Jamie Hopkins: What the CFP Mark Really Means Now

Jamie Hopkins

Amid the battle for talent that is unfolding in the advisory industry, there is a clear focus on securing financial planning professionals who have earned the certified financial planner designation, and according to Carson Group managing partner Jamie Hopkins, that focus is unlikely to abate in the years ahead.

In fact, Hopkins sees evidence that the CFP marks will only become more important in the future as more clients demand a true financial planning experience — one that goes beyond mere discussions of the portfolio to factor in questions about lifestyle, risk tolerance, legacy giving and many other areas.

What’s more, Hopkins and others hope the CFP marks and other designation programs can be an important part of the industry’s effort to tackle its longstanding and stubborn diversity problem, wherein Black and Hispanic Americans continue to be significantly underrepresented in the ranks of the financial services profession.

Ultimately, as Hopkins argues in the Q&A dialog below, the CFP certification process remains a powerful way for advisors to show they can deliver a planning-first experience that is based on the latest research and proven best practices — and on their clients’ best interests.

With the CFP Board currently undergoing its first-ever competency standards review, Hopkins says now is an important time for the CFP marks, and he hopes any changes to the program will help to expand the opportunity for qualified professionals to pursue the marks.

THINKADVISOR: It is obvious why a single planning professional would want to go through a program like the CFP and to have this certification to show their clients. But, anecdotally, we are seeing a more concerted effort by firms to establish CFP talent — whether they recruit it or train it at home.

What do you think about this topic?

See also  CFP Board Rolls Out Scholarship to Support 'Next-Gen' Women

JAMIE HOPKINS: There’s a lot to say here, and so maybe some of my personal background will help to set the stage, as will some background about Carson Group.

To begin with, I think credentials for advisors are important in general. Most credentials add a layer of credibility, and it adds a layer of trust between the end client and the advisor. As you know, in some ways, this is really a trust business, so any way that you can raise that trust factor is going to generally be a good thing.

I would say that the CFP designation is the most well-known mark in the world of financial planning today, but you have other designations as well that are important, including MBAs, JDs, [chartered financial analysts] and [certified public accountants], for example.

Here at Carson Group, we took the stance three or four years ago that, if we have a W-2 advisor on our staff, we require them to either come in with the CFP marks or an equivalent, or to get it within five years of joining the firm.

So, we’ve really put a lot of effort into this. Last year, we had 35 or so people going through the CFP coursework here, and we paid for that. In addition to the actual coursework, I was running monthly educational training sessions, too, and that was a lot of fun. We have a second group that just started their training earlier this summer in June, so we’ve built a little bit of a CFP study group learning ecosystem here at Carson.

Why are we doing this? It’s because we are a planning-first firm, and that is how we want to be seen in the marketplace. So, the CFP mark creates a good baseline for our advisors.

See also  How to File a Life Insurance Claim With First Symetra National Life Insurance Company of New York

You have said that you see the CFP mark more as a baseline for great planning than the gold standard. Can you expand on that?

Yeah, and this is a point where the folks at the CFP Board and others might push back on my comments, but I actually view the CFP marks as the baseline for a planning professional, rather than the gold standard.

Earning the CFP is not the only way to learn the planning skillset, either. For example, I spent a lot of time teaching planning at the American College of Financial Services, and I was never a one-designation guy. For example, I view the chartered financial consultant designation as being a real CFP equivalent. It’s much of the same course work.

One important difference is that the ChFC, though, doesn’t require a four-year college degree, whereas the CFP does. This is important because, if we want a more diverse advisor community, that four-year degree requirement is a hurdle.

That’s something that has come up in our conversations with the leadership at the CFP Board. They seem to be aware that this is an issue, so we’ll see what comes out of their review of the competency standards.

Do you think they will drop the four-year degree requirement?

It’s hard to say. I’ve spoken about this, and it’s one reason why I respect the ChFC standard. You can get it without a four-year degree.

Notably, it was not always required that CFP candidates have a four-year degree, and in fact, if you look at 15 or 20 of the most famous and successful CFPs from the last 30 years, I’d bet half of them don’t have a four-year college degree.

My personal take is that I could get behind maybe reducing this to a two-year associate degree requirement. If you think about it, those last two years at college, that’s when you are pursuing your major and that more specialized learning.

See also  12 States High Earners Are Fleeing

In this sense, the CFP coursework and the final exam are really like earning your major. So, I think a two-year degree requirement could be a happy middle ground. I think that approach could work well, personally.

As I have noted, we treat JDs, CPAs, ChFCs and CFPs as all kind of being on the same playing field, with some nuances. Obviously, it’s harder to get the law degree than it is to get the CFP, and I would argue it’s also harder to get the CPA. Nonetheless, all of these marks show a commitment to education and a high trust standard for end clients.

Would you say that the MBA has lost some of its luster in the financial planning world?

Yeah, I probably would. Sadly, the MBA has lost some luster, in part due to the proliferation of virtual business schools and the emergence of non-regulated business schools offering MBAs.

For example, I personally have an MBA from Villanova, but I don’t really recommend this as a career path to most people anymore. If your company is going to pay for it, and you can do it while you’re working, that’s still a good opportunity.

I would also say that, among the client base we are prone to serve, people do still know and respect what an MBA is, and it especially gives you a leg up when you are working with business-owner clients.

So, it’s not like MBAs aren’t important anymore. Remember, if you’re going to be a financial planner, probably half of your clients are going to be entrepreneurs, and they will like that you have the understanding of how businesses work and operate.