Value of CFP?
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[quote=Ferris Bueller]Looked at a prospect statement today and the broker is a CFP, CLU. Client had 1.2M a year ago and now has 750K. Idiot CFP had him 100% in equities and the client is 1 year away from retirement.
I guess they are so busy teaching complicated things at CFP school that they forget the basics. I hope he sues this overeducated fool.[/quote]
Can you explain what the fact that the client was not allocated properly has to do with the fact that the broker is a CFP, CLU?
Is it that no broker WITHOUT the designation would ever do such a thing?
I think its safe to say that there are shmucks with the designation, and shmucks without the designation.
Take this with a grain of salt, but supposedly Smith Barney keeps statistics on this.
According to our management, in the first 12 months after earning the CFP designation the median new Smith Barney CFP's gross production goes up 40%. That's a big number. 40%. As to why, I can't say cuz I am not there yet. My guess is that the increased knowledge leads to more credibility, bigger tickets through planning (INSURANCE!!), and more referrals from CPAs and attorneys. I will be sitting next July, so I will let you know once I get there."Take this with a grain of salt, but supposedly Smith Barney keeps statistics on this.
According to our management, in the first 12 months after earning the CFP designation the median new Smith Barney CFP's gross production goes up 40%. That's a big number. 40%. As to why, I can't say cuz I am not there yet. My guess is that the increased knowledge leads to more credibility, bigger tickets through planning (INSURANCE!!), and more referrals from CPAs and attorneys." That's one guess. Here's another. They have one year more experience in the business and they are actually working instead of studying for the CFP.[quote=rockstar1]Take this with a grain of salt, but supposedly Smith Barney keeps statistics on this.
According to our management, in the first 12 months after earning the CFP designation the median new Smith Barney CFP's gross production goes up 40%. That's a big number. 40%. As to why, I can't say cuz I am not there yet. My guess is that the increased knowledge leads to more credibility, bigger tickets through planning (INSURANCE!!), and more referrals from CPAs and attorneys. I will be sitting next July, so I will let you know once I get there. [/quote]Going from $50,000 to $70,000 is not that big of a deal.
[quote=anonymous]"Take this with a grain of salt, but supposedly Smith Barney keeps statistics on this.
According to our management, in the first 12 months after earning the CFP designation the median new Smith Barney CFP's gross production goes up 40%. That's a big number. 40%. As to why, I can't say cuz I am not there yet. My guess is that the increased knowledge leads to more credibility, bigger tickets through planning (INSURANCE!!), and more referrals from CPAs and attorneys." That's one guess. Here's another. They have one year more experience in the business and they are actually working instead of studying for the CFP. [/quote]A very commonsense observation...
Like I said, take it with a grain of salt. However...
The commoditization of the asset management business is well underway. Margins will continue to get squeezed. (Remember Touchdown Bonds?) How will you set yourself apart when everybody has basically the same platform? (with apologies to the Jones-ers, you guys have the best platform EVER!! I am an ex-greeny--I have a right to take shots) It's easy to rip apart another broker's work right now becuase everybody's statements are down. But do you really want to take on a client that is firing his old advisor over performance? They will do the same to you at the first sign of trouble--take my word. Planning changes the whole relationship. You are viewed in a different light. You are not the guy calling them on the latest bond. Or the hottest stock tip. Or getting them the best deal hitting the biggest breakpoint in one fund family (Putnam anyone?). You are the person who went with them to their attorney to make sure their assets are protected now and for future generations. You helped them avoid probate, estate taxes, and made sure the spendthrift kid with the drug habit doesn't blow his inheritance up his nose. And yes Virginia there is a Santa Claus! Didn't mean to get all worked up, but man I think if you are in this business and don't get the CFP and embrace a planning practice you are totally missing the boat. IMHO.Rockstar1, this thread isn’t about embracing a planning practice. It’s about the value of having the CFP. What does the CFP allow one to do? Nothing. What can one do without the CFP that they can do with the CFP? Everything.
The advantage of having a CFP is marketing and that's it. How advantageous is this? That can be argued all day. The disadvantage of having a CFP is it makes one accountable to the CFP BOG. That is something that I personally wouldn't want. I'm strongly in favor of acquiring the knowledge that one gets when they study for their CFP. Let's just not confuse the knowledge with the letters. The knowledge is of huge importance. The letters carry very questionable importance.My business partner/mentor is not a CFP and wants me to be designated as such in the next few years just so we’ll have one in the firm. He’s been in the industry 19 years, has amassed 60 million AUM with around 50 household clients. And yes, he has a life and likes it that way. He has embraced the planning practice and has adopted his clients’ lifestyle without the CFP. So, IMHO, he has not missed the boat. I, on the other hand, want to follow his footsteps later on and get the CFP. But that’s just for my personal and educational preference.
