Executive Summary
The relentless march of technological change is slowly taking its toll upon undifferentiated financial advisors, casting a bright light of transparency on questionable products, commoditizing simple investment transactions and even somewhat more complicated portfolio construction, and forcing advisors to move up the value chain to providing real, substantive, high-quality financial advice to justify their cost. Yet at the same time, the push towards providing financial advice to solve complex problems creates a demand for advanced educational programs to provide advisors the knowledge they need to deliver those solutions.
Despite the opportunities created by this changing environment, though, the recent announcement by the American College of changes to its flagship ChFC program spent as much time continuing to fight its ill-fated ChFC versus CFP designation wars as it did talking about its own program – an odd juxtaposition given that the CFP marks now have 50% more designees than the ChFC, 5 times the consumer awareness, and for all the recent criticism that the CFP Board has taken regarding the enforcement of its compensation disclosure rules at least it has an enforcement mechanism to publicly sanction its designees or even revoke the certification, unlike the American College.
Against this backdrop, today’s blog post is about both the future of advisor education for all the institutions that teach financial advisors, and is an open letter to the American College in particular, its new leadership, and its board of directors, to take advantage of the unique opportunity presented with the organization’s transition to incoming CEO Bob Johnson to finally move past its ill-fated ChFC versus CFP designation wars, its hypocritical criticisms of the CFP marks that the organization itself teaches, and strategically reposition itself to support the emerging need for deeper post-CFP specializations and niche educational programs for financial advisors... or leave the door open once again for other institutions to step up.
Changing (Educational) Trends In Financial Services
The pressure is growing for advisors to demonstrate the value of their advice, as the profession’s product-based roots continue to be undermined. The internet and online discount brokers have long since obliterated the traditional “stock broker” of old (once actually compensated to provide stock quotes and “hot tips” and then take ticket orders over the telephone), the percentage of life insurance that is (higher-commission cash-value) permanent coverage has declined drastically in the past 20 years from over 55% in the early 90s to barely 25% today, the increased availability of technology tools to analyze the (often poor and costly) performance of active mutual funds is driving a decline of fund managers and the advisors who recommend them, and even a shift of advisors away from mutual-fund-picking towards portfolio management is now being pressured by the rise of “robo-advisors” that are commoditizing the assembly of a strategic diversified asset-allocated portfolio (supported by technology-driven automatic rebalancing and tax-loss harvesting) at a very low cost.
The good news is that even as every ‘traditional’ advisor product channel is slowly and steadily undermined, the value of holistic financial planning advice to weave it all together and help clients actually change their financial behavior for the better remains. The “bad news” for many advisors, though, is that it takes a lot more skill, experience, and raw knowledge to deliver effectively on the personal financial advice value proposition. Which means as advisors are driven further up the value chain to justify their cost, there is a need for greater technical competency and expertise, and educational programs to help get us there. Accordingly, it’s no surprise that the market share of CFP certification amongst advisors overall has more than doubled since the early 2000s.
In fact, the shift towards financial planning has been so significant than amongst financial planners, a crisis of differentiation is emerging because it’s no longer enough to just be a financial planner; being a credentialed advisor with years of experience who delivers customized, individualized comprehensive personal financial planning advice to clients is becoming mere table stakes to have a chance to work in an advice relationship with a high net worth or even a mass affluent client. Instead, it’s becoming increasingly necessary to pursue a “post-CFP” education towards a particular specialization to maintain differentiation and a competitive advantage.
Fortunately, a number of educational institutions and even some startup training/education organizations are stepping up, carving out deeper specialized knowledge programs in subject matter areas like to retirement income planning, Social Security, or wealth management, or fully focused niches like planning for LGBT couples to divorce planning to working with doctors. As more and more niches and specializations are established, the demand for programs can only grow, and enterprising educational institutions have an opportunity to lead the charge and help advisors define effective niches by crafting and rolling out educational programs to support them.
And notably, this potential proliferation of specialized designations is quite different from today’s glut of sometimes questionable advisor designations; historically, such programs have thrived amongst “advisors” who didn’t want to go out for more rigorous educational programs but wanted some “letters” after their name to imply greater expertise and credibility. But when the education always starts with CFP certification and then goes beyond it to specialize, there’s little value to specious designations (who really needs to add some bogus letters to their name after they already have a CFP?); the only educational programs that survive are those that add genuine value for the advisor (and therefore generally the consumer as well) above and beyond the core CFP educational curriculum.
