If you’re a Certified Financial Planner (CFP), you’ll be familiar with the Financial Planning Standards Board (FPSB). And if you are on track to become a CFP – or even if you’re at that stage of your career where you reckon you might want to become one – then you should become familiar with the FPSB.
It’s the body that administers the CFP mark for the world outside the United States. It’s based in Denver, Colorado (of all places) and this month it turns 10 years old.
There’s a strong Australian connection to the FPSB. Its current chair is Steve Helmich (his term expires in March 2016), executive director of financial planning at AMP; and its past chairs include Corinna Dieters, currently a director of Seaview Consulting. Helmich and Dieters are also both past chairs of the Financial Planning Association of Australia (FPA) and the FPA is the sole entity in Australia permitted by the FPSB to bestow the CFP designation on its members.
A global profession
Examining the role and the development of the FSPB over the past decade is timely, as the domestic debate about financial planning educational standards continues. It’s a reminder that financial planning is, increasingly, a global profession; and that professional development and progress is most effectively driven by the practitioners themselves, rather than by governments.
The FPSB started out 10 years ago with 17 members, including the FPA. At that time, there were about 83,000 CFPs and the numbers were was dominated by the US. Today, the number of CFPs has more than doubled, and since 2009 there have been more of them outside the US than within.
The financial services industry loves an acronym. FPSB’s is LASER – which stands for leadership, awareness, standards, engagement and recognition. It applies these principles
“Being part of an independent body that sets standards globally ensures a degree of diligence and oversight that’s above what you bestow upon yourself,” says Mark Rantall, chief executive officer of the FPA.
“Being part of a global community of CFP professionals, you get to share best practice and [compare] global similarities and differences. And a global network of CEOs and board members around the world gives strength to the elevation of financial planning into a respected profession.
“It’s easy to get focused on the day-to-day and the tactical things that are happening in our lives; but when the FPSB gets together all we talk about are long-term strategies and objectives to lift standards and a professional framework. There’s no other avenue for that to happen.”
Ethics and standards
The FPSB itself has a code of ethics that will be familiar to anyone who is also familiar with the FPA’s code of ethics. They are, in fact, identical, and that’s not a coincidence. The FPA is sometimes criticised for “importing” a code of ethics; in fact, the local code was developed collaboratively with the FPSB and its global affiliates. This means that a financial planner in Australia who complies with the FPA code of ethics also complies with a globally recognised code. That’s another aspect of the “community” of financial planning fostered by the FPSB and the CFP designation.
The FPA has taken the eight ethical principles and developed a comprehensive code of professional conduct. In this respect, Australia is clearly exporting its expertise to the world.
Around the world
The FPSB has links to financial planning associations in 26 territories, and there are more than 153,000 CFPs around the world. About 5700 of those are in Australia. Naturally, the US has the greatest number of CFPs (69,000), but perhaps surprisingly, outside of North America the greatest number of CFPs are found in Japan (19,000), just ahead of China (15,600). And perhaps just as interestingly, the UK has fewer than 1000.
The latest body to link with the FSPB is Finansal Planama Dernegi in Turkey (FPSB Turkey). The FPSB notes that “at present, financial planning does not exist as a professional practice in Turkey”. FPSB (Turkey) has 24 months to build a program to deliver CFP certification to the country’s financial planners.
Clearly, financial planning isn’t equally well developed in all countries. The number of CFPs in China, for example, while high, does not reflect a hugely sophisticated financial planning community; financial markets there, and consequently the range of financial planning services individuals want or need, are relatively underdeveloped.
