Rivalry flares between American College, CFP

Announced revamp of the ChFC designation ignites a war of words

Jul 20, 2014 @ 12:01 am

By Liz Skinner

The American College wants more respect for its chartered financial consultant designation, and the Certified Financial Planner Board of Standards Inc. isn't obliging.

A war of words broke out last week after The American College said it is revamping the ChFC with changes to the curriculum that will make it more relevant to advisers than the certified financial planner designation, the industry's leading mark.

With training in topics advisers deal with today, such as retirement income planning, divorce and planning concerns related to gay couples, the ChFC education will offer more “hands-on” instruction for advisers than the CFP does, said Craig Lemoine, ChFC program director at The American College.

“We're positioning ourselves to be more relevant to practitioners — those who work with clients in the financial services community,” Mr. Lemoine said.

EXCHANGING TAUNTS

The CFP Board rejected the dig about relevancy and added a couple of taunts of its own — and the rivalry between The American College and the CFP Board reared again.

Their competition heated up in 2009, after the CFP Board added a fiduciary standard for its planners. More recently, the American College publicly criticized the largest member organization of advisers, the Financial Planning Association, for promoting the CFP designation.

“The American College is trying to paint a picture that we're not keeping up-to-date, but that's not true,” said Joe Maugeri, the CFP Board's managing director of marketing and corporate relations.

The CFP Board, which oversees 200 institutions that offer more than 340 registered CFP programs, surveys practicing advisers regularly to find new topics that may need to be added to the curriculum, he said. In fact, a new job-task survey is going on right now, Mr. Maugeri said.

As a result of the last survey in 2009, changes were made to the CFP curriculum in 2012 to include effective client communications, behavioral finance and additional ethics education, according to Michele Warholic, managing director of education, exams and talent for the board.

Mr. Maugeri also insisted that the CFP mark could not be compared to adviser designations like the ChFC because, he said, the latter lacks a code of ethics and a comprehensive exam, two elements that help render the CFP designation the most recognized and “highest standard” advisers can achieve.

The back and forth continued, with Mr. Lemoine stating that anyone with the ChFC certification has to follow a one-page professional ethics pledge and set of standards. While there is no comprehensive exam for the ChFC, candidates have to pass exams or present a financial plan after each course, he said.

PARTISANS WEIGH IN

Supporters of each designation weighed in.

Harold Evensky of Evensky & Katz/Foldes Financial Wealth Management, said comparing the two is like comparing “apples and oranges.” Others criticized the CFP Board for being “elitist.”

Jon Castle, an adviser with Paragon Wealth Strategies, has attained a CFP and a ChFC, in addition to a master's degree in financial services. He praised the educational content of each designation.

The CFP, though, has been the “most productive and opened doors along the way,” he said.

The CFP has a commanding lead in terms of adviser numbers. About 17% of advisers have a CFP certification compared to 11% who have ChFCs, according to a 2013 analysis by Cerulli Associates Inc.

The ChFC designation has historically been the domain of agents and advisers working with insurance. The American College also confers the chartered life underwriter designation, a new retired income certified professional designation, and is a provider of education for those attaining the CFP designation.

The CFP Board has taken lumps from those who think the board's “fee only” designation is too strict.

Last week, Mr. Lemoine made clear that the ChFC content is “compensation neutral.”

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