The American College’s Failing ChFC Versus CFP War
Yet despite all of this incredible opportunity for moving the ball forward on advancing advisor education, the American College has remained stubbornly entrenched in its one-sided war with the CFP Board over the American College’s proprietary ChFC designation versus the CFP Board’s much-more-widely-adopted CFP certification. Thus, when the American College recently announced its latest program changes to the ChFC designation, including new coursework on issues like divorce, retirement income, and planning for GLBT couples, the organization took the announcement as an opportunity to take digs at the CFP marks for everything from having more advanced training to more “hands-on” instruction to making content that is compensation neutral. And taking swings at the CFP marks is hardly new for the American College.
Former CEO Larry Barton was even more pointed two years ago when criticizing the Financial Planning Association for (re-)asserting its focus on the CFP certification, ironically characterizing the FPA’s endorsement as supporting a “monopoly” despite the fact that the CFP marks are taught openly by more than 300 registered programs while it’s the American College that holds an exclusive monopoly over its own proprietary ChFC marks. With similar hypocritical hubris, the American College has:
- Criticized the CFP Board’s enforcement of compensation disclosures even though it has no enforcement process of its own against ChFC charterholders (when was the last time you saw an announcement of a CLU or ChFC being investigated by the American College and having his/her credentials revoked after a finding of guilt?);
- In a stunning example of schadenfreude (and outright unprofessionalism), mocked the organization after it CFP Board chair Alan Goldfarb resigned amidst then-allegations of compensation disclosure improprieties, and used the opportunity as an excuse to call for “an independent, national body to review and certify designations” despite the fact that CFP Board itself had already proposed a similar solution;
- Maintained it has the highest standards yet opposes the expansion of a fiduciary standard for all advice and does not even require a comprehensive exam (which the CFP Board long since recognized is a key for establishing a professional standard over 20 years ago), such that many advisors pursue the ChFC specifically because it's a longer but "easier" path (with no daunting comprehensive exam at the end);
- Refuses to recognize the value of having a minimum competency standard for financial planning advice for consumer clarity despite the fact that the American College’s entire existence is built upon Solomon Huebner’s vision of establishing a similar advanced education competency standard of life insurance professionals when the CLU was launched nearly 100 years ago.
Of course, for all its bluster about requiring more courses than CFP certification and even launching its “ChFC Highest Standard” website, Cerulli Associates estimates that there are nearly 50% more CFPs than there are ChFCs (of course it’s hard to know for certain because the American College is not as clear and transparent about the count and demographics of its designees the way the CFP Board is), and in the latest IPSOS brand tracking study the CFP certification has more than five times the consumer awareness than the ChFC amongst the mass affluent, despite the fact that the ChFC has been attempting to outgrow the CFP marks for over 30 years now (likely exacerbated by the American College's strategic stumble in rejecting its Society of Financial Services Professionals relationship that left it without a membership association to advocate on behalf its programs to the public and the media the way the FPA and NAPFA have advocated for the CFP marks!)!
In short, the American College continues to fight a war against the CFP marks that it has clearly already lost, which again is ironic given that the American College – the sole organization to offer its proprietary ChFC program – is also one of the leading programs offering distance-based education for the CFP marks themselves. In other words, the American College simultaneously bashes the CFP marks as being inferior to its own ChFC, even while the organization funds a significant portion of its proprietary designation programs with the profits generated by providing education for CFP certification in the first place!
Will Bob Johnson End The ChFC War And Move On To The Future Of Post-CFP Financial Advisor Education?
As the American College goes through its first change of leadership since 2003 in these times of change for the entire advisory industry, there is a significant opportunity with the retirement of Dr. Larry Barton and the addition of incoming president Dr. Bob Johnson to help the organization take on a new brand and role: to build upon its existing base as already being one of the leading providers of the CFP marks themselves, and become the leading educational institutional for post-CFP designations.
