The CFP Board of Standards will begin accrediting financial planning programs within firms and create a new Associate Certified Financial Planner designation for entry-level planners.
"When the public sits down for financial planning advice, regardless of the setting, we want to ensure the person has gone through a training program and understands financial planning standards," says a CFP board spokesperson.
But the move hasn't been warmly greeted. At the July ICFP annual conference in Dallas, CFP attendees expressed frustration at not being consulted on the plan. The Associate CFP designation will be "a hoax on the public," said one participant.
Separately, the National Association of Personal Financial Advisors (NAPFA), a fee-only planning group, derided the Associate CFP idea as "CFP-Lite."
The new Associate CFP designation requires only a four-hour exam on 25 topics, versus the full CFP program that involves a 10-hour exam on 106 topics.
The CFP board plans to offer three new accreditation programs to firms (see "New Financial Planning Standards," Page 28). The easiest standard to reach, the Accredited Training Program, is designed to appeal to larger firms that have created their own financial planning training, says the CFP board spokesperson. "Rather than have each firm with their own method of delivery, we want firms toadopt uniform standards of training."
But NAPFA says the accreditation programs for firms will give clients a false sense of security because planners at such firms aren't necessarily competent.
The programs will debut Sept. 1.
* Primary business must be financial planning.
* A CFP licensee must supervise all financial planning services.
* At least 50% of the firm's owners and ownership interest must be CFP licensees.
* All financial planning practitioners at the firm must be CFP licensed.
* All employees involved in the financial planning process must adhere to the CFP Board's Code of Ethics and Professional Responsibility and Practice Standards.
Accredited Training Program:
* Offer the equivalent of a three-semester hour personal financial planning survey course meeting CFP board content guidelines.
* Contain an assessment device.
* Cover the CFP board's ethics code and practice standards.
Accredited Financial Planning Services Program:
* Provide an evaluation of company policies and procedures related to financial planning.
* Undergo an independent compliance audit every three years (details not yet determined).
* Support the CFP board's ethics code and practice standards.
* Have a CFP Board Accredited Training Program.
* Support attainment and retention of the CFP designation by employees.
* Involved in the financial planning process at time of application.
* Complete a CFP Board Accredited Training Program and pass exam.
* Agree to abide by CFP board's ethics code and practice standards.
* Complete 30 hours of continuing education every two years.