Letters 10/06 – Walking further down the CFP designation pathway

I read with interest Bill O'Sullivan & Debbie Thomson's letter to the editor (Money Management, May 27) and their experience in their dealing with both the FPA and the ASCPA.

I must confess that the Money Management article "Under Siege" did concern me initially. Today I consider it is part of the progression of the financial planning industry.

I am a Certified Financial Planner and have completed all the subjects in the DFP. Since then I have obtained my Master of Commerce with major studies in financial planning. The latter degree, I must admit, is not a necessity but was completed because of my interest in this field. I personally feel a need to research further into various aspects of financial planning for the benefits of my clients and myself. I am a proper Authority Holder with AMP Financial Planning.

I was first admitted as a member of the Australian Society of Accountants in 1972 and I am currently a member of the ASCPA. Prior to joining the financial planning industry, I had my own management consultancy business based in Singapore with clients in South East Asia and Hong Kong. I have been involved in personal financial planning since 1984 and appreciated the real value of financial planning after completing the DFP.

There is a need for associations to ensure that their members are truly proficient in the field of financial planning to ensure a high standard. I feel any relaxation of entry standards will weaken the association. Sullivan and Thomson's suggestion that we should not relax CFP rules for accountant's entry is worthy of consideration.

A possible approach is that candidates for CFP need to have academic qualifications as well as practical experience with a CFP for three years to ensure competency.

This will ensure that a CFP will not only have the theoretical knowledge but the practical experience as well.

The CFP designation will command more respect if competency is ensured rather then a mass production of CFPs.

Peter Loh CFP

Proper Authority Holder

AMP Financial Planning

Bill O'Sullivan and Debbie Thomson in their letter, "Another Chapter Opens on CFP Designation" (Money Management, May 28) raise some issues about the FPA's advanced standing pathway for accountants to Certified Financial Planner (CFP), which require clarification.

The point they make is that although the ASCPA will not recognise Diploma of Financial Planning units as an exemption from the Personal Financial Planning elective unit of the CPA program, the FPA does recognise that CPA designation for advance standing to CFP.

I can't comment on the ASCPA's position, but I can explain the rationale behind the FPA's advanced standing pathway.

The advanced standing pathway was approved by the FPA Board in February 1997 for holders of higher academic qualifications, or the professional designations - CPA and CA. The reason for this was to recognise that there were other professionals working as financial planners, and in applying a policy of Recognition of Prior Learning (RPL), it was not considered necessary for these people to complete all eight units of the DFP course.

However, nobody can attain the CFP designation without demonstrating they meet the required capability standards. These capability standards are tested by requiring people granted advanced standing to successfully complete DFP8 which covers the construction of comprehensive financial plans, and the Practise Knowledge Examination (PKE) which assess knowledge across DFP units 1 - 7.

The board considered CPAs and CAs who meet these requirements combined with experience in financial planning, are acceptable for admission to CFP.

The CFP Board permits the holders of certain degrees and professional credentials (including CPA) exemption from completing approved initial education programs before sitting the CFP certification exam. As with the CFP Board of Standards, the FPA also requires that advance standing candidates have three years approved experience before attaining the CFP designation. The FPA uses the CFP mark under licence from the CFP Board of Standards and is a member of the International CFP Council.

From 1 July 1999, the CFP Professional Education Program will become an additional educational requirement for CFP. However, holders of the CPA and CA designations (who comprise the majority of advanced standing applications) have been given an extension to 1 July 2000 to complete DFP8 and PKE for CFP without the requirement to complete the new CFP Professional Education program. This is consistent with an extension given to certain candidates completing DFP in order to qualify for CFP.

The FPA by granting advanced standing is applying accepted recognition of prior learning principles to CPAs and Cas. They all have to demonstrate their financial planning capabilities by passing DFP8 and PKE before being eligible for CFP.

<I>Michael McKenna

Chief Executive

Financial Planning Association