While most Certified Financial Planning professionals still respect the spirit and intent of the CFP designation, many believe it is losing its appeal and value in light of recent scandals involving the CFP Board, the certifying and standards-setting organization for Certified Financial Planners.
WealthManagement.com surveyed 321 CFP holders and found that one-third believe the recent scandals detract from the perceived value of the designation. Fifty-four percent said they don’t trust the advisor compensation disclosures on the CFP’s website.
“I understand what the CFP Board is trying to do, but the recent issues are disappointing,” said
Kevin Keller’s salary from
According to the results of the WealthManagement.com survey, some existing members are questioning whether the designation is still worth the cost.
“For wealth managers, like myself, it appears their actions have had the unintended consequence of having current members reevaluate whether continued membership is a useful tool in a financial planners tool box,” wrote
“One question that I can’t answer—and I’ve told lots of people I can’t answer—is why I still have the CFP designation,” said
The WealthManagement.com online survey went out to a random sampling of 40,000 CFP holders across all advisor channels in early April, yielding 321 total responses. (See chart.)
Among the results: Seven out of ten advisors have not changed their opinion of the CFP, while three percent have a higher opinion and 26 percent have a lower opinion. (The CFP Board disputes the survey’s methodology. A
“To a certain extent, we're all in this together,” wrote
“I’m just disgusted at what has been going on,” Fox said. “‘If you don’t have a CFP, you can’t succeed in the business,’ is basically the type of message being put out there.
“I think the scandals will definitely hurt them, at least over the short term. If they take measures to correct certain ways that they’ll handling situations, then I think they can recover from that.”
Some advisors take issue with the CFP Board’s lack of action on the issues, especially on compensation disclosure.
“The CFP Board continues to insist that all is well and everything is OK and the compensation disclosure rules are clear,” said
CFP Board Chair
“It’s like finding everybody on the planet guilty of murder cause you could kill someone tomorrow; that doesn’t actually make you a murderer,” Kitces said. “The fact that you work at a firm with another person that happens to get paid commissions is not proof that you’re getting paid commissions.”
“I think the CFP Board improperly approached the subject of compensation and failed to produce information for clients which was meaningful,” wrote
“The CFP Board is the standard-setting body for the profession, so the onus really falls squarely on their shoulders to have a clear and concise definitions when it comes to compensation,” said
I’m Actually a DJ
One gripe among some advisors is the CFP’s television ad campaign, in which a DJ fools a number of clients into believing he’s a financial advisor. “If they’re not a CFP pro, you just don’t know,” the commercial says. “Find a Certified Financial Planner who’s thoroughly vetted at LetsMakeaPlan.org.”
About 37 percent of CFPs believe the recent television campaign will help their business, while 27 percent don’t feel it will help. Thirty-six percent said they weren’t sure.
CFP Tim Welsh, president and CEO of Nexus Strategy, said his yearly fees doubled to help pay for the
“Despite the fact that they’re running commercials with DJs on Sunday golf hour, people aren’t going there to find a financial advisor,” Welsh said.
Some advisors had their own views on how to fix the problems.
“If they get ahead of the curve and start asking for feedback earlier in the processes, they have a better chance of not rolling something out that gets everyone uptight,” suggests advisor
“For example, we have regularly scheduled certificant connections, which are town hall-type listening sessions where our CEO and board leaders go around the country and listen to CFP professionals and their opinions on things.”
Advisors need to get more involved, Kitces said. “As long as we don’t have a clear alternative to stake as the future of the financial planning profession, the solution is not to throw your hands up in the air and say, ‘I’m dumping my CFP designation.’ The solution is to get active and make your voice heard to the board of directors.”
Speaking after a panel at a recent SIFMA conference in
-additional reporting by
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