Why the CFP certification is not enough for professional recognition

To be recognised as true professionals, financial planners need the equivalent of a degree qualification. The FPA's Certified Financial Planner designation is not enough, writes Mike Taylor.

If Australian financial planners wish to be viewed as professionals in the same context as doctors and lawyers then it follows that they should embrace the need for a common university degree – perhaps a Bachelor of Financial Planning.

Medical practitioners must possess a Medical Doctorate just as a lawyer must possess a Bachelor of Law.

Holders of these degrees, irrespective of their membership of bodies such as the Australian Medical Association or the Australian Law Society, are recognised as professionals and are entitled to pursue their profession.

The same ought to be the case for financial planners. Having obtained the appropriate degree from a recognised university, a financial planner should be entitled to recognition as a professional irrespective of their affiliation to a particular industry organisation.

Of course, the Australian financial planning industry is very young when compared to the medical and legal professions, and while an increasing number of practitioners hold university degrees, many others hold different industry-based qualifications and often possess vastly more hands-on experience than the average recent university graduate.

Notwithstanding this history, for the Australian financial planning industry to gain the same status as the legal or medical professions it must, ultimately, embrace comparable educational criteria.

When such commonly-agreed criteria are established then designations such as the Financial Planning Association’s (FPA’s) Certified Financial Planner (CFP) designation will be seen in a more appropriate context – as a designation, not a qualification.

While the CFP designation no doubt carries a certain amount of cachet in the minds of many financial planners and their clients, it cannot and should not be taken to convey equivalence with a degree qualification.

What value it holds resides in the education, administrative and professional underpinnings provided by the FPA.

CFP is an internationally recognised designation. The FPA holds the rights to that designation in Australia and it follows that those who desire to be CFPs must also accept that it requires that they not only possess and maintain the necessary educational standards but also remain members of the FPA.

It goes without saying, therefore, that just as numerous accountants maintain their membership of CPA Australia to retain access to the international designation, Certified Public Accountant, many financial planners maintain their membership of the FPA to retain their CFP designation.

It is indisputable that the FPA’s control of the CFP designation has acted to grow and maintain the organisation’s membership.

It is equally indisputable that those who have pursued becoming a CFP have done so with their eyes open and knowing the rules of entry.

Indeed, it is arguable that other organisations might have achieved the same if only they could have delivered something of equal credibility.

However, acceptance of financial planners as true professionals will ultimately spring from acceptance of a common and objective educational standard.