When Neil Kendall first got into financial planning, he thought he had an opportunity to change the lives of 100 families. When he started a financial planning practice, he thought the opportunity would be greater – perhaps 1000 families. Through his work with the Financial Planning Association (FPA), both as a member and more recently as chair of the association, he thought there might be an opportunity to change the lives of as many as a million families.

But even that falls short of where he is now.

Working on the global scene, as chair of the Financial Planning Standards Board (FPSB) council and the FPSB’s member advisory group (MAG), Kendall says the opportunity exists to change the lives of tens of millions of families.

“It’s how I look at it; the opportunity to change the lives of tens of millions of people is what FPSB does,” he says.

The FPSB is the body that develops global competency, ethics and professional practice standards to support the development of financial planning as a global profession. It has members from 26 territories – including the FPA, representing Australia – whose financial planning professions are at varying stages of development; and it controls the Certified Financial Planner (CFP) mark in all territories outside the US, including Australia though the FPA (within the US, the CFP board controls the CFP designation).

Kendall’s tenure as FPA chair was extended in November for a second two-year term, which will also allow Kendall to continue in his role as chair of the FPSB council, which represents all 26 territories represented by the FPSB. Between the two organisations, they represent 170,000 CFPs worldwide. He will also continue as chair of the FPSB MAG, which breaks the council members into special interest groups to discuss issues relevant to those smaller groups.

“We have formal council meetings, both teleconferences and face to face, conveniently all held in English, and all 26 territories attend those and have an opportunity to have a say in those meetings. I chair that council and also the MAG, which is the mechanism used to bring those 26 different territories together to discuss issues, have an opportunity to share ideas, have a look at how territories have developed differently and to share that, but then to provide feedback to the council on what needs to happen, what is happening, and what focus they think needs to happen from the FPSB.”

In a position to help, Kendall says he commits considerable time to his roles with the FPA and the FPSB, and does so willingly.

“I am in a position that I can do it,” he says. “I’ve seen what’s happened in Australia, and for all that people talk about the problems in Australia, we have made huge strides, and we are world leaders in the standard of financial planning that’s being delivered.

“That does not mean we have got to the endgame yet, but we are world leaders. We can share that information with other countries, which are very grateful. We can talk to them about what our regulators are doing, and what our regulators are talking to their regulators about, so they can get a good understanding of what financial planning might look like in their territory in the next five years. So you can make a huge difference by sharing that knowledge and information with those people.”

Even if financial planning is at different stages of development in different territories, the needs of individuals in those territories are strikingly similar, Kendall says.

“The number one issue in every territory, for consumers, is: Who can I trust for financial advice?” Kendall says. “It’s the number one issue in Australia; it’s the number one issue in every other territory. And the CFP is all about giving them an answer to that question and saying, ‘These are the people who are being held accountable to the highest professional standards; these are the people you can trust.’ ”

Issues are the same everywhere

The issues that have undermined trust in Australia are well documented, and Kendall says they are not significantly different anywhere else.

“It’s a lack of skill, a lack of education, conflicts of interest, product sales versus providing solutions to people’s goals,” he says. “They’re the same challenges that every single territory is facing. People are saying, ‘I have a problem, help me solve it.’ The FPSB has done some global research and the number one issue that comes out is: How do I pay off my house? It’s basic things that potentially are not on many financial planners’ radar. It’s how do I get rid of my debt? How do I pay off my house? [That is what] consumers are wanting to know.”

Kendall suggests that this relatively basic level of advice will be what drives the global growth of financial planning in the decades to come, “because that’s what actually brings them to financial planners’ doors”.

He says the other big universal issue is, inevitably, retirement funding.

“We talk about the shortfalls for retirement funding and all the issues we have here, and we have a compulsory superannuation system that doesn’t exist in most of the world,” he says. “Most people in the world are less well prepared for retirement than Australians.

“Retirement planning is an even bigger issue if you’re not an Australian because there isn’t a compulsory system that’s going to provide the kind of safety net you have if you’re Australian.”

Kendall says paying off debt is a basic financial planning strategy and one that’s not a particularly technical issue.

“But it’s not one that necessarily gets a lot of focus in training and education of financial planners,” he explains. “I would suspect there’s more training provided on the use of derivatives and the pricing of derivatives than there is on debt management and repaying home loans.

