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Importance of CFP, other designations

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Feb 5, 2007 8:42 pm

Thanks for clarifying that for me I just Googled it also, so now I am caught up. 

Feb 5, 2007 8:43 pm

[quote=anonymous]

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.

[/quote]



IMHO you get the CFP to earn the right to talk about financial planning with clients. If you are getting  it just to plaster some fancy letters after your name, you are missing the whole point of personal development.
Feb 5, 2007 8:50 pm

[quote=BondGuy][quote=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!

-More power.

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?

- In this context, if you don't validate this aspect of formal professional educating, nothing.

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.

-we should strive to see both at the same time. All CFP are not ethical. Unethical CFPs can have their license revoked. This is precisely why more broker dealer affiliates should obtain and maintain the license. Affirming the vision of an ethical and respected profession instead of breaking down into legalistic arguments.

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

-we,ll see.

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.

-don't take it personally. I said, I bet you would say it was not worth the effort. Maybe you are being a little defensive here.

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?

-maybe not for you. That's fine. There is a difference between required and optional. The big picture here is about whether we broker dealer affiliates even get to call ourselves CFPs. I don't think you can be totally objective here, either, if you don't hold the license.

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.

Thats pure logic. Having a college degree does not detract, experience comes. The college degree might be correlated with lower medical costs, lower costs of training, or some other variable. Highest common denominator.

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

- I respect you.

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?

- Apparently, the battleground where the Merrill Lynch rule principles are being fought is an important battleground. Like you say, if you have a vested interest, it gets your attention. Thanks for your honesty.

[/quote] [/quote]
Feb 5, 2007 8:51 pm

[quote=AllREIT] [quote=joedabrkr] [quote=AllREIT]
The "merrill lynch rule" is the RIA's sardine key.
[/quote]

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".
[/quote]

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 keep bringing up the A-share thing. Yet you call yourself AllREIT. Something doesn't add up here? So, is that AllREIT Allthetime?

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.

And you ask probing questions why? To figure out which REIT best suits their needs? Or yours?

Sorry Bud, but for someone on the high horse against a segment of our profession your screen name doesn't say much for you.




[/quote]

Feb 5, 2007 8:54 pm

, I would bet that you would not come back and say, it was not worth the effort and time investment,

Feb 5, 2007 9:00 pm

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.

If I am an RIA I "break out the sardine key", (at least, the way I understand where this is going) am I being an ethical planner or an unethical salesman?

Feb 5, 2007 9:06 pm

[quote=BondGuy]

[quote=AllREIT] [quote=joedabrkr] [quote=AllREIT]
The “merrill lynch rule” is the RIA’s sardine key.
[/quote]

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”.
[/quote]

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 keep bringing up the A-share thing. Yet you call yourself AllREIT. Something doesn't add up here? So, is that AllREIT Allthetime?
[/quote]

Bondguy You are grasping at straws.

I'm AllREIT because back when I starting out, I ate very little but sardine's so as to save money for my REIT portfolio, the income from that portfolio ment I could build my book the right way. If I had to do it over again, I would have spent more on breath mints.

Showing your personal brokerage statement, really builds trust. "I  own it myself."

As for REIT's, most of my accounts are in a DFA type portfolio built with ETF's. I include some REITs to goose up the fixed income portion of the portfolio.

[quote]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.

And you ask probing questions why? To figure out which REIT best suits their needs? Or yours?

Sorry Bud, but for someone on the high horse against a segment of our profession your screen name doesn't say much for you.[/quote]


As an RIA, how could any investment "suit my needs"? I don't get paid to sell investments.

All I have to do to to wedge a client from a B/D is find out if they have the littlest crumb of discontent, and then you start working on that.

Revealing to people how the B/D system works and merrill lynch rule can get clients to positivly hate their stockbroker. They feel lied to and deceived.

After all, if you are a financial advisor why don't you offer advisory accounts?
Feb 5, 2007 9:11 pm

[quote=planrcoach]

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.

If I am an RIA I "break out the sardine key", (at least, the way I understand where this is going) am I being an ethical planner or an unethical salesman?[/quote]

I think of it like "Operation Rescue"

More seriously, the ball is in the clients court. I don't promise anything I can't do or won't do.