Knowledge is always valuable but knowledge alone is not enough to succeed.<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
I personally believe that the CFP education and exam should be minimum requirements to call oneself a financial advisor.
--WM
[quote=gregoron]My business partner/mentor is not a CFP and wants me to be designated as such in the next few years just so we’ll have one in the firm. He’s been in the industry 19 years, has amassed 60 million AUM with around 50 household clients. And yes, he has a life and likes it that way. He has embraced the planning practice and has adopted his clients’ lifestyle without the CFP. So, IMHO, he has not missed the boat. I, on the other hand, want to follow his footsteps later on and get the CFP. But that’s just for my personal and educational preference.
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If he’s not a cfp, how can you follow his footsteps and become one?
“I personally believe that the CFP education and exam should be minimum requirements to call oneself a financial advisor.”
Why? Both FINRA and the SEC have basically taken the position that the term "financial advisor" doesn't have much meaning. Do we want to give the CFP BOG that much (any) authority? The title doesn't have meaning. How one earns their living does have meaning. The CFP is about financial planning. Financial advising is simply a subset of this. If one is going to earn their living 100% by telling people if an EIA is appropriate and which one to use is definitely engaging in financial advising, but is not engaged in comprehensive fiancial planning like the CFP BOG is after. Also, even if a minimal education is required, why would it be the CFP? The CLU/ChFC requires more classes. We also have to be aware of unintended consequences. If a CFP is going to be needed to call oneself an advisor. To avoid confusion, a CFP is going to probably have to engage in comprehensive planning in all instances. This really makes working with the little guy not profitable or forces the little guy to pay too much.The CFP is definitely a marketing tool, i wont disagree with that. I think it can be a valuable one if marketed properly. But i also realize that point can be debated - valuable to some, but thats a point of view, not a fact.
What is a fact, is that while one may have the knowledge without the designation, it is the designation that allows the public to make a judgement about the competency of the advisor.
You may know you have the knowledge, and i may know you have the knowledge, but there is no way for the client to have the knowledge.
I can call myself an accountant, without being a CPA, but how is the client to know whether i have an indepth knowledge of GAAP or auditing procedures, or tax code?
I suppose there are CFP’s (and CPA’s) who learned it all and passed the exam, then forgot it. But the designation is, at the very least, a starting point for intelligent people to make judgements.
Bash away
[quote=Sportsfreakbob]The CFP is definitely a marketing tool, i wont disagree with that. I think it can be a valuable one if marketed properly. But i also realize that point can be debated - valuable to some, but thats a point of view, not a fact.
What is a fact, is that while one may have the knowledge without the designation, it is the designation that allows the public to make a judgement about the competency of the advisor.
You may know you have the knowledge, and i may know you have the knowledge, but there is no way for the client to have the knowledge.
I can call myself an accountant, without being a CPA, but how is the client to know whether i have an indepth knowledge of GAAP or auditing procedures, or tax code?
I suppose there are CFP’s (and CPA’s) who learned it all and passed the exam, then forgot it. But the designation is, at the very least, a starting point for intelligent people to make judgements.
Bash away
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If you want to market yourself as one who is known for handing people thick notebooks that they don’t understand, be my guest. It doesn’t take much to explain to a prospect that planners write plans and that messing with investments is out of the scope of their expertise. Kind of like how auditors shouldn’t be messing with doing tax returns. How’s THAT for marketing?
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If you want to market yourself as one who is known for handing people thick notebooks that they don't understand, be my guest. It doesn't take much to explain to a prospect that planners write plans and that messing with investments is out of the scope of their expertise. Kind of like how auditors shouldn't be messing with doing tax returns. How's THAT for marketing?
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Do you speak English? Do you know how to read? "the designation is, at the very least, a starting point for intelligent people to make judgements."
You missed the whole point of my post!
“What is a fact, is that while one may have the knowledge without the designation, it is the designation that allows the public to make a judgement about the competency of the advisor.”
