Importance of CFP, other designations

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Feb 4, 2007 4:06 pm

Hello everyone, I am new to this business and I am just studying for my series 7 and 66 after being hired by SB.  I know this is getting a little ahead of myself, but it was discussed with my BM about potentially getting my CFP.  I am definitely interested in obtaining professional designations that will separte myself from the competition.  For those of you who have your CFPs, what change in results, new clients have you noticed since obtaining your CFP?  What other designations are valuable to have to succeed in this business?

Feb 4, 2007 5:07 pm

For those of you who have your CFPs, what change in results, new clients have you noticed since obtaining your CFP? 


The CFP is the premier professional designation of this industry. That is, if you are a CFP. Plenty of arguements can be made for the other designations - insurance, investment, otherwise. Personally, I just decided to obtain and hold this one license and forget about all the others.


As you pointed out, obtaining the CFP is something you do while you learn the business, and in the the case of your joining a broker dealer training organization, trying to build a "book" and surivive.


Setting yourself apart from the competition is a good idea - for any business. Since the products we offer are commodities, what we have to offer as professionals are things like: specialized knowledge, technical service, the benefit of experience from working with many clients over time, and other obvious benefits.


The CFP is important on a couple of levels. First, it draws a frame and formally defines the body of knowledge, experience and ethics that define the financial planning and investment advisory and insurance advisory professions. As you know, you have to have industry experience to get it.


Next, it helps define you as a planner. If you have traveled to the formal intellectual boundries of the kingdom, you are qualified to report to the emporer. You don't have to get a CFP to do that. But especially for the way some of us think, we are better planners for having made the group excursion to the hinterlands.


It can help give you confidence, and it provides a formal structure upon which to attract and attach the learnings and experience you will aquire by doing. The continuing education requirement will force you to read industry journals or attend group training which will continue to build the intellectual framework.


As far as marketing, in the context of building a practice while affiliated with a training broker dealer, this has been the least important benefit. It is hard to know how much business has found me over the past decade. Having a CFP in my mind helps me to position myself as a professional - I did not chase new clients after the first few years, only working by referral.


You probably want to wait a year or two before jumping in to the CFP studies, since you have so much to learn and do, when you first start, managing all of the critical activities for survival is like trying to drink from a fire hose.


But it is kind of like going to college right after high school - not a bad idea to get this taken care of and apply the benefits of formal education as soon as possible. Don't get busy with your life and forget to invest in yourself.

Feb 4, 2007 5:33 pm

Great post planr.

I do not have my CFP but am in the process of obtaining it.  I will note that usually those who post saying that the designation is not needed, does not help with credibility or raising incremental business are usually those who do not have it.

I do NOT believe that it is a magic bullet and people will line up outside my door every Monday morning because I have the magic initials behind my name.  But, I think it will help with credibility not only with clients but also with other professionals such as lawyers and CPA's.  I also think it will help in competitive situations.

Feb 4, 2007 6:39 pm
mooose:

I am definitely interested in obtaining professional
designations that will separte myself from the competition.  For
those of you who have your CFPs, what change in results, new clients
have you noticed since obtaining your CFP?  What other
designations are valuable to have to succeed in this business?





The only designation with some real oomph to it is being a CFA/CIMA charterholder. The CPA/PFS combo is also prestegious.



Everything else is mostly a marketing ploy, which is obtained for the reason of "separt[ing] myself from the competition".



IMHO when the CFP decides to make a fiduciary duty to clients part of
the CFP Canon's of professional ethics, alot of RR's are going to drop
the designation.



A fair number of CFP's want to boot the RR's out of the CFP family
since they don't want the shenanagans of the A-share pusher's
contaminating the designation.

Feb 4, 2007 8:39 pm

I do not have my CFP but am in the process of obtaining it.


Enjoy the ride, Joe.


IMHO when the CFP decides to make a fiduciary duty to clients part of the CFP Canon's of professional ethics, alot of RR's are going to drop the designation.


Imho, this is unlikely.

A fair number of CFP's want to boot the RR's out of the CFP family since they don't want the shenanagans of the A-share pusher's contaminating the designation.