When you lay out the plain facts of how B/D's work vs how RIA's work, you will find most clients close themselves.
Feb 5, 2007 9:23 pm

I think of it like "Operation Rescue"

More seriously, the ball is in the clients court. I don't promise anything I can't do or won't do.

When you lay out the plain facts of how B/D's work vs how RIA's work, you will find most clients close themselves.

Hmmm...

All I have to do to to wedge a client from a B/D is find out if they have the littlest crumb of discontent, and then you start working on that.

Revealing to people how the B/D system works and merrill lynch rule can get clients to positivly hate their stockbroker. They feel lied to and deceived.

After all, if you are a financial advisor why don't you offer advisory accounts?

Sounds like you might be selling something.

Not sure if this applies here, but remember Joe Conrad:

"...no man ever understands quite his own artful dodges to escape from the grim shadow of self-knowledge."

If we were to pursue this line, I'm sure I could think of a lot of questions for you that relate to ethics.

Feb 5, 2007 9:37 pm

All I have to do to to wedge a client from a B/D is find out if they have the littlest crumb of discontent, and then you start working on that.

Revealing to people how the B/D system works and merrill lynch rule can get clients to positivly hate their stockbroker. They feel lied to and deceived.

After all, if you are a financial advisor why don't you offer advisory accounts.

Take it up a level. Dems' fightin' words.   Having done my research and being a CFP, RIA is a okay, so is broker dealer. The reason I mention CFP is because of the debate about whether broker affiliates are less holy than thou.

Whether you are CFP or not, the moral authority of various self-serving platforms in industry is being obfuscated.

I challenge you to a dual.

Feb 5, 2007 9:39 pm

[quote=planrcoach]

If we were to pursue this line, I’m sure I could think of a lot of questions for you that relate to ethics

[/quote]

Such as? And be careful about stones and glass houses. Any sales activity with customers who know less than you do has ethical implications.

However, some business models have more ethical wiggle room and possibilities for misrepresentation than others.
Feb 5, 2007 10:03 pm

[quote=AllREIT]
As an RIA, how could any investment "suit my needs"? I don't get paid to sell investments.  [/quote]

You sell investment advice (as are many of the brokers you're inaccuaretly describing with your "A share" stories, depending on the account type) and as such, you have conflicts of interest with your clients, whether you care to admit them or not.

[quote=AllREIT]
After all, if you are a financial advisor why don't you offer advisory accounts?
[/quote]

Who says he doesn't? I'm at a wirehouse and I do.

Feb 5, 2007 10:07 pm

[quote=AllREIT] 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.


[/quote]

That's marketing nonsense from someone who's deluded enough to think he has no conflicts with his own clients. The day you send them away with a book, telling them they don't need you, they can balance DFA portfolios themselves, I'll believe your "no conflicts" story.

BTW, RR's have the legal obligation to disclose all conflicts of interest, do you? When did you last tella client to take money out of the accounts you manage so they can pay off high interest loans? When did you last tell them to shop other RIAs to see if their portfolios were better suited to them or had better performance?

Feb 5, 2007 10:10 pm

[quote=AllREIT] 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.
[/quote]

I'm a CFP and I'd like to see better supervision of the mom and pop RIAs that seem to have a problem with regularly converting client fund to their own uses, or the CFPs who make dishonest claims to clients and prospects about one business channel having a moral advantage over others....

Feb 5, 2007 10:16 pm

[quote=mikebutler222]

[quote=AllREIT]
As an RIA, how could any investment “suit my needs”? I don’t get paid to sell investments.  [/quote]

You sell investment advice (as are many of the brokers you're inaccuaretly describing with your "A share" stories, depending on the account type) and as such, you have conflicts of interest with your clients, whether you care to admit them or not.[/quote]

Except that I'm openly selling investment advice, rather than selling securities and implying I that sell investment advice. It's a big difference and it is one that clients notice.

Given that I charge for advice (via hourly fee's) or custody (which hourly fee's are prorated against) It's pretty clear to clients that I'm compensated on advice mostly.

About half my clients don't do custody, since they prefer to do trading themselves.

Feb 5, 2007 10:19 pm

[quote=planrcoach]

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.

If I am an RIA I "break out the sardine key", (at least, the way I understand where this is going) am I being an ethical planner or an unethical salesman?

