After taking up the issue at their board meeting yesterday, the CFP Board officially announced this morning that the 80% fee increase for CFP certificants to support a public awareness campaign for the CFP marks has been approved. So now the only question is: Will it work? Will this mark the start of a new dawn for the growth of financial planning as a profession, or an(other) expensive failure in the annals of CFP Board history?
The official press release from the CFP Board announcing the results came out earlier this morning, along with a Summary Fact Sheet of the details of the final approval. The campaign was approved exactly as originally proposed, with one notable exception - the CFP Board increased its own contribution commitment from its reserves which was originally "just" $6 million, up to a contribution of $7 million in 2011 and another $2.3 million in 2012. Perhaps this was meant to signal just how much faith the CFP Board has in its campaign; it's also notable that this means the CFP Board will have about as much skin in the game (over $9 milion) as the CFP certificant community (also an estimated $9 million) in the first year.
As I have written earlier on this blog, I have been a supporter of the CFP Board's public awareness campaign proposal since it was first announced. And I do believe there is value in developing a brand for the CFP marks, even if we can't always perceive the value directly.
In addition, notwithstanding the criticism of the CFP Board, I commend their process in developing the proposal for a public awareness campaign. They have gone out of their way to extensively research as much as possible in advance, issue extensive communication about the proposed campaign with Fact Sheets and via "road show" presentations and webinars. They have responded to questions posed about the campaign and have really showed a process to their decision-making. And notwithstanding the various complaints against the proposal, ranging from the FPA's LinkedIn group to the discussion boards on Financial-Planning.com, the survey results generally maintained that a strong majority support the increase (and of those who didn't support, most still indicated in the FPA's survey that they would maintain their certification).
Simply put, this is not the CFP Board of old anymore; I see a new organization that has emerged. It is an organization that still has its challenges, but the differences between how this proposal was evaluated amongst the planning community versus prior initiatives is night and day, and I think we need to give the CFP Board credit. The communication occurred entirely in advance; the CFP Board polled its CFP certificant base in several different ways trying to evaluate interest and support; and everything was announced in a very public manner, in advance, as a proposal, to allow the community time to voice its own concerns and respond. I think there are still some who wish the CFP Board could do even more, but at the end of the day the CFP Board has to fulfill its own mission. And even after the fact, the CFP Board maintains its efforts to provide quality communication, including the new Fact Sheet of the final decision, and next week's Business Update webinar.
I think it's also good that the FPA involved itself in the discussion as the membership organization that advocates for financial planners; notwithstanding some concerns from the FPA that the CFP Board's fee increase may impact its own membership base, I think the FPA played the role it should have in the process. The FPA did its own homework surveying members and communicated the results to the relevant parties (including the membership base, and the CFP Board itself), trying to expand our understanding about how much support there was for the proposed campaign.
In the end, I have to admit that I'm tremendously encouraged about the process by which this proposal was enacted. That itself is a good sign that the profession is maturing and advancing and that the organizations that have such an impact on our long-term success better understand their stakeholders and the roles that they play.
As for the campaign itself, at this point only time will tell. The CFP Board has some lofty goals, and some have criticized it as a self-interested effort on behalf of the CFP marks (although that IS the CFP Board mission!). But I see this as the possibility of a new dawn for financial planning, built on the back of a public awareness campaign that maybe, finally, will help the public understand that there is value to going through the financial planning process with someone who has made the educational, experiential, and ethical commitment to deliver it "right".
I guess we'll see what happens from here!
Chuck Rylant says
I appreciate the Board’s effort to meet the desire of the membership to increase the public’s demand for the CFP mark. That said, from my own informal surveys and research, people make buying decisions solely based on know, like and trust of the individual and normally do not even factor credentials or certifications.
For that reason I do not believe any increased tax (fee) will result in a measurable increase in business. But, as you state, only time will tell and I truly hope there is a measurable increase in demand as a direct result of the extra promotion.
Michael Kitces says
I can appreciate your concern for this, and have seen a lot of comments about the view “my clients choose me because I’m someone they know, like, and trust.”
But the research is out, and it tells us that frankly, we’re absolutely TERRIBLE at understanding our own motivations and reasons for making choices. Brand and perception matter, even if we aren’t cognizant of it.
You might take a look at the blog post I made about this a few weeks ago at http://www.kitces.com/blog/index.php?/archives/56-Is-There-Value-to-Developing-a-Brand-for-the-CFP-Marks.html – which includes a link to a really interesting research study that showed people actually have a different tangible experience solely because of their subconscious perceptions of ‘brand’.
Bill Schretter says
I told the President of the CFP Board one week ago at the FPA National Chapter Conference that I support the Advertising Program. I want them to add value to the CFP Brand and the national program is not expensive for the value we receive. I value the brand and I want others to as well. They have hired a first rate advertising organization to do this two year program. I do want the CFP Board to supply related collateral to help the FPA and CFP certificants with a grass roots complimentary plan.
Important to realize- with this program, all members need to be held to the marketing standards of the CFP Board in all their marketing efforts in their daily business marketing activities.