Strength in CFP certification

You may think it’s surplus to requirements, but a new study reinforces just how much stock big firms place in the CFP as a barometer of any advisor’s potential.

By Mark David

According to the global study, which was carried out by the Financial Planning Standards Board (FPSB), 64 per cent of firms who responded believe that advisers who have their CFP certification are generally more productive. Additionally, the same percentage of respondents think those holding the designation carry lower compliance and legal risks.

Having the certification is important for advisors because “it shows that you’re really serious about your career,” says Mike Connon, a CFP-certified senior financial planning advisor and co-branch manager with The McClelland Group in Thornhill, Ont.

“There are people who do many jobs, and I think when you actually get your CFP, it shows that you’re seriously committed to a long-term career in financial planning.”

The survey itself highlights the increasing challenge even seasoned brokers have overcoming that bias for the CFP. They're by no means Rodney Dangerfield, but some firms believe the designation is absolutely vital for the advisors they hire, speaking directly to their potential to generate higher revenue.

Additionally, the results from the survey indicate that CFP-certified advisors agree that their revenue did actually increase.

“I think when you go through the whole planning process, you have more sources of revenue,” says Connon. “With CFP certification, (advisors) will know about insurance, estate planning and portfolio management. It gives you more sources of revenue than someone who is just a stock broker.”

When investors look for an advisor, they look for someone they can trust, has the right amount of financial knowledge, and can provide them with the guidance they need. But, Connon believes that investors are more likely to choose someone who has their CFP certification.

“The CFP has done a reasonable job at advertising and letting people know that there is a group around financial planning,” he says. “It provides clients with confidence they need to choose one of these professionals.”

Because of the value that this certification brings, Connon thinks more advisors will actively pursue obtaining their CFP credentials in the future.

“I think it’s become more of a requirement when people are looking for a financial advisor,” Connon says. “In the future, I think you’re going to see more people asking about (whether or not) the advisors have their CFP.”