication, 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.”