There are a ton of us who will fight tooth and nail. Those who would try to make a virtue out of eliminating the A share option don't deserve to be CFPs. The fiduciary arguement is a subset of the idea of having a professional license to represent a body of knowledge.


I choose to affiliate with a broker dealer that franchises a significant number of CFP licensees. On this particular issue, it would give me great satisfaction to see them lobby on our behalf.


Everything else is mostly a marketing ploy, which is obtained for the reason of "separt[ing] myself from the competition".


No reason to be cynical. This profession can use all of the internal improvement it can get.

Feb 5, 2007 12:19 am
planrcoach:

I do not have my CFP but am in the process of obtaining it.


Enjoy the ride, Joe.


IMHO when the CFP decides to make a fiduciary duty to
clients part of the CFP Canon's of professional ethics, alot of RR's
are going to drop the designation.

Imho, this is unlikely.


Which is unlikely? Adding the fiduciary duty to the Cannon's or RR's
droping the CFP because they can't serve two masters; the client and
the B/D?



A fair number of CFP's want to boot the RR's
out of the CFP family since they don't want the shenanagans of the
A-share pusher's contaminating the designation.

There are a ton of us who will fight tooth and nail. Those who would
try to make a virtue out of eliminating the A share option don't
deserve to be CFPs. The fiduciary arguement is a subset of the idea of having a professional license to represent a body of knowledge.


Just like every other professional designation, for example M.D, CPA, DDM, JD etc. etc.


Alot of people, myself included don't think A-share pushers deserve to be CFP's. Being a CFP should mean that good financial advice is at the core of what you do, not "purely incidental".


=====

[quote]I choose to affiliate with a broker dealer that franchises a
significant number of CFP licensees. On this particular issue, it would
give me great satisfaction to see them lobby on our behalf.[/quote]

Which AMP and the rest of the B/D's are doing right now using
the argument "Requiring our CFP designates to act in the best interests
of clients would harm our business model."


It's a stupid argument and the CFP board is having alot of fun dealing with the angry grassroots.


http://www.cfp.net/aboutus/Exposure_Draft_Comments.asp



[quote]Everything else is mostly a marketing ploy, which is obtained for the reason of "separt[ing] myself from the competition".

No reason to be cynical. This profession can use all of the internal improvement it can get. [/quote]

Acting in the best interests of clients, at all times, under all circumstances, would be a start.

Feb 5, 2007 12:41 am


Acting in the best interests of clients, at all times, under all circumstances, would be a start.


Agreed. I don't claim to represent anyone other than myself. You might say, any broker dealer would be lucky to have me affiliate.


The reason I affiliate with a broker dealer is because I need to be licensed to be able to represent certain financial planning solutions. In fact, I mainly focus on asset management.


Put my practice up to any RIA, and they would likely say, why don't you just move to RIA?


I don't want the personal liability exposure.


Any way, I am ethical. Thanks for the links to the comments. I'd rather focus on encouraging young people and career planners to join this wonderful industry.


If the CFP board wants to kick me out, it would be a major inconvenience, and unfair. Ethics always resides at the individual producer level.

Feb 5, 2007 1:37 am

Alot of people, myself included don't think A-share pushers deserve to be CFP's. Being a CFP should mean that good financial advice is at the core of what you do, not "purely incidental".


I know there has been a lot of discussion about A shares. I guess if people are pushing anything, they might be crossing the line.


Even A shares could be done right for the client. If you don't believe that, I believe you might have crossed some kind of line yourself.


Saying someone does not deserve to be a CFP would come down to an individual case basis.


There is room for all kinds of philosophical discussion. But apparently you are firing the shot that is heard round the world, therefore, the burden is upon you.


What you choose to focus upon may be important - your dream is important to  you.


But from a financial planning standpoint, even this can be debated:


 good financial advice is at the core of what you do, not "purely incidental".


I think I understand what this means. In my experience in this industry, the distance between thinking and doing is important. I can meet with a new client for an hour and run through the formal steps of the financial planning process. It takes them longer to absorb the process - a number of meetings.


And then what? Implementation, then service, then review.