[/quote]

Clearly you're being a salesman, and the worst sort. The sort that claims you have a monopoly on integrity....<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Feb 5, 2007 10:25 pm

[quote=AllREIT] Except that I'm openly selling investment advice, rather than selling securities and implying I that sell investment advice. It's a big difference and it is one that clients notice.
[/quote]

First off, it sounds as those you're lying to prospects about the guy they deal with at XYZ. He could be acting as either a RR OR and RIA.

<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

Secondly, unless or until to send your clients out to other shops that outperform you, or provide services cheaper than you, or send them to a library to learn the process for managing the simply DFA fund portfolios you run, you’re a salesman, and of the worst sort.

Feb 5, 2007 10:25 pm

[quote=mikebutler222]

That's marketing nonsense from someone who's deluded enough to think he has no conflicts with his own clients. The day you send them away with a book, telling them they don't need you, they can balance DFA portfolios themselves, I'll believe your "no conflicts" story.

[/quote]

I explain to people what I do, how I do it, why it works, and so forth. Again that's where service is the difference. Alot of people don't want to fuss with money, and they are ok with paying for money management.

People who can manage money themselves aren't my clients.

[quote]

BTW, RR's have the legal obligation to disclose all conflicts of interest, do you? When did you last tella client to take money out of the accounts you manage so they can pay off high interest loans? When did you last tell them to shop other RIAs to see if their portfolios were better suited to them or had better performance?

[/quote]

You don't know what ADV-forms are, do you? Strictly too much Kool-aid.

I've told people to pay off mortgages and the like, may times. However it is rare for people with substantial accounts to have large amounts of high interest loans outstanding. So this isn't an issue. Given that I prorate custody fee's against advisory services, I'm pretty much agnostic as to what people do with thier money.
Feb 5, 2007 10:27 pm

[quote=mikebutler222]

Clearly you’re being a salesman, and the worst sort. The sort that claims you have a monopoly on integrity…<o:p></o:p>

[/quote]

No monopoly, just more than merrill lynch.
Feb 5, 2007 10:39 pm

[quote=AllREIT] [quote=mikebutler222]

That's marketing nonsense from someone who's deluded enough to think he has no conflicts with his own clients. The day you send them away with a book, telling them they don't need you, they can balance DFA portfolios themselves, I'll believe your "no conflicts" story.

[/quote]

I explain to people what I do, how I do it, why it works, and so forth. Again that's where service is the difference. Alot of people don't want to fuss with money, and they are ok with paying for money management.

How often do you send them elsewhere for better perfomance or lower fees? I know you haven't been in the business long, but you should have had that opportunity by now.

People who can manage money themselves aren't my clients.

If you're the integrity master, that's not good enough. You should be "selling" them on saving the fees they pay you.

[quote]

BTW, RR's have the legal obligation to disclose all conflicts of interest, do you? When did you last tella client to take money out of the accounts you manage so they can pay off high interest loans? When did you last tell them to shop other RIAs to see if their portfolios were better suited to them or had better performance?

[/quote]

You don't know what ADV-forms are, do you? Strictly too much Kool-aid.

Of course I do know what ADV forms are, we distribute them to everyone who hires us in a advisor capacity (and that's another thing you shouldn't lie to people about). ADVs don't tell people to look for better performance or lower fees. I'm willing to bet your ADVs don't mention to clients that the ONLY advise you can provide them is your own and that you're in no position to objectively review advisors or their track records, and that they'd need to fire you to get that objective overview.

I've told people to pay off mortgages and the like, may times.

Sure you have.....

However it is rare for people with substantial accounts to have large amounts of high interest loans outstanding. So this isn't an issue.

ANY debt at ANY rate, or better investment returns or lower fees elsewhere. If you're not doing that your claims to a higher moral ground are nothing but a dishonest sales tool.

Given that I prorate custody fee's against advisory services, I'm pretty much agnostic as to what people do with thier money.
[/quote]

Why do you even charge custody fees? That's obviously a conflict of interest. If you're going to apply for sainthood the only route is hourly rates on financial planning fees. Selling advice gives you no moral advantage over the tens of thousands of other people in this industry who have the option of acting as an advisor OR an RR based on which is better for the client. In fact, being able to sell ONLY your investment advice and no one else's places you at an ethical disadvantage from where I sit.