Get the CFP mark of approval

Since its launch in 1992, the Certified Financial Planner (CFP) designation has been setting the standard in professional and educational requirements for the financial planning industry.

Since its launch in 1992, the Certified Financial Planner (CFP) designation has been setting the standard in professional and educational requirements for the financial planning industry.

The CFP is having a widespread impact. The designation represents a peak level of expertise and education in Australia and a dozen other countries. It also af-fects the life of most practising members of the Financial Planning Association (FPA).

Indeed, this body is now demanding that every member obtain the mark by July 1, 2003, or have their FPA membership downgraded.

Such moves, no doubt, have financial planners pondering the question: "Which is the best way to get the CFP mark?"

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Michael McKenna, chief executive of the FPA, says there are six pathways to ob-taining the CFP designation and each takes into account the different experi-ences and educational backgrounds from which financial planners and advisers are drawn.

"The FPA believes the pathways set are fair and meet consistent guidelines. No one will be grand-fathered into a CFP designation," McKenna says.

For the industry's younger recruits, the path is simple. They can complete one of two available pre-cursor courses - the Diploma of Financial Planning (DFP) course overseen by the FPA or a graduate course run by the Securities Institute, or they can complete an approved tertiary course or hold certain other higher academic qualifications.

After this, they must complete the CFP Professional Education Program, a four unit course, which usually takes about two years to finish on a part-time basis. It is offered in distance learning mode by the FPA via the University of Western Sydney Hawkesbury only and covers:

- CFP 1 Professionalism, ethics and compliance

- CFP 2 Comprehensive financial planning 1

- CFP 3 Comprehensive financial planning 2

- CFP 4 Practice management

At present 220 people are enrolled in the first semester of the CFP Professional Education Program, and since it was adopted in Australia in 1992, about 2000 practising FPA members, from all backgrounds, have obtained the CFP mark.

"This figure will increase to about 3200, or 85 per cent of current practitioner members by the end of the year after the current crop of graduates from the DFP course complete their studies in November," McKenna says.

"The fact that members are putting so much time and money into this, in large numbers, indicates an awareness of standards needed for professional financial planners," he says, adding that there are about 7500 students are enrolled for the DFP course.

And, according to the Securities Institute's national education manager Tim Sheehy, there are about 800 students enrolled in his organisation's graduate course, which has attracted more than 1000 students a year since 1997.

As outlined below, the paths, however, for those with extensive industry experi-ence and training or those coming from, say, an accounting background are some-what different, depending on the education and experience of the member.

But, to continue to be able to put the CFP behind one's name, the FPA also re-quires all planners to undertake a minimum of 40 hours accredited continuing professional development (CPD) a year after completing the CFP program. And, they also must continue to hold a Proper Authority with a Principal Member.

Graduate of Diploma of Financial Planning (DFP)

The DFP course is run by the FPA through Deakin University in a distance learn-ing mode. It provides a practical understanding of the process and content of financial planning and meets ASIC education requirements for obtaining a dealers licence.

It is taken by practising financial planners part-time over two or three years. Those who began the course before 1993 must complete six modules while those who began in 1993 must complete an eight module course.

Candidates enrolled before or during semester two, 1997, have until July 1, 2003, to complete the diploma and can qualify for CFP without completing the Professional Education Program.

Approved Tertiary Courses

These are:

- Security Institute of Australia (SIA) Graduate Diploma in Financial Planning.

Available to students who have completed a tertiary degree approved by the in-stitute. Because of the course's prerequisites, students usually are working in the industry already and study part-time.

- University of Western Sydney Master of Commerce (Financial Planning)

Offered part-time only and designed for those with tertiary education, industry experience, who are members of relevant professional associations or who have a combination of these.

- Royal Melbourne Institute of Technology Bachelor of Business (Financial Plan-ning)

Aimed at high school graduates and those with non-industry backgrounds. Can be studied on a full-time or part-time basis.

- Curtin University Bachelor of Business (Financial Planning) and Master of Com-merce (Financial Planning).

Aimed at high school graduates and those with non industry backgrounds. Can be studied on a full-time or part-time basis.

The FPA is reviewing other courses for official recognition.

Higher Academic Qualifications

Those who hold a SIA Graduate Diploma in Applied Finance and Investment or a Masters or Doctorate qualification from a tertiary institution are assessed on a case by case basis.

NOTE: Those who hold a DFP or an approved tertiary or higher academic qualifica-tion have to complete the CFP Professional Education Program and have 2-3 years of approved experience, depending on education background, immediately preceding date of CFP application.

Senior Associates

For those who are long standing members of the FPA and the industry with exten-sive experience.

Up until July 1, 2000, the education requirements are the DFP module 8 and the PKE only. After that, the full CFP Professional Education Program must be com-pleted.

Highly Experienced Practitioner Members

For those who have been members of the FPA continuously since September 30, 1993 and who have a minimum of 12 years relevant financial planning experience, as at September 30, 1998.

Also, they must hold a proper authority with a principal member of the FPA or be a natural person FPA Principal Member licensee at the date of application.

The education requirements are identical to those for senior associates and fol-low the same time line for changeover to the full CFP course.

Certified Practicing Accountant and Chartered Accountant

Applicants are only required to sit the PKE and either the DFP8 module or the CFP program bridging module, the Process of Financial Planning (CFP B). After July 1, 2000, they will have to complete the full CFP program.

NOTE: Senior Associate, CPA and CA applicants should have 2-3 years of approved practitioner experience, dependent on education background, immediately before they apply for the CFP.

Disclaimer: This article is intended as a guide only. Those wishing to obtain the CFP designation should first confirm the most appropriate pathway for their circumstances with the FPA.