CFP Experience Question

[DHK]

Yep - "There's a sucker is born every minute!"

At least mine were paid for by my employer via educational reimbursement.

 

[briko3]

why in the world would anyone want to get a CFP?

I learned a lot getting mine. It has definitely created sales for me that I wouldn't have recognized otherwise. That being said, that's because of the increase i knowledge, NOT because clients care at all about the letters.

 

[Tahoe Ray]

I learned a lot getting mine. It has definitely created sales for me that I wouldn't have recognized otherwise. That being said, that's because of the increase i knowledge, NOT because clients care at all about the letters.

I completely agree. It helps you become more well rounded (as does something like the ChFC) and find opportunity. No one is going to come to you because of your designations but then again, they're not likely to hurt your marketing efforts either.

If you can learn something in the process of getting an accreditation, all the better.

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Yep, and that reason is ... to make money for the companies offering those designations.

Of all designations, I happen to find the CFP one of the most misleading because typically when someone is "certified," they have been so certified by a regulatory agency, i.e., a Certified Public Accountant. By contrast, the CFP Board is a 100% private organization that exist solely to make money for its Board members. The only "license" it issues is a license to use the CFP trademark(s), while the CPA actually has a license to conduct the business of public accounting. The CFP Board has absolutely no regulatory authority whatsoever, other than what authority its members voluntary offer to let it have. To boot, the inconsistencies coming from that Board are nothing short of astounding. It is painfully obvious that they are striving to be accepted as a true regulatory authority, which of course, never will happen.

And yet, in many states, having a CFP is a waiver for a 65/66...you also have to report a violation/reprimand/suspension on many appointment forms and license applications.

They are closer than you think.

 

[Bishop Don Shizzle]

Yep, and that reason is ... to make money for the companies offering those designations. Of all designations, I happen to find the CFP one of the most misleading because typically when someone is "certified," they have been so certified by a regulatory agency, i.e., a Certified Public Accountant. By contrast, the CFP Board is a 100% private organization that exist solely to make money for its Board members. The only "license" it issues is a license to use the CFP trademark(s), while the CPA actually has a license to conduct the business of public accounting. The CFP Board has absolutely no regulatory authority whatsoever, other than what authority its members voluntary offer to let it have. To boot, the inconsistencies coming from that Board are nothing short of astounding. It is painfully obvious that they are striving to be accepted as a true regulatory authority, which of course, never will happen.

How do you prove to your prospect that your 25 years of experience are simply not one year of experience repeated 25 times. I actually know a guy like that. Been in the game for 25 years, no degree, no certifications. Furthermore, he is always struggling.

 

[DHK]

It's not the letters after your name, or even the years of experience you have.

To show you know what you're doing... is proven by the quality of the questions you ask.

Your friend needs to learn to ask better questions and how to present his ideas in simplified ways... as solutions to his prospects problems.

 

[Bishop Don Shizzle]

I completely agree. It helps you become more well rounded (as does something like the ChFC) and find opportunity. No one is going to come to you because of your designations but then again, they're not likely to hurt your marketing efforts either. If you can learn something in the process of getting an accreditation, all the better. ---------- And yet, in many states, having a CFP is a waiver for a 65/66...you also have to report a violation/reprimand/suspension on many appointment forms and license applications. They are closer than you think.

In addition to what you say, I seriously question somebody who writes off the need or advantages of certifications. At lease recognize that it has its place. I know in the financial industry, if you are an investment banker who does not eventually get your CFA, you will not go anywhere in the industry. In regards to the insurance industry, there is a reason every CEO of an insurance company at a minimum has a CLU. Generally the heads of annuity divisions have a ChFC or even a CFP.

It's not the letters after your name, or even the years of experience you have. To show you know what you're doing... is proven by the quality of the questions you ask. Your friend needs to learn to ask better questions and how to present his ideas in simplified ways... as solutions to his prospects problems.

