IFA fights for CFP rights

The Institute of Financial Advisers (IFA) has called for greater recognition of the Certified Financial Planner (CFP) designation in its submission on the draft Code of Professional Conduct.

Wednesday, May 5th 2010, 5:00AM 2 Comments

by David Chaplin

Lyn McMorran, IFA president, said while the industry body was generally pleased with the draft code, it wanted some of the alternative qualification rules "tidied up".

In its code submission released yesterday, the IFA called for holders of the CFP and CLU designations to be exempt from achieving educational standard set C, which concern adviser's practice and processes.

The industry body says advisers who have completed the group's two-year mentoring program should also be exempted from completing standard set C.

As well, the IFA says CFPs should be considered as having already attained standard set D, which relates to investment knowledge, as the educational mark shows they have demonstrated "competence and understanding of investment theory and the fundamentals of investment".

The IFA also says the omission of the CFP as exempting advisers from standard set E, insurance knowledge, was an "obvious mistake" as the designation includes proof of competence in the risk area.

Given the exclusion of the CFP from many educational exemptions in the draft code, the IFA says "there could well be a miscarriage of justice".

"We have substantial concern as to the rationale in not giving recognition to the CFP designation, given that it is internationally recognised and highly respected and is awarded to financial planning practitioners who meet stringent entrance and ongoing criteria," the IFA submission says. "It is a little ironic that an associated accounting professional, for whom financial planning services are arguably not their core business, may meet the requirements of Standard Set C, yet a professional in the business itself, with an internationally recognised designation, may very well be excluded."

Read IFA submission here

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Comments from our readers

On 5 May 2010 at 7:56 am Independent Observer said:

Before defending the virtues of the CFP designation it would be interesting to understand how many CFP members:
a. Consider themselves to be full-time financial planners
b. Designed & implemented portfolios over the past 5 years with exposures to finance companies
c. Use appropriate tools to assist with research, risk appraisal, effective monitoring

I have been introduced to numerous industry participants over the past few years who have been touting their CFP designations, and who are - frankly - a sad indictment on the industry and the term "professionalism". It seems to me that the CFP label has been considerably watered-down in recent years – possibly to help bolster numbers…

On 5 May 2010 at 9:05 am Arthur said:

Well said Independent Observer. There are many great CFPs who would fly through assessment, but some who have just made the same mistakes for decades. I however suspect the standards have actually got harder to give some credibility to the "Grandfathered" CFPs.