For those who spend some much energy being deconstructionist about "pure" ideas of financial planning, let them market themselves as such.


We work in an industry that is ill-prepared to meet the needs of the boomers, in terms of bringing alone new planners.


Better for you and I to unite and hold the broker dealers accountable. For the matter, hold the RIAs accountable. You mentioned other professionals, attorneys, doctors and so on.


Being self employed, and paying high deductibles, I can assure you that doctors - specialists - are committing highway robbery in terms of fees. How wonderful that the insurance company is holding them "accountable".


As for lawyers, I think I know a few who just sit down and make up invoices out of retainers, when they need to. If RIA is the golden temple of CFPdom, will there be conflicts of interest?


It right and proper to point out the problems, the solutions I am not certain about. But I may be missing some really important considerations here, as I try to focus on microeconomics as it pertains to my planners, clients, and hobbies.


Tell me what I am missing, please.



Feb 5, 2007 5:58 am
planrcoach:

If the CFP board wants to kick me out, it would
be a major inconvenience, and unfair. Ethics always resides at the
individual producer level.





Planr, I'm sorry. I just read what I wrote and I was being too harsh. I'll post up a longer reply later.



I will let you in on a magical RIA secret.



I don't know if you've ever eaten sardines that were packed in the old
style flat can's. The flat top of the can had a little tab, that you
inserted into a "sardine key". Once inserted, you twisted the key to
peel back the top of the can.



The "merrill lynch rule" is the RIA's sardine key.

Feb 5, 2007 8:57 am

I am definitely interested in obtaining professional designations that will separte myself from the competition.


Get the designations for the knowledge, not for the letters after your name.  There is a very real possibility that in a wirehouse setting, you may not be able to use the CFP designation in the future even if you have it.


Regardless, work on your sales skills first because if you can't get clients, you won't be around to use your knowledge.

Feb 5, 2007 9:27 am
AllREIT:





I will let you in on a magical RIA secret.



I don't know if you've ever eaten sardines that were packed in the old
style flat can's. The flat top of the can had a little tab, that you
inserted into a "sardine key". Once inserted, you twisted the key to
peel back the top of the can.



The "merrill lynch rule" is the RIA's sardine key.



Nice analogy.

I am a mere IAR, not my own "RIA".  Yet, for clients who get the distinction, they have been most happy to convert to a fiduciary "platform".

Feb 5, 2007 11:38 am

I'm one of the guys without a CFP who doesn't believe they are necessary. I'm successful without one.


Within this thread you're getting a taste of the controversy surrounding this issue.



I'm paticularly entertained by the A share shenanigans statement. Like charging a fee forever is always the right thing to do! The arrogance of these types of blanket statements never cease to amaze.


As far as your career is concerned, there is nothing wrong with educating yourself. For that reason alone it may be worth getting designations.


As far as seperating yourself from the crowd, designations won't do it. There's an old saying in our business that clients don't care how much you know until they know how much you care. The down and dirty fact is that this is a relationship business. That's where the rubber meets the road. So while the local CFPs are busy telling prospects about the efficient frontier, I'm asking prospects about what's important to them and how can I help them? Less emphasis on technical wall street, more on down home main street.


Will a CFP or other designation help you land clients? No! It sounds good on a resume. But if you repel them with an aloof, cold, fact spewing, demeanor, you not going anywhere in this biz.


This business is first and primarily a sales task. Something that many CFPs will dispute. Those who are most successful are those who are the best at sales. CFP or not.


Feb 5, 2007 12:06 pm

Mr. Joe Smith GED



I think this would be good.

Feb 5, 2007 12:39 pm

The "merrill lynch rule" is the RIA's sardine key.


Good metaphor.


There is a very real possibility that in a wirehouse setting, you may not be able to use the CFP designation in the future even if you have it.


I would bet that you can count on the CFP license staying with registered representatives.


Put it this way, I would not put off getting the license.


So while the local CFPs are busy telling prospects about the efficient frontier, I'm asking prospects about what's important to them and how can I help them?


I'm sure the successful local CFPs are relationship oriented, just the way you are - having your CFP license is not a stigma.


