Why more graduates aren’t sitting for the CFP mark

The CFP Board of Standards Inc. is digging around to try and figure out why many financial planning program graduates don’t go on to attain the certified financial planner mark. Early results are telling.
A recent study showed that 69%, or 351 out of 506 graduates, had not taken the two-day comprehensive exam in the five years since they had completed their bachelor’s or master’s degree in financial planning.
Hoping to enhance the pathway to the designation it grants, the CFP Board over the past two months had researchers sit down with graduates of five different financial planning programs and ask them what they’ve been up to since graduating up to six years ago.
Of the 16 graduates interviewed, six had secured the mark, three had passed the exam but were still working on completing the two to three years of work experience needed before the board awards the certification, four planned to take the exam in the future and three said they don’t have a CFP and don’t plan to seek one.
(Related: Rivalry flares between American College, CFP)
For those who plan to take the exam but haven’t yet, the cost of the exam stood out as a deterring factor.
At $595, plus probably at least a few hundred more for review classes, it’s not too surprising that cost is such a factor. It may be difficult for young planners to commit that much at a time when they likely still are paying off student loans and not yet seeing the lucrative paydays the industry typically yields in later years.
CONTINUING ED COSTS A FACTOR
They may also be discouraged by the thought of paying for 30 hours of continuing education credits every two years, another requirement for designees.
The graduates who worked for firms that paid for the test or otherwise encouraged their employees to get the certification were more likely to have attained it, said Kristy Archuleta, associate professor in the financial planning program at Kansas State University, which led the research.
A separate, more surprising, reason stopped some others from pursing the CFP: They had experiences during internships or other work during their school years that “turned them off” to the profession, Ms. Archuleta said.
“They saw what people were doing and decided that’s not what they wanted to do,” she said.
(See also: CFP Board quietly cutting deals on compensation descriptions)
One person said the job “looked lonely” and another said they wanted a job that was more sales oriented.
Though the number of interviews seriously limits universal takeaways, anecdotal experiences with these certification deterrents show the impact — positive or negative — that advisory firms can have on the development of new planners.
Perhaps more advisory firms could pay for the tests and coursework, offer financial incentives to employees who attain industry certifications or even pay for the employee’s time spent studying and taking the exams — if there’s genuine interest in building up the number of young advisers sticking with the industry.
It also seems that it’s in the whole profession’s best interest to give interns a worthwhile experience that doesn’t turn them off to the field before they even get a chance to see the potential fulfillment of a long career in the financial advice business.

Related Topics: Certified Financial Planner Board Of Standards Inc. (CFP Board)