cary list evp and coo financial planners standards council

Towards a Profession

Cary ListEVP and COOFinancial Planners Standards Council

…. The CFP Yesterday, Today and Tomorrow


Today’s discussion: What makes a profession? Does financial planning meet the test? Should the CFP community strive for

recognition as a profession? If so, how do we get there?

….The CFP Yesterday, Today and Tomorrow


What makes a profession a profession?


“A calling, requiring specialized knowledge…including instruction in skills and methods [and the] scholarly principles underlying such skills and methods, maintaining, by force of organization or concerted opinion high standards of achievement and conduct, and committing its members to continued study and to a kind of work which has for its prime purpose the rendering of public service.” 1

1 Webster’s New International Dictionary

A Profession Defined – My Favourite Definition


Is Financial Planning a Calling?• If so, what exactly is the calling that is

financial planning?• More in a few moments

A Profession Defined

One Piece at a Time:


Do CFPs “require specialized knowledge”?• Clearly yes – but is it the “right”

knowledge?• More on this in a few moments too!

A Profession Defined – One Piece at a Time


Instruction in Skills and Methods?• Yes, through FPSC’s rigorous

education program, but…



“High standards of achievement and conduct maintained by force of organization and/or concerted opinion?”• Yes, through FPSCs Examination and

Ethics standards, and through enforcement of same



Requirement for “continued study”?• Yes, through CE requirements.



Are members of the greater CFP community committed to “a kind of work which has for its prime purpose the rendering of public service”?



While many CFPs are committed to serving the public good, if it is to be a true profession financial planning must:• Not be seen as solely a marketing tool• Be recognized as serving the public

good



Two more key pieces of the puzzle

I. Two key pieces are missing:• At its heart, a profession must include

uniformity and consistency of service• That is, Financial planning is financial

planning is financial planning


II. If a tree falls in the forest….that is, Without:

Public recognition of the CFP Perceived public value Recognition of financial planning as a

public service

Can we really call financial planning a true profession?

Two more key pieces of the puzzle


Where is the CFP Today?• 16,000-strong• Growth exclusively through its

rigorous certification program• 97% annual retention rate• Brand awareness continues to grow• No credible alternative professional

financial planning designation

Before we proceed…


• Commitment of key individuals and organizations to stay the course towards consolidation of “alphabet soup” of designations

• Commitment to highest standards and 4E program

• Commitment to serving the public interest• Commitment of dedicated CFP professionals….But, our work is far from done….

How did we get here?


Recent poll and survey• Very limited provision of comprehensive

financial planning• Very few pay for financial planning service

directly• Most Canadians feel having a financial plan is

at least somewhat important to them, but…• Most don’t have a plan, and…• Of those that do have a plan, most didn’t use

a financial planner to design it!

A little reality check


While most Canadians believe having a financial planning designation is important…• They don’t know what the

designations are! Most believe that financial planning is

regulated, and therefore assume…• “If my advisor’s a financial planner,

he must be qualified!”



Clearly, much work is still needed on: Public understanding of what financial

planning is, let alone the CFP Perceived public value to using a CFP

professional Recognition of financial planning as a

public service



FPSC MISSION

“FPSC benefits the public by leading the evolution of the financial planning profession in Canada through the development, enforcement and promotion of the highest competency and ethical standards in financial planning as identified by individuals who have earned the CFP designation.”


We must:• Define “the calling” that is financial

planning• Ensure that the “specialized

knowledge” is appropriate for the delivery of professional financial planning

• Ensure relevance of the “instruction in skills and methods”

How do we achieve our mission?


We must:• Help establish “concerted opinion”

around standards of achievement, practice and conduct

• Ensure relevance of requirements for “continued study”.



We must:• Never lose sight of “rendering of public

service” and the public good by:• Ensuring uniformity and consistency of

service• Continuing to build public awareness about

financial planning and the CFP, and the benefits that financial planning brings to Canadians



1. Spread the word2. Define financial planning3. Establish clear standards of practice

for professional financial planners4. Establish extensive, clearly defined

proficiency standards for CFP professionals

Four specific initiatives to help


“If you build it they will come” – or will they?

Thus, FPSC’s Brand Ambassador program• Leverage the message through the

greater CFP community• Get the message out!

1. Spreading the Word


1. What is financial planning?

2. Who can benefit from financial planning?

3. Who are qualified to offer professional financial planning?

4. Where can they learn more? www.cfp-ca.org

Brand Ambassador Program – 4 Key Messages


The Brand Ambassador Program

It’s a heavy load…..

We can’t do it alone!


Until now, we have not had a clear and concise articulation of exactly what financial planning is

How can we expect others to embrace financial planning as a profession if we don’t all speak the same language?

2. Defining Financial Planning


“Financial Planning is the process of creating strategies, considering all relevant aspects of a client’s financial situation, to manage one’s financial affairs to meet life goals.”

