The FPA is pushing its CFP brand hard. Simon Hoyle looks at what the association hopes to achieve, and how
If you are already a Certified Financial Planner (CFP), then the future is yours. Or at least it will be, if the Financial Planning Association of Australia (FPA) succeeds in a new push to promote the brand.
And if you’re not a CFP, the message is clear: become one as soon as you can.
If FPA membership is what separates financial planners from the other 200,000 or so financial product advisers in Australia, then being a CFP is the only thing that really differentiates the cream of the crop from the mass of other financial planners.
In February, the FPA appointed its first CFP Ambassador - Rodney Lavin, a CFP based in Gippsland, Victoria. It’s the first time a CFP has held such a role anywhere in the world. Lavin gained his CFP in 1995, making him one of the first planners in the country to earn the title.
Over the coming year Lavin will give up a lot of his time to promote and explain the benefits of being a CFP, and to encourage his fellow CFPs to do likewise. He will become the public face of CFPs in Australia during the term of his ambassadorship.
Jo-Anne Bloch, chief executive of the FPA, says a CFP is “someone who has done a fairly rigorous program of what we call the ‘four Es’ – ethics, experience, education, and examination”.
“For us, there are so many financial product advisers out there - 200,000ish, as you know – and we’ve said before that the problem we face is differentiation. Who is the consumer going to go to, [to] get trusted advice from?” she says.
“We want all financial planners to be CFP professionals, and we want consumers to know that if they go to get good, trusted professional advice, they can go to a CFP professional.”
The organisation that licenses the CFP mark in Australia is the Financial Planning Standards Board (FPSB), a body based in the US that Corinna Dieters, a former chair of the FPA, will chair for the next 12 months.
Noel Maye, chief executive officer of the FPSB, says the board is “a non-profit, standards-setting organisation”.
“We have 23 member organisations in 23 countries around the world, one of which is FPA Australia. Each of our organisational members is a non-profit professional body that does a certification program in a country.
“The role of the FPSB is to develop competency, ethics and practice standards for the professional practice of financial planning, and then for FPA Australia and its peer organisations to take that global standard and to incorporate local laws, products, tax and [customs] so that the CFP certification delivered in Australia is an Australian certification that determines competency in this country. But it’s done on the global platform.
“We have 126,000 CFP professionals around the world, and we’re in 12 countries in Asia/Pacific, seven in Europe, South Africa, Brazil, Canada and the United States, with a fair bit of interest coming to us from Europe, South America and the Middle East.”
The FPSB has only one member organisation per country or territory.
“It’s because when we bring on a [professional] body, what we like to do is have them bring together the different strands,” Maye says.
“Rather than saying, ‘We’ll be in banking’, or, ‘We’ll be in insurance’, we want to say [that] whether you’re in banking or in insurance or in broking or independent, you can come to the certifying body to sit the exam and be certified to practise.”
Maye says the FPSB has two major issues to tackle in 2010.
“One of the things the organisation is going to do is look at our whole governance system,” he says.
“Right now, we have 23 individuals sitting around a council table, we have a board of directors, we have various regional forums – is that the right structure? There’s going to be a whole re-look at making sure we have the right program in place to support growth going forward.
“Another priority is going to be having a framework for professionalism. We think it’s very important. If you look at medicine, if you look at law [or] accounting, it isn’t just the individual professional. They tend to work for firms that support professional practice, they tend to come through educational institutions that have schools of medicine, schools of law, and so forth. So we’re really looking at how do we put together all the building blocks for a profession, so that we can then make sure that we’re developing programs and tools for them as well.
“Those are the two large priorities. But another one is working with the 23 affiliates. Late last year we finished the first pass of global standards for education, exams, experience, CPD [continuing professional development], ethics, practice and our competency profile. We’re going to help in 2010 with the local application of those.”
Dieters says Australia has significant representation on the FPSB board, including Steve Helmich from AMP, ipac Securities co-founder Peeyush Gupta, and “honorary Australian” Ian Johnston, previously with the Australian Securities and Investments Commission (ASIC).
“That’s an interesting perspective for us to have on the board as a standards-setter, because one of the key things we do as a global standards-setter is engage with the regulators around the world. Having somebody who comes with that regulatory perspective onto the board is showing that we really do have that high level of engagement.
“And one thing you do have to remember is that whilst we have member countries or organisations who deliver the program, we actually have a mission to serve the end client of the financial planners as well. Standards are there for those people practising financial planning, but they are there to service the interests of the end user, being the client.”
A key element of Lavin’s role as the first CFP Ambassador will be to harness the talent and enthusiasm of other CFPs in promoting the brand.
“I see my role as two parts. One is to [help] fellow CFPs out there, to understand the importance of getting that qualification in the first place. I think we’ve undersold ourselves up until now. I had a trip to America just prior to Christmas and I was pleasantly surprised to see…it was a designation that people understood.
“I’m also a Certified Practising Accountant [CPA], and I recall 25 years ago when they introduced that brand here in Australia, it was brand new and they ran a very good campaign on television and everyone wanted to become a CPA. But consumers also knew that if they were going to a CPA they were not going to your average accountant, they were going to someone who extended their education, experience and knowledge.
“CFP is the same here in Australia. We’re in the very early stages. We’ve got 5000 CFPs here … but there are many [financial planners] who are not CFPs and they should want to go out of their way to get the extra educational requirements, do the CFP 1 to 5, and engage and want to become CFPs.
“The other side of the equation is consumers should be seeking out someone who is a CFP, who is prepared to dedicate their time and efforts to raise the standards. So essentially, it’s about creating a gold standard – every consumer should want to deal with a CFP, and every planner should want to be a CFP.”
Bloch says the FPA has a program aimed at consumers and FPA members to support Lavin. He will make media appearances, and be put forward by the FPA as a spokesperson on financial planning issues.
Lavin says his commitment to the CFP program is significant.
“It’s like anything that you’re prepared to be engaged in,” he says.
“If you’re prepared to put in the time, I’m sure that in the long run I will be rewarded. My clients who know I’ve been [made] ambassador are over the moon – so there’s upside to me in that. But there are many parts of the FPA where people volunteer their time.
“I was one of the original in the first few years to become a CFP. Back then there were maybe 100 CFPs. Today we’ve got 5000. Maybe in 10 years from now it will be the known designation. You’ve got to start somewhere, and the journey has begun.”
While Lavin is the public face of CFPs and the “top-end” of the industry, the FPA’s inaugural Blogstar, Kane Piper, continues to attract new student members to the FPA. Bloch says the association’s student membership has doubled since the Blogstar program started.