This is a profession, it has philosophical components. In philosophy, there is negation and affirmation. Both are important to define the vision.


The intellectual discussion about the sardine can is important, but it is about opening a stinky can of sardines. To some, this is very important.


It has nothing to do with the importance of drawing a framework around the body of knowledge, experience and ethics that defines our profession.


There is an entire generation of younger "affluent boomers" that need our help, but they don't understand or trust what we do.


If ethics comes down to the individual advisor level, any kind of license that affirms the professional's qualifications is a good thing.


In this business, a big challenge is to keep our eye on the ball. Affirmations are more fun than negations, generally, and as bond guy points out, you have nothing without them in terms of relationship building. Good challenge, bond guy.


On the other hand, I would challenge you to embrace the licensing standard challenge. If you earned the license, I would bet that you would not come back and say, it was not worth the effort and time investment, for a lot of reasons.


Our clients are largely deconstructionist about money, that's why they need our help to put it all together.


It is about time this profession stops eating its young, fouling its own nest, and takes flight to uplift the mass of Americans who need our help to ensure the security and dignity of the generations of those who live the ideal of freedom through economic strength.


Financial ignorance could be our downfall, it has nothing to do with the Merrill Lynch rule, everything to do with affirming the principals and doing the hard work of our profession.


Feb 5, 2007 12:51 pm

Good stuff planr.  Though provoking.

Could you explain what you mean when you say our clients tend to be "deconstructionist with their money"?

Feb 5, 2007 1:26 pm

Thanks, sorry if it sounds like I am lecturing.


Here is the Wikipedia definition for my benefit, not yours as I know you have your idea of the meaning of the term itself, first, to keep me on track:


In contemporary philosophy and social sciences, the term deconstruction denotes a process by which the texts and languages of (particularly) Western philosophy appear to shift and complicate in meaning when read in light of the assumptions they suggest about and absences they reveal within themselves. Jacques Derrida coined the term in the 1960s, and found that he could talk more readily about what deconstruction was not than about what it was, most especially in reply to questions posed by others about it.


 Wow! That just about sums up what the CFP world is doing when it fights about who gets to display the license designation, especially when it concerns those who are now working to be licensed, or those who hold the license at a broker dealer. It is like arguing over religion.


So it holds with our clients. In their minds, they already know the basics of investing, taking portfolio withdrawals and so on. Whatever this means, (we know what it means), they then think too much, worry, panic, listen the AM radio talk show host who has an agenda, and appear to shift and complicate in meaning when read in light of the assumptions they suggest about and absences they reveal within themselves - they do it to themselves, all the way up through "Seven Stages of Money Maturity", emotional maturity type stuff.


We do it too, as advisors. Because we are human. That's why we advisors need to stick together.


Our clients, of course, are smart enough to hire us. Most will validate our competence, though, pretty carefully. In other words, they hire us for our specialization and leadership, and intelligent service, the actual doing, not necessarily our technical knowledge.



Feb 5, 2007 1:59 pm

 Forgive me for being new and uneducated in the Industry, but what is the "merrill lynch rule"???

Feb 5, 2007 3:12 pm
planrcoach:

The "merrill lynch rule" is the RIA's sardine key.


Good metaphor.


There is a very real possibility that in a wirehouse setting, you may not be able to use the CFP designation in the future even if you have it.


I would bet that you can count on the CFP license staying with registered representatives.


Put it this way, I would not put off getting the license.


So while the local CFPs are busy telling prospects about the efficient frontier, I'm asking prospects about what's important to them and how can I help them?


I'm sure the successful local CFPs are relationship oriented, just the way you are - having your CFP license is not a stigma.


The CFPs I compete against are more interested in how the engine operates, than why there needs to be an engine. They are more than happy to lay their knowledge on their prospects. Many times talking down to them in the process. I'll say this, competing against CFPs is good for my business, very good!


This is a profession, it has philosophical components. In philosophy, there is negation and affirmation. Both are important to define the vision.


The intellectual discussion about the sardine can is important, but it is about opening a stinky can of sardines. To some, this is very important.


It has nothing to do with the importance of drawing a framework around the body of knowledge, experience and ethics that defines our profession.


