On Retirement

I took the test, I talked the talk. Now you can call me a CFP!

Broader work experience definition allows columnist to use designation

Jul 21, 2015 @ 11:09 am

By Mary Beth Franklin

I didn't think this day would ever come, but on July 15, I received an email from the Certified Financial Planner Board of Standards Inc. that said: “Congratulations! You are now a certified financial planner.”

I completed the financial planning certificate program at the University of Virginia in 2013 and passed the CFP comprehensive exam on my first attempt in November 2013.

But back in December 2013, when I received notice that I had passed the exam, I wrote a column noting that I probably would never be able to call myself a certified financial planner. Because of the CFP Board's narrow definition of work experience, it seemed that if I wanted to satisfy the requirement, I would have to quit my day job as a financial columnist and work in a financial services firm — something I was not willing to do.

A year later, the CFP Board expanded its definition of experience to include "support activities." In a Dec. 30, 2014, news release, the CFP Board said it “will now review activities and responsibilities reflecting financial planning knowledge and competencies that indirectly support the financial planner and/or the financial planning process.” It said it would begin accepting applications July 1 and review applications on a case-by-case basis.


The change touched off a firestorm of criticism. Michael Kitces, one of the most vocal critics, commented on his Nerd's Eye View blog: “The adjustments to the experience requirement may now be opening the door for virtually anyone with a job in the broad financial services industry (or even journalists writing about it) to qualify for 'financial planning' experience.”

In an email this week, Mr. Kitces congratulated me on my hard-won designation and conceded that my professional experience of answering individual consumer and adviser questions within the context of an overall retirement income plan is “at least closer to direct client experience.” But he expressed lingering concerns about the slippery slope of granting the CFP designation to those in financial planning support services.

“The CFP Board's decision to move further from direct client experience instead of closer to it still seems like a step in the wrong direction to building a bona fide and recognized profession,” Mr. Kitces wrote.

Michele Warholic, managing director of the CFP Board's education, exam and talent services, said the organization continually reviews the experience, education and exam requirements “to make sure we are current and relevant to what is needed by CFP professionals and the public.” Just think, prior to 1991, CFP applicants did not have to take a comprehensive exam.

When it comes to the new experience requirement, the CFP board focuses on whether a candidate has completed 6,000 hours of work experience — the equivalent of three years — regardless of how long it may take them to satisfy the requirement, Ms. Warholic said.

She equated the CFP experience requirement to the semester hours needed to complete a bachelor's degree. Some college students can squeeze the requisite 120 semester hours into three years, while others might stretch it out to 10. The required hours remain the same regardless of how long it takes the student to complete them.

Ms. Warholic gave the example of a vice president of financial planning at a large firm with no clients of his own. He may spend 25% of his time supervising financial planning activities and 75% on managerial tasks. In that case, if he is credited with 10 hours of financial planning-related activities in a maximum 40-hour week, it would take 12 years, not three, for him to satisfy the 6,000 hours of work experience requirement.


In my case, I spend about 25 hours per week responding to questions about Social Security benefits and claiming strategies from individual consumers and financial advisers seeking answer for their clients. I use some of those questions as the basis for the blogs and columns that I write for InvestmentNews to help educate the broader financial adviser community about the nuances of this crucial retirement income program. And I regularly conduct Social Security seminars, both online and in person, for which advisers can earn continuing education credits. Altogether, the CFP Board credited me with 35 hours per week of financial planning-related experience since I began writing for InvestmentNews four years ago, satisfying the 6,000 hour work experience requirement.

If I can do it, so can you. And if you are inspired to take the CFP exam, see my Nov. 11, 2013, column on test-taking tips from the pros.

While I know this explanation won't satisfy all the critics, I am happy to join the growing ranks of certified financial planners, a group that has increased 30% since 2007 to about 70,000 practitioners. Unfortunately, it is a graying industry, with more planners over the age of 70 than under the age of 30. And only 23% of CFPs are women — a statistics that hasn't budged in a decade.

The industry needs new blood to carry out its mission of helping Americans plan and provide for their future. Hopefully, future CFP applicants will be younger and reflect an increasingly diverse population in terms of both gender and ethnicity.

(Questions about Social Security? Find the answers in my ebook.)


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