Financial planners appear to have warmed to the idea holding professional designations.
Most planners surveyed this year for Investment Executive’s Planners’ Report Card say that a designation — such as certified financial planner — should become the minimum requirement in the industry. Only a year ago, many planners were cool to the importance of designations, saying they felt they were unnecessary because they were primarily involved in selling product. This year, however, many express surprise at the prospect of practising without a designation.
The change in attitude comes as the Canadian Securities Administrators introduces rules requiring planners to become licensed to provide industry advice. But licences don’t equal designations, and most planners surveyed this year stress the need for a designation.
This year’s Report Card research shows that less than half of those surveyed (39.7%) hold a CFP designation, 25.9% are currently working toward one and 22% neither hold a designation nor are working on one. About 14% hold other designations, including the registered financial planner, granted by the Canadian Association of Financial Planners; the chartered life underwriter, granted by the Canadian Association for Insurance and Financial Advisors; as well as the certified general accountant, chartered financial consultant and chartered financial analyst.
Many in this year’s survey frown upon those who refuse to make the effort to earn designations.
One Ottawa-based CFP doesn’t aim his criticism directly at planners who don’t hold designations. “I’m not bothered so much by them as I’m bothered by the bureaucracy,” he says. “The public should be a aware of a planner’s education level. There should be a minimum standard and that standard should be the CFP.”
Others say initials behind a name do not guarantee quality financial advice. “Half the CFPs out there are dumber than a stool. I wouldn’t have them flip a burger for me,” a Toronto planner says.
A planner in British Columbia says he’s more concerned about the confusion created by the direction of where things are going in the industry. He says there is too much haggling between main players, and nobody seems to know what’s going on.
Another planner in Vancouver agrees, adding there are too many regulatory bodies.
Creating a uniform standard is the goal of the CSA, which is introducing rules requiring Canadian advisors to be licensed by their appropriate provincial bodies. To obtain this licence and use a generic title, planners will have to pass the CSA financial planning proficiency exam, gain two years of industry experience and commit to a continuing education program.
Julia Dublin, chair of the CSA financial planning committee, says the objective is do away with a variety of designations that leave individuals forced to choose among competing designations.
“We want to set a common exam, a common threshold that indicates the people who passed the exam are competent to provide that kind of advice,” she says.
Some firms require their planners to earn designations. “We have a standard that our advisors have to be qualified,” says Kris Astaphan, executive vice president of Berkshire Investment Group Inc., based in Burlington, Ont. The company expects at least one designation, usually the CFP or the personal financial planner.
If these requirements are not met, planners receive less compensation and risk being told to work elsewhere. “This is a profession and people must understand that,” Astaphan says.
At Toronto-based Equion Group Ltd., planners with designations are favoured when it comes to hiring. Planners who are taken on without a designation are given four years to earn one. The PFP is required within 30 months of receiving a securities licence.
“We’ve always positioned ourselves as being interested in education and professional development,” says Steve Friday, Equion’s vice president, sales and marketing.