CFA / / CFP Designations

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Sep 11, 2009 4:11 pm

Should i? or is it a waste of time and money? Lots of people say I should focus on prospecting for the first 3 years, 500day war etc.


Sep 11, 2009 4:16 pm

Can you produce yet? If the answer to that question is no... stop worrying about it and go prospect.. If the answer is yes and you have completed the 500 days and are at $25Mil.. then go for it.

Sep 11, 2009 4:25 pm

When you start the CFA, the CFA Institute sends you postcards that you are supposed to send to your friends and family, which explains why you won't be talking to them for three to five years.











Sep 11, 2009 7:20 pm

Every hour spent studying puts you an hour closer to failing out of the business.    CFA/CFP/ABC/DEF may all be helpful, but none of them should be pursued until after you survival is assured.  This is absolutely a business in which one must survive before they can thrive.   CFA/CFP/ABC/DEF may increase your chance to thrive, but will absolutely decrease your chance of surviving.

Sep 11, 2009 7:59 pm

Does anyone think it would improve chances of survival if someone came from a related field with the CFP? Do you think it improves your appeal to prospects at all?

Sep 11, 2009 8:17 pm
rcloug01:

Does anyone think it would improve chances of survival if someone came from a related field with the CFP? Do you think it improves your appeal to prospects at all?



What related field are you doing financial planning for 3 years in prior to becoming a Registered Rep that makes you qualified to get your CFP?

Sep 11, 2009 9:40 pm

This is a sales job so those that succeed are the ones who can present solutions and plans to clients and prospects so they entrust you with more of their assets.  The credentials are great, but definately not necessary.  Don't waste your time until you get a book built.  I have been in the business for over 15 years and I am just now getting ready for test 5 of the CFP.  I truly believe in getting the certification, but also think that it will only take me to another level in a conversation.  The vast majority of prospects and clients could really care less what certification I have.  They look in your eye and make a decision on whether you are truly helping them accomplish what they are trying to do.

 
Bottom line focus on building a book and developing relationships.
Sep 12, 2009 7:47 am

Unless your planning on becoming an analyst, why bother with the CFA? I was once on the analyst career path and took to the first two CFA exams. I admit, I learned a lot, but that designation won't do you much good for your business. The time spent studying for that exam is better spent on marketing or prospecting efforts.

Sep 12, 2009 11:35 am

I disagree. I think the CFA makes you a better investment advisor. The CFP makes you a better planner. ABC's make you a better linguist, and DEF's make you a better communicator.



That said, it doesn't mean D!CK if you don't produce.

Sep 12, 2009 12:43 pm
Moraen:

I disagree. I think the CFA makes you a better investment advisor. The CFP makes you a better planner....



I agree.

Most of the brokers I know got their CFP after a few years in the business, once they had an established book to bring in production. I understand it has a nice curriculum that isn't insanely difficult after you've spent few years in the business.

However, the CFA is tough... no f%$&ing around. Only something like 33% pass the first exam. Take the CFA if you want to be more of a money manager or a portfolio manager for your clients, not a planner.

Sep 12, 2009 7:10 pm

Salaried job, retirement planning mostly. Some incentives but only 25% of total comp. No prospecting was required. I have the experience and knowledge just never had to prospect before. I have had my 6,63 & 65 since 2001, 2001 & 2003 respectively. I found out today I passed the CFP exam in July. Started with Merrill last Friday so I will learn soon enough if it helps.

Sep 12, 2009 8:37 pm

If you think that it will help, it will help.  

Sep 13, 2009 1:36 am
rcloug01:

Salaried job, retirement planning mostly. Some incentives but only 25% of total comp. No prospecting was required. I have the experience and knowledge just never had to prospect before. I have had my 6,63 & 65 since 2001, 2001 & 2003 respectively. I found out today I passed the CFP exam in July. Started with Merrill last Friday so I will learn soon enough if it helps.



