Holding a professional designation in the financial planning business is in some ways similar to banking your first million dollars: a lot of people talk about it but not many have actually done it.
Planners interviewed by Investment Executive almost unanimously say their firms offer solid insurance, estate-planning and tax-planning services. However, less than 55% of all planners surveyed have a certified financial planner designation. Less than 15% have either attained or are thinking about acquiring a Canadian life underwriter’s designation, and even fewer have or will soon acquire the registered financial planner designation.
The industry has the potential to increase the numbers, but it argues that lack of a designation in no way means a planner can’t do his or her job properly. The industry has also been unable to agree upon a single standard, so regulators have set the bar where it pleases almost everyone. In the meanwhile, some firms are content to let their salespeople practise while completing an internal accreditation program, which is also allowed by regulators.
Greg Gray, president and CEO of Manulife Securities International Ltd. in Kitchener-Waterloo, Ont., explains his firm’s position, which reflects the industry as a whole.
“It’s not a requirement to have a designation [at Manulife]. We recognize that advisors must be trained and educated to compete,” he says. “The marketplace is taking care of that.”
People have different views about the free market’s ability to regulate itself properly, with accounting and financial analysis recently coming under severe scrutiny. Yet industry executives are largely in agreement that they can take care of their own.
“The company doesn’t specifically encourage one designation over another,” says Jeff Dumanski, executive vice president of marketing at PFSL Investment Canada Ltd. in Mississauga, Ont.
Minimum training
Planners at London, Ont.-based Cartier Partners Financial Services are required only to have the minimum training prescribed by provincial regulators. But the company’s CEO, Dan Richards, says that the firm is looking at the middle ground, in which many other firms are positioned. “We are exploring whether we will establish a minimum standard that is higher than the regulatory standards,” Richards says.
There are a few notable exceptions. Three Prairie-based firms — Investors Group Ltd., Assante Financial Management Ltd. and TWC Financial Corp. — actively encourage their advisors to acquire designations, and 70% or more of their planners already hold a CFP.
“We strongly recommend the CFP and that [planners] obtain it within five years,” says Kevin Regan, IG’s senior vice president of marketing and consultant services in Winnipeg, adding that the company’s grid payout system leans a little heavier toward a designation. “We have some financial incentives to encourage them.”
Berkshire Investment Group Inc. tips the payout scale toward education, but this effort has yet to show up in the number of its reps who hold designations. Less than 40% have earned either a CFP or CLU.
Geoffrey Charlton, senior vice president of national sales at Berkshire, says, “Although we’d prefer them to have designations when they join us, we are happy to help appropriate individuals develop professional accreditation.”
Some companies take a different approach to giving their reps an incentive to learn.
Laurentian Financial Services, for example, not only insists that all its reps move as quickly as possible toward the CFP but it will also pay for all of courses upon successful completion, says Stephen Cole, its Toronto-based national sales manager.
As for ongoing training, not surprisingly, most reps are happy with the training their firms are providing or encouraging. It stands to reason that if a planner is starting from the beginning, without a designation, he or she will be impressed with the training the firm offers. The average score in this category across the industry is 6.9.
Exceptions include scores at Money Concepts (Canada) Ltd., Dundee Private Investors Inc., W.H. Stuart & Associates and FundEX Investments Inc. Advisors at those firms awarded scores approaching five points and lower. Some planners at W.H.
Stuart say this may be the single reason they would leave the firm. “[It] tries hard, but it’s poorly trained,” says one Western planner.
PFSL, whose sales force gave the firm a 9.4 out of 10 for ongoing training, illustrates the different emphasis firms place on formal designations vs other training. Fewer than 13% of PFSL’s reps hold a CFP and less than 40% are working on a designation. Yet, for the second consecutive year, the firm’s sales force scored highest in ongoing training — essentially sending a message to management to maintain the effort.