Well, when somebody is trying to pick out an advisor, those certifications help instill confidence. You can knock them all you want and try to say they are not needed or necessary. But hey...whatever you have to do to convince yourself. Also, I wrote a family that had met with that 25 year agent. They questioned me that I had not been in the industry for 25 years like this Indian dude. I said look...his 25 years experience is 1 year of experience repeated 25 times. He has no degree and no industry certifications. I showed them what I have and I ended up making the sale. Of course the fact that I was not trying to rip them off probably helped. On a side note, I've found that trying to convince somebody to further their education when they never placed value on it is a waste of time. I have also found that those people got into sales because they could not do anything else. Again, just my opinion and experience. Also, for those of you that do not know, the ChFC is for commission based pay and the CFP is for fee based pay.

 

[sman]

I know plenty of people who have a ChFC and are fee only advisors. Conversely, I know several CFP's who have large VA books.

 

[DHK]

In regards to the insurance industry, there is a reason every CEO of an insurance company at a minimum has a CLU. Generally the heads of annuity divisions have a ChFC or even a CFP. Well, when somebody is trying to pick out an advisor, those certifications help instill confidence. You can knock them all you want and try to say they are not needed or necessary. But hey...whatever you have to do to convince yourself. Also, I wrote a family that had met with that 25 year agent. They questioned me that I had not been in the industry for 25 years like this Indian dude. I said look...his 25 years experience is 1 year of experience repeated 25 times. He has no degree and no industry certifications. I showed them what I have and I ended up making the sale. Of course the fact that I was not trying to rip them off probably helped. On a side note, I've found that trying to convince somebody to further their education when they never placed value on it is a waste of time. I have also found that those people got into sales because they could not do anything else. Again, just my opinion and experience. Also, for those of you that do not know, the ChFC is for commission based pay and the CFP is for fee based pay.

1 - Agreed that if the client knows that you have their best interests at heart, they will sense that, and feel that additional trust.

2 - I hold a ChFC designation. However, no matter if you hold no designations, one designation, or even ten designations... if you cannot communicate clearly and succinctly... you won't get the sale.

So, yeah, I'm talking as a graduate, not as someone who hasn't wanted to bother with furthering their education.

When you have to tout your designations, do so... but also realize that if you have to, you're doing so because trust may be lacking. So instead of being a better communicator, you are reverting to "designation superiority". However, I also suggest that the designations need to "back you up"... not be a selling point.

It has been my observation that those who choose to obtain these designations, do so to ensure that they can always have their client's best interests and desire to be the best in their profession.

3 - You are also falling for the CFP brainwashing. If anything, you can say that the CFP is the preferred designation for investment professionals and the ChFC is the preferred designation for insurance professionals.

The American College is trying to change that somewhat. Look at Bob Johnson who is the new president of the college - he holds a PhD, CFA and CAIA designations. I actually contacted him stating that the College could do quite well for itself to introduce a new investment-focused credential to compete with the CIMA designation and he agreed with me. With his background, it shouldn't be too hard to do.

The American College

John Savage (who coincidentally was a CLU and a ChFC) said it best: "Get all the education you can and then keep it to yourself... cause nobody cares."

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BTW, not "every" insurance company CEO has a CLU. Many do, but not all of them.

 

[scagnt83]

I am looking at starting my own RIA this year, so I have been considering a lot of these issues recently.

Hands down, the quickest, cheapest, & easiest way to charge a Fee for financial advice is to get your 65. If you study everyday you could have it within a month. Total costs will be around $400 - $700 depending on what type of study course you choose.

A CFP course & test will take a year minimum. Same with ChFC. CFA will take 2 years minimum. And all of those cost $2k-$5k.

Get your 65, then go get the designations you want.


As far as designations go. It all depends on the situation. I dont agree that clients do not care about designations. Many clients do not, but there are some that do want an agent with a designation, and many more will see some type of value in the designation even if they do not totally know what it is.
When I was a green NYL agent I remember a call in that I was given. But I had to hand it off to an experienced agent because the guy was adamant that he wanted someone with a designation of some type. He was a high earning engineer who saw the value in education... not much I could do 2 years into the biz. At least I split part of the case... lol.

I still dont have any designations and there have been a few times I feel it would have helped. CPAs, Lawyers, Doctors, Engineers; white collar clients who have a "technical specialty" of some type are the kinds who see value in advanced education.

