After a third attempt, I passed my case study to become a Certified Financial Planner (CFP) professional. As someone who has always been ‘academically challenged’, this was a fairly significant milestone for me. The real importance of that day was however completing the requirements to become a Chartered Financial Planner.
Like many others at the time, I used CFP as the recognised exemption from the Financial Planning paper from the Chartered Insurance Institute. It offered me an open-book case study based way to become a Chartered Financial Planner, rather than the closed-book exam on offer from the CII. Writing a report based on a case study was far more attractive than spending three hours in a dusty exam hall trying to remember the facts I had crammed into my brain.
It was absolutely right that CFP was assessed this way. Comparing CFP with Chartered Financial Planner, the former is far more practical and about real life application of Financial Planning, with the latter biased towards demonstrating technical competence. Having the combination of practical skills and technical competence is essential for Financial Planners, which makes the combination of CFP and Chartered Financial Planner so valuable.
Choosing the most valuable qualification from the two is tricky. I wasn’t too surprised to read the result of the recent FP Today poll, which found a clear preference for Chartered Financial Planner. More than half of those who responded to the poll picked Chartered Financial Planner as the most valuable title, with those favouring Certified Financial Planner about the same as the number who found both titles equally valuable.
This perception is probably the result of several factors. Chartered Financial Planner is a better established brand in the UK. The CII and PFS have done a great job promoting Chartered as the gold standard, with their trade and consumer facing advertising raising its profile. They have also managed to convince other professional advisers of the value of Chartered through their Chartered Connections events.
Certified Financial Planner, on the other hand, dominates Financial Planning titles on an international level, but fails to do much here in the UK. During several conversations with Financial Planners from South Africa, Canada and Japan, it was always Certified Financial Planner acting as a common language.
Two things give me cause to be concerned about the future of the CFP designation in the UK. Firstly, the merger between the IFP and CISI has (inadvertently or not) demoted Financial Planning within the new organisation. What was once a thriving and supportive community of Financial Planners is now struggling to find a home in a much larger professional body. Secondly, the creation of a Chartered Body Alliance seems likely to promote Chartered Financial Planner, Chartered Wealth Manager and Chartered Banker at the expense of Certified Financial Planner.
It would be a real shame if the UK slips backwards in terms of numbers of Certified Financial Planners, at the expense of more Chartered Financial Planners and Chartered Wealth Managers. Financial Planners need the technical knowledge and applied skills that come with both qualifications.
That said, any improvement in professional competence is something we should all welcome. I’m excited to see what the new Chartered Body Alliance brings to the profession during the coming years, as anything which promotes the value of working with a Chartered Financial Planner or Chartered Wealth Manager is of course beneficial to our profession and to consumers.
It is so important that we all continue to learn and develop our knowledge and skills, so access to more CPD opportunities is something I welcome too. Whether CFP flourishes or withers in the future will be decided though not by the new Chartered Body Alliance, but by the CISI and its members. There is a valuable role for both CFP and Chartered. Helping Financial Planners, their professional contacts and clients recognise that valuable role is the real challenge ahead.
Martin Bamford CFPTM Chartered MCSI FPFS is managing director at Informed Choice.
He is a Chartered Financial Planner, Chartered Wealth Manager and a SOLLA Accredited Later Life Adviser