After all, the ChFC’s own educational curriculum essentially is the CFP certification education, plus several additional classes – which means the American College has already institutionalized its ChFC program as a post-CFP certification (literally, you take the ChFC classes after finishing the core CFP curriculum!), even while trying to contend that it should be a competitor, and not recognizing that simply having additional coursework doesn’t make up for a lack of a comprehensive exam or any enforcement of standards. Yet as a leading educational provider of post-CFP designations, it’s not necessarily a problem that the ChFC doesn’t have a comprehensive exam nor any enforcement of its credential-holders; the American College doesn’t need to be the standards-setting nor the enforcement organization for the competency of financial advisors, when it can simply do what it does best and be an institution that advances the education of financial advisors up to a CFP certification minimum and then beyond it.
In point of fact, the American College is arguably already the best positioned in the industry to lead the charge for post-CFP designations (though the College for Financial Planning isn’t far behind and could catch up soon!), with its wide range of advanced educational programs from the venerable CLU on life insurance to its ChSNC designation for Special Needs planning to the explosive growth of its RICP retirement income designation and most recently the launch of its Ph.D. program. As a leading educator for the CFP curriculum itself, the organization is especially well-positioned to take students into its CFP program and then extend their education beyond with post-CFP specializations; the depth of the American College's niche programs also allows it to attract the growing number of new financial planning professionals who begin their careers having already completed their CFP curriculum in college, but now need to focus and specialize beyond that point to build their career. Yet despite all of this, when the College announced its latest ChFC changes, it still spent as much time bashing the CFP marks as it did talking about how the ChFC extends educationally beyond them.
Nonetheless, a strategic shift to explicitly focus on delivering the CFP certification as a uniform base (growing its CFP enrollees), and a wide range of post-CFP certification specializations (along with “pre-CFP” programs like its Paraplanner certificate) beyond that point, is arguably not actually all that significant in the substance of the American College's programs, although it is clearly a dramatic shift in focus and messaging that is long overdue. The approach would allow the American College to work constructively with the CFP Board, continue to grow its key CFP enrollment without simultaneously bashing the designation (and instead by steering all students through the CFP program as a gateway and pre-requisite to take more advanced programs beyond that point), and build an ever-widening base of focused niche and specialization knowledge that can improve outcomes for consumers through better-educated advisors while simultaneously providing todays undifferentiated advisors a clearer and more structured path to find their niche/specialization.
Personally, though, I’ll admit that as an alumnus of the American College myself, I’d just like to stop being ashamed of where I got my own designations and a Master's degree, and instead be an alumnus of an institution I’m proud of – one that recognizes that the emerging profession of financial planning is simply an extension of founder Solomon Huebner’s vision of elevating life insurance salesmanship to a profession, and in turn calls for Huebner’s never-ending “quest for expert knowledge” to be fulfilled through both a profession defined by one uniform minimum standard for competency and a myriad of ways to specialize with post-CFP education in niches and specializations beyond.
Great letter Michael. Very articulate and well-timed as usual.
I loved my education at the American College (CFP & ChFC), and call them every several years to ask them (for my own education – not for a designation) if I can buy their excellent educational materials (books, study guides, and audio). Unfortunately, I have never been able to buy materials (unless I was willing to pay as if I needed the credits – which I didn’t since I only wanted the books for my own reading).
I love their materials, and always felt they could provide excellent continuing education (let alone deeper education via a designation) to alumns, but to no avail.
With the regulatory environment continuing to heat up, and the drastic changes with AICPA and all of the new disclosure requirements, does it still make sense for advisors to voluntarily add additional layers of regulation beyond what is required? I have never been asked whether I am a CFP, but I would hate to get the credential only to have the CFP board begin imposing regulations that would just make my life as an advisor more complicated. What are your thoughts?
Bert,
I’m not sure I follow how this has anything to do with “additional layers of regulation”.
These are about advanced educational programs. There’s no new/different/additional regulator involvement here. The American College is not a regulator, they’re an educational institution.
Respectfully,
– Michael
Michael,
I think he is referring to the “enforcement mechanisms” you allude to. ie for every designation you could get more and more “layers of enforcement/regulation” stating different things – of which you have to abide by the lowest common denominator.
Example: SEC, AICPA, CFP board etc
Yes, except the American College designations have no enforcement mechanism. That’s the whole point of the irony that they claim high standards and superiority over the CFP Board yet do nothing to actually enforce the standards they claim.
Simply put, you’re not subjecting yourself to any more enforcement/regulation by getting designations from the American College, because they have no real means to enforce them anyway. Nor any power to do so. Nor any capability to deliver enforcement consequences. Etc.