I am currently working on my CRPS (certified retirement plan specialist). The credentials will help at times, and the knowledge will help at times... it will all depend on the situation. (knowledge will help more than letters most of the time, but both can help)
After the CRPS I am thinking about CRPC or ChFC.

Furthering your professional education shows a prospect or client that you take your career seriously and are in it for the long haul. A CPA once told me that.


Will a designation make or break your career? No.
Will it enhance your knowledge and help you serve clients better? Yes.
Will it help to show prospects/clients that you are dedicated, serious, & actively trying to better yourself in your career? Yes.


CFP is by far the preferred designation for the generalist type of Financial Planner/broker/asset manager/retirement planner/etc. who is in the field working with clients.

CFA is by far the preferred designation of institutional level asset managers/portfolio managers.

ChFC as we all know is preferred among life/annuity agents. However it covers most of what the CFP covers, plus it gives extra education on insurance and business planning. This is why the states group it with the CFP & CFA.

Honestly the biggest difference between the CFP & ChFC is that a CFP is required to have a bachelors degree and the exam is a board certified exam. Those are the 2 main reasons the CFP is often considered superior to the ChFC. The CFP is bigger than just the American College and would continue on without them. Same cant be said for ChFC.

People can say what they want to about the CFP & ChFC, but most all states regard them as an appropriate substitute for the Series 65 license. And they certainly cover more material and give a greater level of education than the 65 does.

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Of all designations, I happen to find the CFP one of the most misleading because typically when someone is "certified," they have been so certified by a regulatory agency, i.e., a Certified Public Accountant. By contrast, the CFP Board is a 100% private organization that exist solely to make money for its Board members. The only "license" it issues is a license to use the CFP trademark(s), while the CPA actually has a license to conduct the business of public accounting. The CFP Board has absolutely no regulatory authority whatsoever, other than what authority its members voluntary offer to let it have. To boot, the inconsistencies coming from that Board are nothing short of astounding. It is painfully obvious that they are striving to be accepted as a true regulatory authority, which of course, never will happen.

This is totally incorrect. You do not understand what a CPA is or what a CFP is...

The CPA credential is nothing more than a professional certification created by a private organization.

The CFP is the same thing. The CFP IS classified as a "certification" because it is a Board CERTIFIED exam regulated by an independent self governing board of industry professionals.

The AICPA (American Institute of CPAs) is a private member run association that has no state or federal oversight. (they participate in state licensing oversight in certain states... but so do engineering/architectural/legal board run self governing industry organizations)

To be an accountant, you must have a degree, then you must register with your state's Board of Accountancy Licenses. THIS is the governmental regulatory authority for accountants.

Then, once you have been an accountant for at least 1 year, you may take the CPA exam.

If you become a CPA you are agreeing to hold yourself accountable (in addition to existing state regulations) to the AICPA Board's business standards that they have set.

Same with the CFP. You are licensed on the state level. But becoming a CFP holds you to a higher standard than normal state licensing. (that higher standard being the CFP Board)

Neither the AICPA or the CFP Board have any true state or federal regulatory authority. They can issue reprimands or fines, but only on a board level. The most they can do is take away your Certification. In some states they could report you to the state for an ethics violation depending on state laws. (CFP Board could do the same thing)


So the CFP is actually almost exactly like the CPA designation.

The main difference is that the CPA designation has been around a lot longer. They also have created a HUGE amount of political influence at the state level. The AICPA has state and local chapters and is a pretty active organization within local government. The CFP Board has yet to become active on a state level like the AICPA.... but I think it is just a matter of time unless other organizations can beat them to the punch.

But the CFP was basically designed to be just like a CPA certification... or other Board Certified certifications such as PE (professional engineer).

(CFA is a board certified exam too, which is one reason why it is highly regarded among asset managers)

 

[junkman]

One of my favorite stories is a friend of mine being introduced as having CLU, ChFC, CFP, CFA and LDDBFD. The person introducing was familiar with all but the last designation. My friend clarified as La Di Da... and went on with his presentation.

He may not have thought designations were the end all but he had them and was good at what he did.