The Certified Financial Planner designation will remain relevant for Australian advisers because it represents professionalism and a higher level of expertise, according to Noel Maye, CEO of the Financial Planning Standards Board.
The FPSB owns the CFP program outside of the US and licenses it to 26 countries, including Australia, where it is run and administered by the Financial Planning Association.
Speaking to Professional Planner this morning in Sydney, Maye says while “there are always easier things to do” advisers will continue to undertake the designation to set themselves apart.
“People can always do nothing, or they can do the regulatory minimum,” Maye says. “But I think what’s compelling is that for decades people have been voluntarily taking the next step through CFP certification.”
This will continue to be the case, he believes, despite the Financial Adviser Standards and Ethics Authority awarding the CFP a meagre two units towards an eight-unit graduate diploma (post-graduate degree).
A true profession, Maye says, isn’t bound by minimums. While some advisers may take the easiest route, he believes there will be others that want to pursue the CFP to “show what they can do” and to “be part of a profession”.
“It’s not a minimum standard,” he says. “It’s a high-level professional standard.”
Despite the CFP’s success, FASEA’s assessment of it’s recognised prior learning value has created a significant challenge for the FPA.
Put simply, there are quicker and easier paths advisers can take to meet FASEA’s mandatory education requirement than the CFP. The educational rigour that makes it so respected also make it a less attractive option for time-poor advisers trying to meet the minimum standard by January 1, 2024.
The FPA signalled that the CFP would be up for review at their 2018 congress, something that chief executive Dante De Gori says is “timely”, given that the current five-unit iteration of the program has been running since 2005. “It’s ongoing,” De Gori tells Professional Planner, “but could take until the end of the year.”
De Gori says they aren’t looking to make the CFP easier, rather their intention is to modernise it with a view to including new areas such as behavioural finance.
Maye says that “approximately 70 per cent” of CFP content is global, with the other 30 per cent being “localised”. This leaves little wiggle room for the FPA to tailor the designation for Australian advisers.
Asked whether there is impetus to adjust the designation model – where advisers pay yearly fees and meet ongoing standards – Maye says “the pressure’s always been there”.
Ultimately, however, attaining and maintaining the CFP standards sets an adviser apart, he says. Getting a one-off qualification may be easier, but that learning may not be as relevant as an ongoing designation in a few years.
“The key part of a profession is not only that continuous learning but actually embracing the concept that you have to keep learning,” Maye says.
The CFP designation has come a long way. In 1990, Australia was the first country to offer the designation outside of America after it was brought onboard by the International Association of Financial Planning, which eventually merged with the Australian Society of Investment and Financial Advisers to form today’s FPA.
The late Gwen Fletcher was instrumental in both bringing the CFP to Australia and the marriage of the two groups to form the FPA.
Today, Maye says the CFP is a network of 26 streams coming together around a global standard. Each of those regions is at a different point in the evolution of financial planning towards a profession, and each faces their own challenges.
“It’s a profession that’s 50 years old in the US, 30 years old in Australia, and 3 months old in Turkey,” he says.
The CFP’s expansion globally has been steady. At year-end 2018 there were 181,360 CFP professionals worldwide, up 3.3 per cent on 2017. While the US and Japan have the most CFP professionals (83,106 and 21,631, respectively), Australia sits fifth in terms of numbers with 5694.