– Michael
“Simply put, you’re not subjecting yourself to any more enforcement/regulation by getting designations from the American College, because they have no real means to enforce them anyway. Nor any power to do so. Nor any capability to deliver enforcement consequences. Etc.”
That’s not factually true Mike. We have a process of investigating and removing designations for breeches of our code of ethics or student handbook.
Craig,
Thanks for letting me know. Is there any further detail you can share, or some public information you can point me to? I’ve never been able to find anything on the College’s website about this… I’m happy to be proven wrong on this point!
Is there a public list of designees who have been disciplined and had their designations revoked?
– Michael
When we receive a complaint about a student or certificate holder the complaint is investigated by a committee comprised of faculty and staff, who then make a recommendation made to the Vice President of Academic Affairs. From there the VPAA can make a recommendation to our Educational Policy Council.
We require students to test at proctored exam centers, unlike some of the other big players in the CFP market. I’m proud of the additional rigor, and I believe it helps students better prepare for the actual exam and enforces accountability.
We have recently and effectively enforced violations to our student policies. But as a college (much like our friends in Lubbock or Athens) we don’t publish a list of current students who have been removed from our programs.
Craig,
I’m not certain what the point of a disciplinary process is to protect the public if no one in the public knows about the outcome of the disciplinary process?
Is there any form of discipline between “not guilty” and “their designation just vanishes [because they were told not to use it anymore]”?
– Michael
I don’t think it’s appropriate or responsible to pubicaly list students who have been asked to leave one of our programs for confirmed or alleged violations of our student code of conduct. The process, outlined previously, has multiple review points to encourage fairness.
As for certification revocation and disclosure we would need to draw a line in the sand and move forward from there. Not a bad idea, and something that might happen one day.
Great blog post. I am a former CFP and a former CLU and ChFP and went about 50% through the American College’s Masters in Financial Services and agree with everything you wrote about this designation “battle.”
Thanks George! 🙂
Great letter Michael, I hope it will get new president’s attention. As a NAPFA member (as well as CFP) I need 60 hours of CE every two years. I am always looking for meaningful CE opportunites for both specialization and deeping of core areas. It seems like a great opportunity for American College to focus on providing quality CE – perhaps they do already but I haven’t seen it publicized.
Jeff Schatz
Jeff,
Indeed, each course from the American College is worth quite a big chunk of CE credit. Just doing a course or two of theirs every year or two would probably cover most/all of your CE requirements, with the added benefit that you’ll pop out a designation from time to time as well!
Sadly, though, the CFP Board doesn’t let you carry CE credit forward, or the American College designations I did in my early years would probably have satisfied my CE requirements for life! 🙂
– Michael
Well said as always, Michael. It is abundantly clear to the observant that the American College is selling a product and protecting its interest in same. It is almost comical to hear their comments. I admire your attempt to push the ball and would hope that it has traction. You have the designations, so perhaps your perspective will carry some weight. While not an American College graduate, I understand that their educational value is great. Perhaps one day they will have the courage to compete with other accredited educational institutions in advancing the practice of financial planning. That’s what the FPA does. I wonder if the American College will ever really step up. My sense is that they are good enough to do so and challenge others.
Jim,
Indeed, each course from the American College is worth quite a big chunk of CE credit. Just doing a course or two of theirs every year or two would probably cover most/all of your CE requirements, with the added benefit that you’ll pop out a designation from time to time as well!
Sadly, though, the CFP Board doesn’t let you carry CE credit forward, or the American College designations I did in my early years would probably have satisfied my CE requirements for life! 🙂
– Michael
I share your sentiments as a fellow alumnus, having completed my CFP pre-requisites and earned the ChFC thereafter at The American College. I plan to enroll in the RICP program there soon.
Unfortunately, I am skeptical that the College will change its ways any time soon given how financially beholden they are to the insurance industry which has a vested interest in the status quo and in resisting a universal fiduciary standard.
Joe,
I second your skepticism – which is why those of us who believe in the fiduciary standard need to encourage more to join and make it the “de facto universal standard.” Companies will follow, and some are already requiring this standard of advisors at a minimum.
I’m glad that you wrote this. I was really annoyed when I caught wind of the silly tiff between CFP Board and The American College. It seemed really juvenile and really soured my feelings toward both of them. Nothing wrong with competition in the open marketplace but I always compared it to how we as advisors should deal with companies. It never helps to disparage another company. Just talk about why you’re great and leave the other company alone.
