After years of wavering, the Financial Planning Association has recently re-focused itself back to specifically supporting financial planners who pursue the CFP certification and advocating for the CFP to be recognized as the one true designation, recalling back the famous "One Profession, One Designation" refrain first uttered by financial planning luminary P. Kemp Fain nearly 25 years ago. Yet the reality is that while the CFP certification has advanced significantly since Fain’s first comments in 1987, so too have many "competing" designations, some of which represent very high quality advanced educational content, albeit often in narrow and focused specialties under the financial planning umbrella. Nonetheless, many "bogus" designations have also proliferated over the years, contributing significantly to consumer confusion. As a result, while there is still virtue to having the CFP certification as a minimum baseline designation to cut out the other bogus designations, there needs to be room for the advanced specializations that have begun to emerge as well. Which means perhaps it’s time for the FPA to extend Fain’s famous speech one step further, from "One Profession, One Designation" to "One Profession, One [Minimum] Designation" – where the CFP certification serves as a minimum baseline for anyone who wishes to become a financial planner, but beyond which a growing number of "post-CFP" educational programs can flourish to support the emerging fields of financial planner specialization.
One Profession, One Designation
The origins of the "One Profession, One Designation" phrase, as explained in the book "The History of Financial Planning" by E. Denby Brandon and H. Oliver Welch, was a white paper written by financial planning pioneer P. Kemp Fain in 1987, which was extended into a speech of the same name at one of the major financial planning conferences in 1988. Fain, who at the time was chair of the IBCFP (the predecessor organization to the current CFP Board), made the case that to become a profession, financial planning needed to rally around a single designation, and that the CFP certification was in the best position, because of the rigor of the education, examination, and experience requirements, its mainstream public awareness (and its standing as one of the few certification programs at the time that actually maintained legal trademark protections).
The fundamental point of Fain’s speech was that there needs to be a uniform minimum standard that the public can use to identify a true professional; otherwise, it’s a never-ending fight to stamp out imposters who use bogus alternative credentials to falsely imply credibility and trustworthiness. And in point of fact, this is true of any recognized profession – they all have a single entry point, as a minimum standard, that serves as both a way to certify that an individual does in fact have the basic competency necessary to be a professional, and to create a barrier to entry that prevents individuals as holding themselves out to the public as a professional until they meet that minimum standard. In Fain’s view, the CFP certification represented the best available option at the time as such a minimum standard.
As I have written in the past, in today’s world I still find that the CFP certification represents the best available option as a single, uniform, minimum standard for financial planning to establish itself as a profession – a view that has recently been (re-)embraced by the FPA, which has revived Fain’s “One Profession, One Designation” refrain. However, at the same time the world today is not quite the same as it was when Fain made his speech nearly 25 years ago. While there has been a proliferation of "bogus" designations, there has also been a significant growth in legitimate designations that provide comparable, or even deeper and more specialized knowledge, than the CFP certification itself.
As a result, it seems that perhaps the new refrain for the 21st century should actually be "One Profession, One [Minimum] Designation" instead.
One Profession, One [Minimum] Designation
The point of "One Profession, One [Minimum] Designation" is to make it clear that while every recognized profession needs a single, uniform, minimum starting point, the reality is that one educational program alone clearly cannot encompass all possible aspects of the professional body of knowledge, especially if/when/as that body of knowledge grows. Most professions provide the opportunity for voluntary advanced education beyond a baseline minimum: Lawyers have LLM degrees for specialization after their JD degree; doctors have board-certified specializations; and so, too, will financial planners need "post-CFP" education as the body of knowledge grows and allows for increasingly focused specializations with business models to support them.
And in reality, there is already a growing list of designations, certifications, and educational programs that provide a genuine depth of knowledge, beyond merely what the CFP certification teaches, that represent viable and bona fide specialized designations to hold in addition to the CFP itself. In today’s marketplace, these include the CFA, the CIMA and CPWA from IMCA, the CLU and ChFC and many of the other educational programs from the American College, not to mention professional licenses and degrees in complementary areas like the CPA or JD.
Yet what’s notable about these programs is not that they are "alternatives" to the CFP – as I’ve noted recently, programs like the CLU should not be held out as CFP certification alternatives. Such programs lack the comprehensiveness of educational knowledge that’s necessarily to deliver comprehensive financial planning. However, the mere fact that programs like the CLU represent partially overlapping but substantively different knowledge areas isn’t meant to be a denigration of the CLU and similar programs, but simply to note that they represent specializations beyond the CFP certification, not alternatives to it.
In other words, while the CFP is still a strong standard as a comprehensive minimum baseline for comprehensive financial planning, programs like the CLU represent an emerging world of "post-CFP" specializations. Which means there is actually a place for more than literally one designation – there may be one as a minimum baseline, but then there can be others that serve as a series of beyond-the-minimum specializations.
Current CFP Certification Is A Waypoint, Not An Endpoint
It’s important to note that while I continue to agree with Fain from 25 years ago that the CFP certification is in the best position to become the baseline minimum standard for all financial advice, that does not mean the journey of the CFP certification itself has reached an endpoint.
In point of fact, the CFP certification itself is a standard that is still being advanced over time. It took on the fiduciary standard for the delivery of financial planning just a few years ago, and still allows CFP certificants to avoid a fiduciary obligation by merely providing a single area of advice and implementation (a gap that in my opinion must be closed, and will be discussed in a future blog post!). The CFP Board is just now in the midst of raising its continuing education requirements, adjusting its enforcement process and developing sanction guidelines, and refining its experience requirement. Notably, the CFP certification comprehensive exam, now recognized as one of the more rigorous aspects of the CFP certification process, wasn’t even introduced until 1991, several years after Fain’s famous speech; at the time, the examination process was merely a series of standalone exams for each of the individual educational classes.
In other words, the point here is simply that the CFP certification is still advancing to a true professional standard; it’s not there yet. But at the same time, it already represents the best option out there, and it has continued a remarkable ongoing progression towards becoming the standard for financial planning over the past 25 years since Fain’s speech. Which means it may perhaps be more deserving than ever to become adopted as the standard – with an appropriate transition process over time to accommodate those who may be experienced and educated practitioners but who, in the past, did not get their CFP certification.
Nonetheless, the CFP certification becoming the entry point standard for all financial planners doesn’t mean that the CFP certification would become the one and only designation that exists in the financial services world. To the contrary, when financial planning is a recognized profession, I would anticipate that the CFP certification would merely be the starting point in the career path of a professional, which would include a wide range of "post-CFP" designations for even more in-depth, specialized knowledge.
The bottom line, though, is that until we can set one clear measure for the public to understand who is and is not a professional, confusion will remain and the public will be harmed as a result. That doesn’t mean we need to eliminate all other forms of advanced education and designations, but having a single hallmark for professional status is the best way to help the public separate the wheat from the chaff. Fain recognized this 25 years ago, and it remains just as true today.