Merrill is the reason why I asked. The Financial analyst that I worked for at Merrill recommended the CFP over the CFA. But I think there would be a point in time where I should get both. In the event that I do not have a fin analyst to conduct analysis for me. Both of the FAs that I interned for had MBAs in Finance, former barrons top 1000 advisors, $750mm AUM, and they charged a pretty penny but they were good, risk takers. Were good with numbers but of course, being an expert is not a requirement.

Merrill requires that their reps join a CFP training program upon entry. So I thought it might be good to throw it out there and get some feedback from ya'll.

Thanks, those 9 hours a week of studying would definitely be better set aside for prospecting/doorknocking.

Sep 13, 2009 2:54 am
NumbersGeek:
rcloug01:

Salaried job, retirement planning mostly. Some incentives but only 25% of total comp. No prospecting was required. I have the experience and knowledge just never had to prospect before. I have had my 6,63 & 65 since 2001, 2001 & 2003 respectively. I found out today I passed the CFP exam in July. Started with Merrill last Friday so I will learn soon enough if it helps.



Merrill is the reason why I asked. The Financial analyst that I worked for at Merrill recommended the CFP over the CFA. But I think there would be a point in time where I should get both. In the event that I do not have a fin analyst to conduct analysis for me. Both of the FAs that I interned for had MBAs in Finance, former barrons top 1000 advisors, $750mm AUM, and they charged a pretty penny but they were good, risk takers. Were good with numbers but of course, being an expert is not a requirement.

Merrill requires that their reps join a CFP training program upon entry. So I thought it might be good to throw it out there and get some feedback from ya'll.

Thanks, those 9 hours a week of studying would definitely be better set aside for prospecting/doorknocking.




 I assumed you were either a a extremely new newbie with statements such as "You can sell 5 policies in 2 days." Ahh, it all makes sense now.  Good luck bud. Your in for a RUDE awakening. Forget the CFA, CFP,MBA, etc. because if you don't make it past the next 6 months all your going to be earning is a SOL designation.

Sep 13, 2009 3:23 am

Both designations are appropriate for financial advisors. The issue is the assumed wealth of each clientele -

 
The CFA basically teaches you how to run larger pools of money. A significant portion of the curriculum includes the running of money for individuals. The running of money for people with enough to live off as a perpetuity is very similar to institutions.
 
The CFP teaches you how to analyze and address risks using best practice techniques. It doesn't teach you how to invest money, other than to apply basic modern portfolio techniques to select funds, etfs, subaccounts or SMAs.
 
So, he focus of the CFA, as it applies to what it calls "private wealth management", is against a backdrop of abundance. All of the material assumes that the client is very wealthy and has no particular need for budgeting, insurance products (except as some type of hedging tool) and that trust planning is largely handled by someone else. The use of leverage, borrowing and tax efficiency are the major considerations other than investment selection.
The CFP curriculum, in contrast, assumes a more "mass affluent" clientele, that must make certain compromises to achieve their goals and for whom catastophic risk must be addressed with insurance products, and for whom cost savings are somewhat of a consideration - making the advisor more of a generalist. This is particularly evident in the sections on estate planning - where the assumption is that most of the planning will be handled by the advisor.
In contrast, the CFA materials assume that the client can spend the substantial amounts of money that consulting and education by an attorney would cost. Part of this relates to the commonality of estate planning benefits for executives and the generous benefits packages that top employees in most large firms receive. Most C level employees in a Fortune 100 company will have unlimited use of an attorney for preparing their ep docs, unlimited use of an accountant for tax prep, huge insurance benefits. And all from the most elite firms (PWC, KPMG, etc). There's not much "planning" required because the issue is really how much income can / does the client want to spend, as opposed to "how are we going to pay for this."
Consequently, the CFP is more appropriate for the vast majority of advisors.
Sep 13, 2009 9:06 am

My manager told me if I start the CPA or CFP during my fist four years he would fire me.

