The organization that grants the certified financial planner credential is restricting the way people trying to obtain the mark can describe themselves.
V. Raymond Ferrara, chairman of the Certified Financial Planner Board of Standards Inc., announced Friday at the organization's registered program conference in Washington that during the board's July meeting, it modified the definition of a “CFP candidate.” People who have completed CFP Board registered education programs — either certificate or degree programs — can use the term on their resumes or in interviews for five years. They may not put it on their business cards.
The new approach differs from the previous definition of “CFP candidate,” which applied to anyone who had signed up for the CFP exam. The new definition is not tied to the exam but does have a term limit. Mr. Ferrara said it's designed to prevent CFP aspirants from labeling themselves as a candidate indefinitely, if they keep putting off the exam.
“We were very uncomfortable with that going on forever and ever and ever — no motivation to bring that to a conclusion,” Mr. Ferrara told an audience of about 200 college and university CFP program directors.
In 2000, the CFP Board floated the idea of putting in place a “CFP associate” definition. But it was scuttled because of concerns it would diminish the value of the full CFP credential. Instead, the board settled on the “CFP candidate” label that had been related to exam signup.
“It's not a pathway credential, but it is as close as we think we can get at this particular point,” Mr. Ferrara said.
The goal of the definition is to inspire people who have completed the CFP Board's educational requirements to follow through and sit for the exam, which is
administered to about 6,000 people annually.
“What we're trying to do is keep people on the path,” Kevin Keller, CFP Board chief executive, said on the sidelines of the conference.
A “CFP candidate” can tell potential employers or clients that he or she is on the journey toward obtaining the mark.
Mr. Keller said the definition helps align the CFP with the CFA Institute's chartered financial analyst designation, which requires three levels of examination to obtain. Candidates for a CFA can indicate whether they're level one or level two when describing themselves.
“It's not unlike what our friends down in Charlottesville are doing related to helping the candidate along the way describe where they are in the process,” Mr. Keller said, referring to the location of the CFA Institute's headquarters.
(See also: CFP Board quietly cutting deals on compensation descriptions)
Deborah Giarusso, an instructor and CFP program director at the University of Northern Iowa, supports the CFP Board's decision on the definition.
“I like the idea because that allows recent graduates to tell a prospective employer that they don't have a certificate yet, but they have laid the foundation for financial planning,” she said.
Another CFP instructor was ambivalent. Michael Roe, a lecturer and manager of the CFP program at Purdue University, agrees the “candidate” moniker can tell a future employer that a person they're interviewing is “seriously focused on a designation.”
But “candidate” also has a drawback.
“It dilutes the marks,” Mr. Roe said. Five years is “an awful long time for someone to say they're working toward certification. I do applaud the CFP Board's attention to this issue … as opposed to having it open-ended.”
The CFP Board sets the educational and experience requirements related to the designation and conducts the enforcement surrounding it. There are 70,162 CFPs in the United States. The CFP Board does not have an estimate for how many people are “CFP candidates.”