How is this a fact? Most of the public don't have a clue as to the difference between a CFP and an ABC. I'm not sure about your "intelligent" comment. My clients are primarily split between attorneys, CPAs, and business owners. As a whole, they are prett intelligent. I used to get asked about once a month if I was a CFP. I thought that I'd have to become one. Slowly, the questions slowed. I'm not sure if I've even been asked once in the past year. In my experience, it's simply been that intelligent people don't care. They care about what I can do for them. As an aside, there seems to be move against becoming CFPs. Some Broker/dealers are starting to discourage their reps from getting the designation.[quote=Sportsfreakbob]
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If you want to market yourself as one who is known for handing people thick notebooks that they don’t understand, be my guest. It doesn’t take much to explain to a prospect that planners write plans and that messing with investments is out of the scope of their expertise. Kind of like how auditors shouldn’t be messing with doing tax returns. How’s THAT for marketing?
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Do you speak English? Do you know how to read? "the designation is, at the very least, a starting point for intelligent people to make judgements."
You missed the whole point of my post!
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Mr. Prospect, why would you have a planner manage your money? Was it the planner’s idea?
Can someone lay out the process of becoming CFP? Honestly I’ve never known exactly what it was. Also, is there a way to learn the material over time without actually starting the process, therefore making the actual process that much easier?
ETA: Is there any chance I could pass the test without studying? Just looked on Wikipedia at the basis criteria and I like to think I have a pretty good handle on all of the subjects discussed (except maybe employee benefits). How hard is it if you have almost 10 years of experience, and are slightly smarter than the average bear?
The complexity of the cases presented, and the breadth and scope of the informational recall required to fully address each and every issue present would, in my estimation, make it nigh unto impossible for anyone going in cold to come close to making it through. After reviewing the material myself, that's my take on it. You may have a pretty good handle on the day-to-day issues that we all face with clients/prospects, but the CFP curricula really require drilling down much, much further than most of us ever do. Made my head hurt just reading through the stuff.Can someone lay out the process of becoming CFP? Honestly I’ve never known exactly what it was. Also, is there a way to learn the material over time without actually starting the process, therefore making the actual process that much easier?
ETA: Is there any chance I could pass the test without studying? Just looked on Wikipedia at the basis criteria and I like to think I have a pretty good handle on all of the subjects discussed (except maybe employee benefits). How hard is it if you have almost 10 years of experience, and are slightly smarter than the average bear?
LuvIndy, If you’re sure that you do not wish to pursue the designation itself for whatever reason, I do believe you could receive value including sales ideas through reading through the texts suggested for the Boston University/Boston Institute of Finance courses. I’m sure there are others that would accomplish this goal although I’m not familiar with them.
My experience is that there are numerous areas of the CFP that many advisors would already know and find a bit tedious, although you’re not there for that. One has to have a base line level to progress from. That being said, the areas that you may be less familiar with (estate planning, taxation, employee and executive benefits?) are really golden. You might be leaving an opportunity on the table you’re unaware of. I have gotten SALES from my study of the program and am quite frankly indifferent to receiving the designation. It’s more of an “I might as well since I’ve done the classes” thing.
Take a look at the material and get from it what YOU want. Don’t worry about some piker who’s way to analytical to do anything other than write up a War and Peace sized document only to have the prospect say, “thanks, that’s good to know.” Get the info and close with it.
[quote=anonymous]“What is a fact, is that while one may have the knowledge without the designation, it is the designation that allows the public to make a judgement about the competency of the advisor.”
How is this a fact? Most of the public don't have a clue as to the difference between a CFP and an ABC. I'm not sure about your "intelligent" comment. My clients are primarily split between attorneys, CPAs, and business owners. As a whole, they are prett intelligent. I used to get asked about once a month if I was a CFP. I thought that I'd have to become one. Slowly, the questions slowed. I'm not sure if I've even been asked once in the past year. In my experience, it's simply been that intelligent people don't care. They care about what I can do for them. As an aside, there seems to be move against becoming CFPs. Some Broker/dealers are starting to discourage their reps from getting the designation. [/quote]ANON -
I am not saying that all intelligent people would choose one adviser over another, based on the CFP. But some would. And that gives someone with the designation an edge in some situations. Thats all I;m saying. As i think i said in my post, or at least i believe i implied, there are some CFP's who are not as good investment advisoers as others who dont have the designation. But i have found, at least in my experience that there are enough people who do recognize the designation, that i run across, where it does make a difference. And as far as what i stated as a fact, ok, i'll call it my opinion. Its my opinion that having the designation is better than not having the designation, in motivating many of the people i meet to make a judgement. Does that make you feel better?
I will agree by the way, with some of the comments on this board, that while the designation is something i find helpful, the knowledge gained from going thru the exercise is more helpful.