By Greg Opitz, Executive Business Coach
You wouldn’t go to a doctor who isn’t board certified. You wouldn’t trust your complicated tax situation to an accountant who isn’t a CPA. And you certainly wouldn’t seek legal representation from a J.D. who hasn’t passed the Bar Exam.
So why would the public go to a financial advisor or wealth manager who is not a CERTIFIED FINANCIAL PLANNER™ professional?
I’ve seen the value of the CFP® certification for advisors at every level.
- I spent four years educating them at the College for Financial Planning.
- I put in seven years certifying them as the Director of Certification Services for the CFP Board of Standards.
- Now I spend each day coaching and consulting advisors on how to enhance their practice and their lives as a Carson Coach.
One of my pieces of advice: Have your staff earn CFP® certification.
Encouraging the certification has value across the board, and if you’re a financial advisor or thinking of becoming one, there are six key reasons to earn your CFP® certification.
1. Increase Credibility & Marketability
In the industry today, we often talk about “substance and sizzle.” In other words, you need competence and credibility (the substance) and you also need brand and marketing (the sizzle). Becoming a CFP® professional covers both. It provides additional proof that you know what you’re doing, and it provides credibility from a marketing perspective.
The designation instantly boosts your reputation in the industry and sets you apart from non-certified competition. In a 2017 survey of CFP® professionals, 83 percent say they have a “competitive edge” over financial planners who do not hold the credential, and 91 percent would recommend the CFP® certification to other financial professionals.
2. Provides a Uniform Code of Ethics
The industry today has been littered with major ethics violations by some big names, which has damaged public perception and caused distrust of financial institutions in general. It’s also increased the need for advisors and firms to take a hard look at how they conduct business and meet the needs of their clients.
All recognized professions have a code of ethics and practice standards. It is one of the these that differentiate an industry from a profession. The CFP® certification requires advisors to meet and follow a uniform code of ethics and set of practice standards. Obviously, that doesn’t guarantee 100 percent ethical behavior, but it’s a starting point for any financial advisor to understand how they should conduct themselves and protect the public. Break the rules and risk losing your certification, thus significantly damaging your future in the industry.
3. It’s the Most Recognized Industry Certification
In financial planning, I see an important distinction between certifications and designations. Many designations show expertise in specialized areas and are valuable credentials. CFP® certification requires a more complete set of requirements for this industry to become a profession.
Certifications require these five components:
- A specialized degree or advanced education
- Work experience
- Proficiency exam
- Code of ethics and practice standards
- Continued education
Don’t get me wrong, many designations can be important and show specialized skills. But one of the ways to make wealth management a profession is to rally around one set of uniform standards – standards that define what make it a profession. CFP® certification has that framework in place.
As a 501(c)3 nonprofit, the CFP Board is not a membership-driven organization. Rather, its first interest is ensuring the public’s wealth is managed by advisors who are looking out for the best interest of their clients. CFP Board exists to protect the public. Having competent professionals following a set of standards helps ensure that occurs.
4. Start Your Career on the Right Path
I know firsthand the difficulties of the CFP® certification examination from my years being responsible for creating and administering the examination. Dozens of colleges and universities have adopted a CFP Board curriculum. They teach students the content defined by practitioners as the content needed to practice their trade correctly. That curriculum meets the educational requirement for certification and prepares for the examination.
It’s beneficial for everyone involved: The colleges are able to best prepare students for careers in wealth management, the students can enter the workforce with all the prerequisites employers want, and the public has access to more CFP® professionals.
Of course, this all hinges on firms hiring students out of college.
Work experience is needed to earn CFP® certification. And without CFP® certification, many firms may not hire an advisor. This presents a problem to young professionals.
Luckily, many large firms – including Carson Group – are teaming up with educational institutions to bridge the gap. By partnering with local and national educational institutions, students are getting opportunities right out of school and gain the needed experience to earn their CFP® certification – often in line with graduation. These young professionals are also providing great value to these larger, fast growing firms.
It’s an important component for the future of our industry, the growing number of young professionals entering the workforce, and the firms looking to grow and prepare for the future.
5. Consumer Awareness is on the Rise
Most high-net-worth individuals have an understanding of what a CFP® professional is and the distinction it carries, and the perception is growing among the general population, too. With advertising campaigns, key partnerships with industry organizations and educational institutions, and employer support, the awareness surrounding the CFP® certification will continue to grow.
Maybe you’ve seen one of the ads from their latest campaign, like this one:
People protect their health by intentionally seeking out certified doctors, and many are seeking to protect their wealth the same way. With awareness campaigns like this, people will only come to trust the CFP® certification more and more. That’s why 91 percent of CFP® professionals are satisfied with their decision to pursue the certification.
6. Make This Industry a True Profession
Nearly anyone can hang a shingle and start practicing in this industry. But most people don’t want “nearly anyone” managing their financial goals. I’ve long stood by the thought that for wealth management to move from an “industry” to become a true “profession,” it needs a recognized, standardized certification process.
That should be the CFP® certification.
Looking for more help on how you can find quality talent, build deeper trust with your clients, and grow your firm? Schedule a consultation with a Carson Coach today.
00369700 – 1/08/2019