FPA defends CFP's compulsory membership obligation

The Financial Planning Association (FPA) has sent a clear signal that it sees no problem with the Certified Financial Planner (CFP) designation remaining inextricably linked to membership of the organisation.

Amid a heated reaction to claims that some people only maintain their FPA membership to access their CFP designation, the FPA’s deputy chief executive and head of professionalism, Deen Sanders, said the professional obligations attached to the CFP designation ensured its ongoing quality, and also meant it needed to be inextricably linked to membership within a professional body.

Ongoing educational and ethical requirements within the CFP are only attached to FPA membership, which also mean being held up to scrutiny by one’s professional peers, he said.

Sanders also refuted recent suggestions from former FPA board member Rob Pederson that FPA membership was inflated by planners only interested in maintaining their CFP designation.

“We have 11,000 members — the fact that we do speaks for itself. Lots of members value the relationship they have with the FPA. There’s always going to be people questioning the value of membership, and that’s a challenge for any professional association,” he said.

Suggestions that planners grandfathered into the program at its inception were less worthy of maintaining the designation than recently accredited degree qualified planners were uninformed, Sanders said.

“When the program was introduced into Australia 20 years ago we applied the best mechanisms we had available at the time. We absolutely hold that those people are deserving of the right to remain a CFP. They have met continuing education requirements [so] they’ve had to sign up to the highest CPD obligations in the country for a professional financial planner. It’s not only about getting into the CFP but how you maintain that,” he said.

Sanders maintained his call for the industry to adopt an objective, external assessment for the RG 146 accreditation and said that raising the industry’s minimum regulatory requirements would have no effect on the CFP program.

“There’s always going to be a difference between minimum licensing requirements and professional designations,” he said.

“There will always be people who find a way to do the minimum as quickly as they can, and that’s the difference between the licensing level of education and the professional level of education.”

The managing director of Pinnacle Financial Services Academy, John Prowse, who has also called for an external RG 146 assessment, agreed that raising minimum standards had little to do with the CFP program.

What planners were unhappy with was the fact that even once they had done enough training and study to be admitted to the CFP, there was no qualification issued but rather a designation that was lost if planners didn’t maintain their FPA membership and continue to pay fees, Prowse said.

But having planners who were grandfathered into the program without having done the same type of training created uncertainty around consistency, he said. As an international designation, clients wanted to know what level of training a planner had undergone to gain that designation, Prowse said.