Financial Planning Defined


Definition underlies all other projects, including:• Practice Standards• Competency Profile

Financial Planning Defined


What will Practice Standards accomplish?• Help establish “concerted opinion”

around standards of achievement, conduct and delivery

• Ensure uniformity and consistency of service

• Build on the definition of financial planning

3. Establishing Clear Standards of Practice


CFP Practice Standards – the Building Blocks

Identifies what is the expected behaviour of all CFP professionals in all aspects of work

Mandatory for all CFP professionals, but not necessarily specific to the practice of financial planning

Code of Ethics


Lays out what planners should do when performing financial planning

Financial Planning Process



Financial Planning Process

Code of Ethics



Bring together process and Code of Ethics

Serve to ensure consistency and uniformity of practice, while still leaving room for creativity and professional judgement

Assist CFP professionals by providing guidance and clarity

What are CFP Practice Standards?


Apply, at least in part, to both comprehensive financial planning and to components thereof

Some professional judgement involved

Applicability of the CFP Practice Standards


Financial Planning: Includes all components of a

comprehensive financial plan:• Financial Management• Asset Management• Tax Planning• Risk Management• Retirement Planning• Estate Planning

Definition of Financial Planning - Revisited


Financial Management• Strategies and techniques to optimize

short- and mid-term cash flows, assets and liabilities

Asset Management• Strategies and techniques to optimize

returns on assets in consideration of the client's requirements and constraints

Financial Planning Components Defined


Risk Management• Strategies and techniques to manage

exposure to financial risk

Tax Planning• Strategies and techniques to

maximize present value of after-tax family net worth



Retirement Planning• Strategies and techniques for

accumulation of wealth and for withdrawal during retirement years

Estate Planning• Strategies and techniques for

preservation and distribution of accumulated assets



The “applicability” test:

Are the creation of strategies involved?

Are all relevant aspects of the client’s financial situation to be considered?

The CFP Practice Standards


Desired Outcomes

• Clarify expectations, both for CFP professionals and the public

• Result in better-informed public

• Raise confidence in CFP professionals

The CFP Practice Standards


Development began three years ago

10 draft standards were introduced in September 2002

The CFP Practice Standards - Development


Beginning in fall ‘02, focus groups solicited feedback from CFP professionals

Revised draft document in January 2003

Over 30 CFP professionals involved in the creation of the revised draft



Revised draft posted on web for comment in January 2003

Dozens of comments analyzed and synthesized into a new revised draft released in September 2003



Launch in October 2003

Comments considered until October 31, 2004

Final standards January 2005

Mandatory implementation April 1, 2005



New draft late July or early August

www.CFP-CA.ORG



Comments received on:• “Modular/Segmented” financial planning• Non-financial-planning activities• General applicability• Nature of engagement letter• Disclosure requirements• Prescriptive versus principled nature of

standards New draft will reflect comments as appropriate

The CFP Practice Standards - Comments


Professional Competency Analysis Project• Re-evaluate the knowledge, skills and abilities

required of CFP professionals• Develop a new competency profile for CFP

professionals• Leads to a new test blueprint• Sets the foundation for new pre-certification

requirements• Lays the groundwork for new CE requirements

4. Establishing Proficiency Standards


First time a “competent financial planning professional” is being defined

Competency be based on performance, not knowledge• “It’s not about what you know, it’s

about what you do”” Based on the clear definition of financial

planning and on the Practice Standards

Establishing new Proficiency Standards - Why?


Provide yet more clarity as to what a CFP professional does, and expectations for competent performance

Better relate the real world of financial planning to Education and Examination

Competency Analysis - Anticipated benefits


Built on the following:• Definition of financial planning • Statements of competency for each of

six financial planning components• Statements of broad-based pervasive

financial planning skills not unique to specific components

Competency Analysis – Building Blocks


As well as:• Statements of professional skills• Specific knowledge required

Together, the competency statements, professional skills, and underlying knowledge form a complete Competency Profile for CFP professionals

Competency Analysis – Building Blocks


Development began in June 2003 Independent Consultants AAC RWG

Competency Analysis – Development


It all came together at AAC met in May 2004 to finalize the framework and the statements of competency

Now it’s the greater CFP community’s opportunity to participate

Competency Analysis – Development


Two surveys released this week and last• Competency• Knowledge

Competency Analysis – Next Steps


Once Competency Profile is validated• New Test Blueprint• New curriculum guidelines and

requirements• New CE guidelines and requirements

Competency Analysis – What next?


The movement towards recognition of financial planning as a profession must continue if we are to meet the needs of the public

Four key initiatives by FPSC are helping to lead the way:• Communication of a clear and concise

definition of financial planning• the Brand Ambassador program• the CFP Practice Standards• the CFP Competency Profile

In summary


One thing is certain:• Through these efforts, and the work

of CFP professionals like you, financial planning will be recognized as a profession and the CFP as the mark of the financial planning professional in Canada

In Summary


Thank You

In Summary

QUESTIONS?

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