“That’s probably a learning for our academic community, and when we’re reviewing a syllabus to ensure that we’re actually addressing the mechanisms for people repaying debt and the sort of behaviours planners will have for getting debt repaid.”

Keeping certification relevant

Kendall says it is the role of the MAG and the council to canvass the views of FPSB members and filter their concerns and issues up to the FPSB board. One of those concerns is making sure CFP certification remains relevant.

“When we are looking at what it means to be a Certified Financial Planner, there are certain minimum standards that are prescribed globally,” he says. “There are expectations of what a financial planner will be able to do. We then start looking at ways to integrate those things into financial planner education, and making sure CFPs are qualified to respond to those sorts of issues that consumers are looking for.”
The FPSB council meets face to face twice a year and three or four more times over the phone. As chair, Kendall’s role is to “make sure the issues come out”.

“We’re dealing with 26 territories, the majority of which don’t have English as a first language and we’re operating in English. So it’s to make sure everyone participates and brings forward their issues. Culturally, Australians and Americans and Canadians are quite forward in expressing their views, but there are other cultures that won’t participate unless they’re invited. So it’s making sure we’re hearing from all the participants and getting all the topics on the table, and that everyone has that opportunity to participate.

“And as I said, the issues are remarkably similar. What you do see is different levels – some economies are in a much more advanced state than others, but everyone is going through the same process. Those territories that are a long way behind have the opportunity not to have to go through all the steps; they can say, ‘This is where we’re heading and how do we short-cut some of those?’, because other economies have shown us where we’re going to be headed.”

Kendall says an accurate analogy is leaping straight to mobile phone technology and skipping the entire copper network stage.

A disparate group finds a common bond

A seemingly disparate group is united by an unbreakable common bond, Kendall says.

“Everyone is trying to make sure consumers get a better outcome. That helps, when you’ve got a diverse group, if there is one target. If it’s all about getting consumers better outcomes, it does help to keep the group focused. So even though we have this diverse group, there is this common bond and a very strong driver. We’re all here to make sure consumers get better financial planning in future.”

An International Standard exists for financial planning, ISO 22222:2005, which sets a globally accepted benchmark for all individuals providing personal financial planning services. It specifies ethical behaviour, competencies and experience requirements and is relevant for all financial planners, irrespective of their employment status.

“We provide feedback into that about what that standard should look like,” Kendall says, and the FPSB’s influence extends beyond its 170,000 CFPs.

“It’s also about engaging with regulators to say there should not be second-class financial planners,” he explains. “We should be pushing this level of standard across the entire board, even those who do not choose to be part of one of the FPSB members. They should still be performing at a certain level. So it’s the same message we have in Australia, that we have to get the brand of financial planner trusted more, even for those who are not members of the FPA. We still need them to be held to a higher standard than they currently are.”

An example to the world

Kendall says even though financial planning has been under intense scrutiny in Australia, the industry and its regulation is “looked to as an example of what the model should look like”.

“There are similar progressions, perhaps where we were 10 years ago in some territories, but everyone is on the same journey. So we’re building a relationship now with IOSCO [the International Organization of Securities Commissions] so the regulators are talking to each other about what’s been going on. What happens in Australia in financial services is not entirely different to what happens in the UK or the US or Japan. The regulators are now talking to each other at that most senior level and we’re tapping into that to be talking to the regulators globally about what regulation needs to look like and what the standards should be for financial planning advice.”

International standards can be applied to issues such as ethics and competency and experience requirements; however, technical knowledge must necessarily remain territory-specific and a planner’s CFP designation can’t be directly transferred from one territory to another.

“There are two parts to being a CFP,” he says. “There’s a general body of knowledge you must have to give financial planning advice; and then there’s territory-specific knowledge, [along with] qualifications that you need to have as well.

“They are distinct. The FPSB does set global standards as to what’s expected in certification, and how that’s to be done, but each territory is applying its own individual filters to that to say, ‘In our territory what’s appropriate locally is this, this and this.’

“So I don’t think we’re aiming for, at this stage, a globally transferable CFP – it’s more globally recognised. If you’re dealing with a Certified Financial Planner, you are dealing with the highest qualified practitioner in your territory.”

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Simon Hoyle is head of market insight for CoreData Research.