 
No I totally understand why. Not to mention NOT ONE PERSON has asked me if I had either.
Sep 13, 2009 10:46 am




 I assumed you were either a a extremely new newbie with statements such as "You can sell 5 policies in 2 days." Ahh, it all makes sense now.  Good luck bud. Your in for a RUDE awakening. Forget the CFA, CFP,MBA, etc. because if you don't make it past the next 6 months all your going to be earning is a SOL designation.



In reference to your previous post, I'll raise you and say for most clients:

Literate Salesman > Illiterate Rube

Sep 13, 2009 11:35 am

Gaddock - your manager is essentially correct. All the designations in the world won't matter if you don't survive. Almost everyone I know who took the CFA exams in they're first few years ended up leaving the business. That being said, all of them ended up doing pretty well.

 
The same isn't true for the CFP - most did survive and it tended to be a value to their business. In fact, the most successful younger advisor that I know built his practice while earning the CFP and CIMA (he already had an MBA from Chicago and had completed the first 2 levels of the CFA when he entered the business.)
 
I think the key issue is whether someone allows the training to distract them from the prospecting they need to do.
 
There is a logic to getting the CFA as a fallback, though. Of the guys that I knew who got their CFA, all of them still work in finance and tend to have high paying jobs (relative to your average FA). The CFA is pretty much money in the bank - I don't know anyone who doesn't make $150k a year or more who has it.
 
The value of designations, education is primarily demonstrated in competitive situations. FAs that have them will tend to make a big deal about them. But, utimately, the vast majority of clients will pick the advisor they like the most.
Sep 13, 2009 11:56 am

I'm working on the CMT. I figure it will help me with my primary mission, making money.

Sep 13, 2009 1:21 pm
franklin21:
NumbersGeek:
rcloug01:

Salaried job, retirement planning mostly. Some incentives but only 25% of total comp. No prospecting was required. I have the experience and knowledge just never had to prospect before. I have had my 6,63 & 65 since 2001, 2001 & 2003 respectively. I found out today I passed the CFP exam in July. Started with Merrill last Friday so I will learn soon enough if it helps.



Merrill is the reason why I asked. The Financial analyst that I worked for at Merrill recommended the CFP over the CFA. But I think there would be a point in time where I should get both. In the event that I do not have a fin analyst to conduct analysis for me. Both of the FAs that I interned for had MBAs in Finance, former barrons top 1000 advisors, $750mm AUM, and they charged a pretty penny but they were good, risk takers. Were good with numbers but of course, being an expert is not a requirement.

Merrill requires that their reps join a CFP training program upon entry. So I thought it might be good to throw it out there and get some feedback from ya'll.

Thanks, those 9 hours a week of studying would definitely be better set aside for prospecting/doorknocking.




 I assumed you were either a a extremely new newbie with statements such as "You can sell 5 policies in 2 days." Ahh, it all makes sense now.  Good luck bud. Your in for a RUDE awakening. Forget the CFA, CFP,MBA, etc. because if you don't make it past the next 6 months all your going to be earning is a SOL designation.



I was just asking about whether I should allocate time aside towards some alphabet soup. An MBA may not help much FA wise. But you do know of the type of market at a good MBA school... don't cha? Average salary of UCLA's MBA grads, about $150k... Are those good clients? Everyone tells me that getting an MBA is just 2.5 years of networking. I think that's why some firms value MBAs who participated in a lot of school functions during their 2-2.5years

I just wanted to know how relevant the CFA/CFP designations were to doing a good job. I'm not interested in losing clients immediately after i land them. IE, Blowing up a book. My boss used to tell me, "You can learn finance from a book, but books will never teach you mathesesszzzessese." Its like hitting two birds with one stone, a professional designation and education. Well atleast it seemed that way.

Thanks San Fran broker. I understand survival is key, which is why i'm living at home instead of where 95% of my natural market is, friends and family. So I'm not too worried about bills and surprise mishaps that cause my bank account to sink. I want to focus on what the client wants instead of solely pushing A shares and annuities onto suckers to make the rent. And why I wanna work for EDJ because of their prospecting methods.