ChFC and CFP® Certification

Writing Dated: 3-2002

By Gib Kerr, QFP, CFP^®, ChFC, CLU & Paul M. League, QFP, CFP^®

www.iaqfp.org / info@iaqfp.org

Two of the most important criteria to earn and be identified as a CFP^® Certificant are education and examination. IAQFP.org (formerly the Concerned Planners Group(sm)) is completely dedicated to these requirements. Indeed these are the kind of requirements that have made the CFP^® credential the standard of the financial planning field ever since the term “Financial Planning” was first popularized by the CFP^® community.

The term “Financial Planning” has no dictionary definition, and because of this it is used by all varieties of business people for marketing purposes. This causes great public confusion. There is a great and immediate need to clarify this. Government agencies and legislators are not satisfactorily addressing this issue, thus it is incumbent on the CFP^® community to do so. One major opportunity currently exists that could provide a meaningful step in this direction. IAQFP.org (formerly the Concerned Planners Group(sm)) has introduced this program and has been pursuing it since the summer of 2001.

The basic question underlying this idea is: are there any competitive financial planning organizations that are meeting CFP^® standards that could be integrated into the CFP^® family? We have identified one that is virtually a copy of the CFP^® program.

The American College, which trains and credentials insurance & financial professionals, decided to compete with the CFP^® movement a number of years ago when it became apparent that the public was demanding a way of identifying properly qualified professionals in this developing field. Their CLU credential identified the best-trained insurance professionals but they needed a new study course and examination program to match those created by the CFP^® organization.

That was exactly what they did. They mirrored the CFP^® studies and testing program. They couldn’t resist adding some extra insurance issues to the required materials. Thus, where the CFP^® program consisted of six courses and six exams, the American college program involved ten courses and ten exams. Graduates were granted the Chartered Financial Consultant designation: “ChFC”. They had already completed the studies and passed the tests that were just as demanding, and that covered the same material required of “CFP^® applicants”.

IAQFP.org (formerly the Concerned Planners Group(sm)) brought these facts to the attention of the CFP Board of Governors asking for recognition of the ChFC studies and examinations as a qualifying substitution for those offered by the CFP^® program. We also suggested that ChFC’s be required to attend a one-day indoctrination workshop to cover other aspects of the CFP^® requirements such as the Code of Ethics and practice standards, etc. Compliance with other details required of all CFP^® candidates would then qualify them to receive the CFP^® designation.

Our negotiations with the CFP Board over the past months have produced some very positive results. The CFP Board has been responsive and open in our discussions. They pointed out that the CFP^® studies and exam changed in 1991 and thus the kind of programs required by both the CFP^® program and the ChFC program has been different from that time on. They acknowledged that prior to 1991 both programs met the same standards as to education and examination. They do not feel that those CFP^® Certificants who had received their designations prior to 1991 where no longer qualified or should have to undergo any new requirements. We therefore asked if the they would consider crediting ChFC’s, who received their designations prior to 1991, the same recognition. Both groups have these many extra years of financial planning experience and ongoing studies to satisfactorily compensate for any real or perceived differences in the post 1991 CFP^® program.

The CFP Boards response is indeed encouraging. They advised that the reason this move has not been made is because their colleagues at the American College have never requested such recognition. One has to wonder if anyone has asked the College to do so and/or if the ChFC community has ever directly asked the CFP Board.

IAQFP.org (formerly the Concerned Planners Group(sm)) is delighted to have brought this issue to light, and we are anxious to see the many thousands of ChFC’s, who would qualify, quickly become a part of the CFP^® community. The public will get a shot in the arm from the publicity and great benefits from the increased confidence in the CFP^® designation as the prime means of identifying qualified financial planning professionals. This confidence will result in an increased respect and demand for all planners holding the CFP^® designation. The American College will benefit from increased enrollment in its current CFP^® courses. The CFP Board will find itself finally getting out of the red, financially, because of more than doubling its roster of Certificants. Whether it is the CFP Board, the American College, ChFCs, CFP^® Certificants, or the public we all serve, this is a win/win project.

The final issue then is for the CFP Board to become convinced that there is sufficient interest on the part of ChFCs. That task can be greatly enhanced by the meaningful support of all professional individuals and associations dedicated to serving the financial planning needs of the public. IAQFP.org (formerly the Concerned Planners Group(sm)) will continue to lobby in every way we can. The primary requirement, however, is the participation of the ChFC community. Individually, and in groups, the ball is in their court. ChFC organizations and individual ChFCs all contacting both the CFP Board and the American College requesting action can make good things happen. Mass emails, phone calls and letters are needed. The opportunity is here. The time for action is now.