I’m interested purely in education, not in turf wars.
Joshua J Sheats, MSFS, CFP®, CLU®, ChFC®, CASL®, CAP®, RHU®, REBC® (just putting these in here to show I’ve clearly worked with both of them)
Michael, separate question. Don’t you also have the CIMA designation? If so, why don’t you use it on your site/signature/etc? I read your firm’s ADV one time and I think I remember you having the CIMA (or another credential) that you don’t advertise on your site…if that’s true, what’s your theory behind that?
Joshua,
I don’t have the CIMA certification, as I’m not really focused on that area of investment management analysis these days (though I’m a fan of the program for those who are). I do teach IMCA’s CPWA program, but ironically BECAUSE I’m an instructor, I’m barred from taking the exam; if I took the exam, I’d have to stop teaching for a period of time because of the conflict of interest of knowing too much about the exact questions on the exam as an instructor. I’ll probably circle back for that one some day… 🙂
– Michael
Spot-on as usual. You make the case and offer a constructive path forward. I earned my CFP. I completed my Master of Science in finance as well as ChFC and CLU, CDFA and AIFA. All part of the continuous quest to advance my knowledge and skill set as a professional. I hope the American College honors itself, its alumni and the future of our profession by embracing your challenge.
Some good points Mike.
From where I sit (CFP Program director at The American College and involved in our new ChFC curriculum) the entire notion of a “war” is ridiculous. I think Kevin Keller and Larry Barton have similar personalities, are both very driven. They both have strengths and weaknesses, and both have grown their respective organizations.
Our redesign of the ChFC designation responds to feedback from certificate holders – more current content, more applied content. We have designed two classes to meet those needs (HS314 and HS319) covering the content you’ve discussed in the blog. I’m excited about these classes and have worked on both of them. They are top notch – filled with case studies, interviews and hands on examples.
A “war” is interesting, it gives you and other sources something to talk about but I think the concept is bunk.
At our core The American College faculty are proud to offer both the CFP and ChFC designations with rigor and integrity. The American College offers an outstanding CFP curriculum as evidenced by national exam pass rates (CFP Board reported to us that in July of 2014 exam over 79% of candidates from the college passed the exam) and other assessment measures.
We have a stellar case study class and have a faculty growing in reputation and recognition (Drs Pfau, Nanigian, Copeland to name a few). Personally I have been very involved with CFP Board as a volunteer, working with the council of examination for over four years. I’ve also written some of the LGBT community curriculum for our new ChFC class and hope it enriches the financial services industry as a whole.
I support the CFP designation and I believe that there is a space within financial services for other designations. Some of them are offered by The American College, others elsewhere (such as CIMA, CPA/PFS and CIMA) The CLU provides an outstanding insurance education, one I would recommend for any property/casualty or life insurance agent. The ChFC provides advanced, practical financial planning and the RICP is – in my opinion – hands down the best advanced designation in the retirement income space.
I support the CFP designation and openly question why a CFP is required to act as a fiduciary in some circumstances but not all the time. Candidly – I see pros and cons of mandating an industry wide fiduciary standard. I think a fiduciary standard would absolutely help Americans who can afford or have access to a financial adviser but leave lower and middle income folks in the dust.
I have my own hopes for our incoming CEO. I also have hopes for CFP Board. But mostly I hope InvestmentNews and other sources would focus on the quality of our institution rather than writing salacious headlines.
Craig,
The “war” is not just a media-fabricated construct. It’s something I’ve witnessed first hand going back to when I was getting my ChFC over a decade ago, and the History of Financial Planning book details some of the battles going back to the 1980s. I questioned Barton more than once about it directly, and he continued to openly maintain “the war” and insist that the ChFC was a superior designation program to the CFP. Barton was also the one who launched the “ChFC Highest Standard” website, which is still up at http://www.chfchigheststandard.com/
As I noted in the article, I have nothing against the ChFC itself. I’m a designee myself, and consider it a solid choice for post-CFP certification, as I wrote just a few months ago (see http://www.kitces.com/blog/what-comes-after-cfp-certification-finding-your-niche-or-specialization-with-post-cfp-designations/ ). And I’m always a fan of continued improvement in curriculum, which is why I’ve recommended the ChFC and other American College programs to MANY advisors over the years, and continue to do so.