There is an entire generation of younger "affluent boomers" that need our help, but they don't understand or trust what we do.


And this has to do with having a CFP how?


If ethics comes down to the individual advisor level, any kind of license that affirms the professional's qualifications is a good thing.


All ethics are indiviual. What other level matters in a one on one relationship? As for the CFP designation being the gold standard for ethical behavior, that's laughable. They can't possibly police their ranks. This is again evident in my own personal experience. I once worked in a branch with with two CFPs. These two guys are among the biggest theives I've come across in my time in the business. One size fits all VAs with a smattering of penny stocks and ST 3PT Ginnies. But hey, they're CFPs. One also coordinated the CFP regional meetings in our area. CFP ethics, that's a joke. Until The College for Financial Planning can rid their ranks of the likes of 'Planners" like these they aren't the standard for anything. And since they can't ,that will never be. You see the vision, I see the reality.



As for qualifications, a license proves nothing more than you can pass a test. A designation program such as the CFP program is nice, in that it puts all the relevant information in one place and presents it in an organized fashion. Where we are going is far beyond that however. We are headed toward fully degreed programs offered at major universities with a BS in Financial Planning or somthing of that ilk. Our profession is going the same way as Architecture and Law, both, non degreed professions until very late into the 20th century. Do I think that's necessary? No. Inevitable? Yes


In this business, a big challenge is to keep our eye on the ball. Affirmations are more fun than negations, generally, and as bond guy points out, you have nothing without them in terms of relationship building. Good challenge, bond guy.


On the other hand, I would challenge you to embrace the licensing standard challenge. If you earned the license, I would bet that you would not come back and say, it was not worth the effort and time investment, for a lot of reasons.


As soon as I replied to this thread I started counting the minutes until that cheap shot would be taken.


Of course to say that I would put down a course that I'd so heavily invested in would be counterintuative. From an educational point of view, I'm positive that the CFP course is worthwhile. But necessary?


Let answer this way. Many if not most of the 50 something airline pilots flying us across the country do not have college degrees. Nor did they graduate from some military program. Today, most airlines require a four year degree of all new hire pilots. So young guys coming up are "BETTER" educated than the generation ahead of them. My question is this: On that stormy night when a compressor fan takes out all the hydraulics who do want at the controls? The guy who read about what to do in a book, or the old experienced hand who wrote the book or could have? I know who I want.


The CFP D is a tool. If I thought it could add value to what I'm doing, I'd already have it.


Our clients are largely deconstructionist about money, that's why they need our help to put it all together.


It is about time this profession stops eating its young, fouling its own nest, and takes flight to uplift the mass of Americans who need our help to ensure the security and dignity of the generations of those who live the ideal of freedom through economic strength.


Financial ignorance could be our downfall, it has nothing to do with the Merrill Lynch rule, everything to do with affirming the principals and doing the hard work of our profession.


Again, how is this relevant to having a CFP?


Feb 5, 2007 3:36 pm
joedabrkr:
AllREIT:



The "merrill lynch rule" is the RIA's sardine key.



Nice analogy.

I am a mere IAR, not my own "RIA".  Yet, for clients who get the distinction, they have been most happy to convert to a fiduciary "platform".



It is really powerful. See

http://www.tdainstitutional.com/advisoreducation/index.htm

For some idea's on using your sardine key to best effect.

Most people just don't know about how traditional B/D's and RR works. A simple "Is your trusted advisor really a salesman in disguise?" theme works wonders. The traditional A-share model doesn't stand up to scrutiny.

You ask probing questions about if the prospect has ever felt that their broker sold them something. If they say yes, you break out the sardine key and start turning.




Feb 5, 2007 3:40 pm
WADRED:

 Forgive me for being new and uneducated in the Industry, but what is the "merrill lynch rule"???



That the financial advice provided by RR's is "purely incidental" to their core activities of selling securities.

Thus RR's explicitly do not have a fiduciary duty to act in the best interests of clients. However B/D's go to great lengths to claim they they really do act in clients best interests.

RR's are merely registered representatives who act in the firms best interest subject to NASD regulations.