While advisers question the role of the CFP designation in the wake of FASEA’s announcement that it would earn only two credits towards a graduate diploma, the FPA says it will wait for further news from the authority before it conducts a review into the benchmark designation.
Speaking to Professional Planner, FPA chief executive Dante De Gori says the immediate plan for the association is to wait for FASEA to confirm its application to get recognised prior learning for its Certified Financial Planner designation and focus on helping advisers navigate the standards.
“Our short-term focus is obtaining the maximum amount of credits for the CFP program and that application is with FASEA,” De Gori says. “That’s an ongoing application and we’re complying with FASEA’s process.”
Plans to review the CFP designation – which FPA head of policy and standards Ben Marshan says will probably occur in “early” 2019 – are on hold, De Gori says, but should be back on the table “within 12 months”.
“Our other current focus is helping our members get through the FASEA program, then we’ll look at the CFP program and how it should evolve or change going forward,” he explains.
The FPA is under pressure from advisers to justify the CFP designation after FASEA’s announcement.
Advisers with the CFP accreditation, like Troy MacMillan from advisory firm TWD Australia in Perth, expect other advisers to take simpler, quicker and cheaper routes to meeting the education authority’s requirements.
“To date, we’ve always promoted [the CFP] in our office as what every adviser should aspire to,” Macmillan said at the Zurich/AFA Adviser of the Year roundtable on Wednesday. “But now, if there’s another pathway that is going to give them the same outcome and be recognised in our profession, you need to look at that.”
Those alternative pathways, as per FASEA’s January policy document, include a relevant degree, which provides four equivalent units of recognised prior learning, and the advanced diploma of financial planning, which provides the same amount of RPL as the CFP – two equivalent units.
FASEA’s ruling that the CFP designation is equivalent to the ADFP qualification – and worth only one quarter of a graduate diploma – disappointed the FPA, prompting Marshan to say that his gut feeling “is that we will need to change the CFP program”.
The CFP is regarded as the highest accreditation for advisers precisely because of the academic rigour – and amount of work – that goes into achieving the designation. The Financial Planning Standards Council estimates that CFP coursework takes a minimum of two years, and according to the CFP Board, the final examination had only a 64 per cent overall pass rate in 2017.
The CFP is widely considered much more arduous – and respected – than the ADFP, which Mentor Education estimates can be completed in under 12 months.
Hugh Robertson, who runs Centaur Financial Services on the Gold Coast, says the CFP is as rewarding as it is difficult.
“It’s a really tough thing to get through, but it’s great because you’re learning so much through it and it’s so applicable to what you’re doing day in, day out, which is fantastic,” Robertson says.
For time-poor advisers keen to meet the FASEA standards, however, the path of least resistance will probably prove the most attractive. The fact that the CFP designation entails yearly fees means the ADFP is also the path of least cost.
“It’s extensive, and it’s a massive commitment of time,” Robertson says. “And I think the fail rate is quite high, so many people don’t get through. That raises the question around what [the FPA] will do.”
TWD director Cara Graham puts the FPA’s conundrum into perspective.
“If they make [the CFP] shorter, then are they compromising the quality of the outcome?” she asks.
The ‘next thing you do’
De Gori says the FPA anticipates a dip in CFP enrolments while advisers focus on study that presents an easier path to the FASEA education mandate.
“It’d be no surprise to anyone that advisers – rightly so – are concentrating on what they have to do to maintain their authorisation,” De Gori says. “Yes, for some people that will not be the CFP because they need to do a full graduate diploma or something like that. And that’s fair enough.”
By FASEA’s cut-off date for education qualification in 2024, however, he expects the CFP to regain prominence for advisers.
“After that, of course, we go back to the position where everybody is effectively FASEA qualified, so what do advisers want to do [then], in terms of differentiating themselves?
“The CFP is actually – as it always should be and as it’s been positioned – your professional designation. It’s the next thing you do to differentiate yourself and become more senior and experienced.”