But the American College HAS put forth and perpetuated this “war” between the designations, firing at CFP Board, FPA, and any other organization that promotes the CFP, despite the ironic fact that the College itself teaches a huge number of CFPs (who then go on to do the ChFC, CLU, and other programs).
All I’m asking here is that the American College better align the great programs it has to where the profession is going, and make the organization something that more of us alumni can be proud of, not apologizing for.
– Michael
The only people using the phrasing “war” are media outlets and blogs, not college employees, management or anyone at CFP Board. I can’t speak for 1980 (as I was 5) – but I am proud to work at the college and continue to be impressed at our innovation and leadership in the retirement income, health care and social security conversations.
Craig,
Whether the American College chooses to use the words of “fighting a war” or not are beside the point. The actions have spoken louder than the words for a long time now; the media outlets are simply describing what has been occurring.
And again, this isn’t about the College’s ACADEMIC leadership. As I stated explicitly in the article, I see a strong potential for the College to become THE leading educational institutional for post-CFP designations, built on the base of a broad range of programs it’s created (some of which I was involved with!). And I can’t count the number of students I’ve sent to the American College over the years (it’s probably in the 100-200 range by now).
But that still doesn’t change the history of embarrassing actions from the American College in its “views” about the designation, from the article from Dr. Barton 2 years ago (linked in the article, and just one of many) to launching their “ChFC Highest Standard” website and more.
Alas, if the College’s top level leadership for the past 10 years had had the same attitudes you’re expressing in the comments here, we wouldn’t even need to be having this conversation. :/
– Michael
My frustration with InvestmentNews and your headline is insisting on bad blood in an atmosphere of collaboration and support, rather than focusing positive changes in the ChFC curriculum.
But this is no way to kick off a honeymoon – and with that, I’ve enjoyed our dialogue. Maui awaits.
Craig said: “I think a fiduciary standard would absolutely help Americans who can afford or have access to a financial adviser but leave lower and middle income folks in the dust.”
Really?
Charles,
I’ve long suggested that expanding the fiduciary standard may have the OPPOSITE effect, and expand access to advice for the middle class, because a fiduciary standard will improve public trust in financial advice and reduce our ridiculously high costs to get clients in what is currently such a low trust business. See http://www.kitces.com/blog/news-highlight-continued-lawmaker-concern-on-how-fiduciary-would-impact-middle-class/
That being said, raising the concern that the fiduciary standard would LIMIT access to advice for the middle class has been widely espoused by some fiduciary opponents for some time, and has been ‘heard’ as a concern going all the way up to Congress (see prior link). :/
– Michael
Charles – What is the minimum investment amount to buy a Vanguard Mutual fund? How much more do I need to bring to the table to get anyone at vanguard, or a fee only adviser working with Vanguard, to give me advice at a fiduciary standard? I need $50 to begin investing with State Farm and have access to an agent who can provide asset allocation guidance. Get a fiduciary price point down to $50 and I’ll bite. Until then I’m not sure low income and middle america benefit from a new legal framework.
A middle income investor can set up a multi ETF Vanguard portfolio by meeting only that ETF share price. An hour fee only type can do this for 1-2 hours (I have).
I don’t think anyone believes that high cost wire house types are wringing their hands worrying about middle america and how they can take care of them.
Great blog post Michael. I remember taking all my CFP courses from American College. At the time, there were only five courses. I passed my comprehensive exam and became a CFP officially. A few years later I called the American College wanting to start my ChFC. (When I was taking CFP courses, the ChFC was only two extra elective courses). The American College then told me it would be three courses since I hadn’t taken all six basic CFP courses. You see, they had changed their CFP curriculum from five courses to six. I said I shouldn’t have to take their sixth CFP course since I’ve clearly proved my proficiency by passing the board exam. They said it “was their their policy”. I’m never a fan of being told “it’s our policy” so I asked why they would make me do this given my proven proficiency and they wouldn’t give me a reason. The only reason I can see for this new policy is for them to make more money. Thus, I hung up on them. They have left a very sour taste in my mouth and I plan to let everyone know about it.
Sarah,
The American College has the right to change their ChFC curriculum over time (and they have). If they decided to add the Capstone course (or any other course) to their ChFC curriculum, I have to admit I think that’s their right.
