Stand up and be heard

Julie Berry

Now more than ever, Australians need access to quality, affordable financial advice.

Why? Well, the world is more complicated and the level of financial literacy among the general public is decidedly poor. Debt is rising. Our appetite for consumables is burgeoning. We are also seeing more and more people using a line of credit on a mortgage to buy a plasma TV.

With the regulatory eye firmly pointed in our direction, the evolution of professional standards in the financial planning industry has to step up a notch.

A significant part of that process rests with the Financial Planning Association’s (FPA) premier designation, the Certified Financial Planner (CFP).

Internationally recognised, the CFP designation has been around for some time.

There are more than 100,000 CFP professionals in 18 countries from Canada to China and New Zealand.

The road to CFP certification requires commitment and hard work, but the rewards are significant.

To boost the integrity of the designation in Australia, last year the FPA moved to increase requirements for the CFP designation to a relevant undergraduate degree.

To maintain CFP status, a financial planner is required to complete 120 hours of continuing professional development over three years.

At around 5,500 in number, CFP professionals make up around one-third of all practising financial planners in Australia.

It’s my view that this proportion should be much higher if we are to establish ourselves as the best financial planners in the profession.

It is good to see that the FPA last year saw one of the highest enrolments for its CFP certification program.

Nevertheless, there is still work to be done on the CFP profile.

The FPA wants to get to the point where CFP is widely aspired to by advisers as the pinnacle of their professional achievement.

It would be great if we could get to the point where the general public seeks out a planner on the basis of their CFP status.

I’m pleased to say that this is being addressed.

CFPs have called for more to be done to promote the brand, and the FPA has responded by implementing a major two-year promotional campaign.

FPA chief executive Jo-Anne Bloch announced at the FPA 2006 national conference that the campaign would be backed by significant resources to promote the CFP brand among financial planners and consumers.

Importantly, while this campaign is going to be big, the FPA has undertaken that this will not come at the expense of other member practitioners who deliver high quality advice to their clients.

The FPA has done much and will do more — and rightly so — but there is more of a role to be played by CFPs. I believe that we, the CFP planners, also have a responsibility to play a part in promoting ourselves.

Why not talk up the designation when explaining our role to clients, focus on it in advertising, use it in seminars? I find it curious that CFPs have to do so much to attain the designation, but then often fail to capitalise on it.

Think of the potential voice of 5,500-odd CFPs banded together.

If we want to be seen as professionals we must get out there and tell people what the CFP mark really means. If every CFP told just 100 clients, the word would spread like wildfire

Similarly — and this goes for all planners and not just CFPs — there is an onus on us to promote the value of the advice we provide. Again, the FPA has a role, but backed up by us, the members, it could be much more powerful.

We all know there are so many great stories to tell; real life experiences where good financial advice has helped put a smile on the face of a client.

A recent Newspoll, for example, found that 67 per cent of respondents agreed that a qualified financial planner was the best person to help them with their financial affairs.

It found people with a financial planner were more likely to have less debt, invest any windfall in superannuation, understand what factors contribute to their super fund earnings and make extra contributions to their super fund.

The inaugural value of advice awards in June last year again highlighted the importance of financial planning advice not just for those with accumulated wealth, but also for those with limited financial resources.

In one entry, a financial planner helped a family that was under significant financial pressure simply by identifying an entitlement from superannuation funds for a disabled member of the family and unrealised Centrelink benefits.

There is a lot of noise about the cost of advice, but research among people who use a financial planner shows that fees and charges rank low in importance.

No doubt this year will bring the usual round of legislative changes, additional compliance burdens and market fluctuations. Surely these factors make it all the more important for us to encourage the public to seek out our services so that we can be instrumental in securing their financial futures with quality professional advice.

If we don’t tell them that’s what we do, who will?

While the FPA has a clear focus to promote this message, let’s not rest on that alone. Let’s stand up as professionals and tell anyone who will listen about the difference we can make.

Julie Berry CFP is managing director of Berry Financial Services.