As memory serves, the number of additional courses to get the ChFC after the CFP has varied from as few as 2 to as much as 4-5 as educational content gets updated over time.
When I did mine, the ChFC was 3 more courses after the CFP as well.
– Michael
Hey Michael,
As everyone else mentioned, great insight sharing as usual! Truly are the crème of the crop in financial planning blogging for the professional ( you got robbed of the PLUTUS at FinCon this year).
While your point in regards to the American College may be right, I guess I feel it may be missing the forest for the trees. I passionately do agree that more knowledge / education is needed in the financial advisory community (especially vs. commissioned folk), the bigger issue in my opinion is the average investor’s financial education needs to be raised far enough so that they will select the more qualified advisor.
Here is the analogy in more detail. I feel like you are discussing taking the financial professional from perhaps a “masters” degree to a “PHD” (a good goal). However, most end consumers are at between a 4th and 8th grade level (in financial literacy – even the wealthy in general). If they can get raised to a 12th grade level they will select the better advisor (I would contend this is actually not that hard in terms of length of tme to do.. its just that it is very hard to monetize in current system). Of course they won’t get a “masters” or even a “bachelors” in financial planning.. that is why they have professionals. Curious of your thoughts on this analogy (partly my company I am launching will serve this gap to some degree I hope… but indirectly at best). Just curious if the FPA or CFP planning body or your XY Planning Network are doing much or are aware of initiatives to focus on this angle.
Btw, ran into your partner at XY Planning Alan at FinCon. Like what you are doing. Hope to connect in the future.
Matt
I understand why the “war” exists—they are competitors. Where I wish TAC would focus is gaining equal ground with third parties. It’s too late to win the publicity war, the CFP Board has an address in DC now. For example, a prerequisite for joining the FPA is the CFP designation. So….regardless of your fiduciary standing with your regulators (and track record) you are not welcome to join. (Yes, I understand the history between these organizations even if the general public does not.) But the coziness between third parties that are purportedly for promoting independent, good advisors and the CFP board is less than genuine.
Great post!
I’ve completed the ChFC and the MSFS through the American College, and have really benefited from the education. I’m also a CFP, and have taught the CFP curriculum, and been involved with CFP programs for the past 10 years. So, I think I have a reasonable appreciation for both sides of the coin.
While these recent course developments in the ChFC sound promising, it’s been my observation that the ChFC was being watered down, while at the same time working to promote itself as the “advanced designation”, or highest standard. It didn’t seem this was actually the case, and I haven’t even bothered to carry ChFC on my business card for some time now. When I took the ChFC in the late 1990s, it was a 10 course program. There were two courses each for retirement and estate planning, as well as a capstone case study course. I learned a lot, and thought it was a great program. After completing the ChFC I relaxed for a week or so, reviewed my notes, and then sat for, and happily passed the CFP comprehensive exam within a month. So it was clearly comparable, if not deeper education. At the time I was working in the training, case consulting, and advanced planning area of a large insurance/financial services company. If you had a complicated case, the people who really knew their stuff were those with the 13 course combo ChFC/CLU under their belts. I was disappointed when I saw the course load of the ChFC decrease, and even more so when I then saw were attempts to tout it as a more advanced designation. I’ve also heard that the MSFS has been cut from two residency sessions to one. Those residency sessions were very valuable, in part for the technical learning, but more so from the interaction I had with some advanced practitioners in attendance. With the rise in college CFP programs, many at the master’s level, I think the American College would also be wise to also review the MSFS, and make sure it is a top tier program, not an “easier option”. I choose the MSFS because at the time it was clearly the one MS that would take me well beyond my undergrad finance and CFP level education. Many of the other CFP MS degrees appeared to primarily cover CFP material.
As an admittedly silly aside, I miss the days of the blue cloth covered ChFC books with the gold embossing on them. They seemed to represent the depth and professional level of the program, and I was proud to display them on my bookshelf. The glossy, bright, “undergrad” looking books used now, in my mind, somehow parallel what has felt like a decline in the relevance of the program.
If the goal is to have the ChFC be the highest standard, than work to truly make it so, and I would be proud to see it happen. However, I agree with Michael’s vision of advanced specialty tracks as a more useful tact. If we look at medicine and law, it is apparent that deep specialties could benefit the industry and the consumers.