Financial planning in today’s day and age is one of the most crucial skills required, be it in life or business. For the Financial Planning Standards Board India (FPSB) which is a subsidiary of the global professional body, the Financial Planning Standards Board in the US  primary focus is to set standards for financial planning and provide the Certified Financial Planner certification,  Krishan Mishra, CEO, Financial Planning Standards Board (FPSB) India told FE education. “The certification process is rigorous and consists of various levels and modules. It covers syllabus such as investment planning, retirement planning, tax management, estate planning and insurance. After completing these modules and passing the exams, candidates must submit a Financial Planning assessment and take a final case study-based examination,” he added.  

The Financial Planning Standards Board (FPSB) is a standard-setting body based in the US, which claims to represent FPSB India as part of this global organisation. FPSB India claims that the certification programme is recognised globally and pursued by students in 27 different territories around the world.

The organisation claims that this certification programme is different from the rest of the accounting courses as it allows individuals to provide comprehensive financial advice. “Accounting primarily focuses on an organisation’s current financial position, while financial planning is a pervasive function that remains essential throughout an individual’s and organisation’s life. Financial planning is required by everyone, from individuals to large organisations,” Mishra said. 

Furthermore, the organisation claims that more than 2.13 lakh individuals have obtained the Certified Financial Planner (CFP) certification globally. In India, it claims that the number of CFP professionals stands at 2,517. These numbers are continuously growing with more and more students pursuing  this certification each year. “The passing rate for the CFP program varies from session to session. On average, it hovers around 55%. This means that approximately 700 to 800 students may pass the CFP exams each year. However, it’s important to note that while they may pass the exams, they cannot be certified until they complete their graduation and fulfil the required work experience,” he said. 

FPSB India further claims that the coursework emphasises practical and application-based learning. “Once they complete all requirements, they need to fulfil an ethics module and gain supervised experience, either one or three years, before applying for certification. After achieving certification, they can use CFP marks and this certification is recognised worldwide,” Mishra informed.

Further, the organisation claims that the CFP certification programme typically takes between 18 months to two years to complete. It claims that there are two pathways for students. The regular route is for those who start after completion of high school that is grade 12th high school) and complete their graduation. The second route is for individuals who already hold certain relevant qualifications, such as an MBA in Finance or other professional accounting certifications. “For the second route, candidates must need a minimum of three years of work experience in the field of finance and financial services. This pathway can be faster, as it would take around six to seven months to complete the certification,” he added. 

Elaborating the criteria for enrolling in the programme, FPSB claims that interested candidates from any educational background, whether it’s science, humanities, commerce or any other stream can enrol in the programme. As for the enrollment of students, the institute claims that the minimum requirement is to complete high school. “But it’s important to note that you cannot apply for this certification until you complete your graduation. Globally, this certification is equivalent to a post-graduate qualification, so candidates can only apply after completing their graduation,” he said. 

As for the CFP certificate,  the organisation claims that after completing the required modules and exams, candidates need to submit a Financial Planning Assessment, followed by a case study-based final examination. “Once candidates complete things, they must complete an ethics module session and gain supervised experience, either one or three years, under the guidance of a Certified Financial Planner professional. After meeting all these requirements, they can apply for certification and use the CFP marks, which are recognised globally,” Mishra explained. 

Further, the FPSB claimed to have collaborated with 16 education providers to enhance the training and job placement of students. For institutes  the CFP programme offers a wide range of career benefits and job opportunities and professionals can find employment in various sectors, including banks, insurance companies, mutual fund companies, securities firms, treasury departments of organisations, family offices, private banking, wealth management, portfolio management, among others. “The demand for CFP professionals is high, and they have the option to work for established organisations or set up their practices. While competition exists, there are more job opportunities than there are certified professionals, making it a promising field for those who pursue this certification,” he added. 

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A decade ago, Kurt Rosentreter had five investment advisors on his team who also constructed financial plans. Today, his team members’ titles look a little different. His team now has five wealth managers and also recently hired a dedicated financial planning specialist.

“We’ve fine-tuned as we’ve grown to take on more expertise just in broader planning, and for the first time, have now hired a specialist because there’s so much work in that space,” says Mr. Rosentreter, portfolio manager with Manulife Securities Inc. and president of Upper Canada Capital Inc. in Toronto.

As clients increasingly seek financial advice and planning support for a wide range of life concerns such as supporting children’s post-secondary education, planning for a sabbatical, sustaining their lifestyle in retirement, leaving a legacy for their children and grandchildren, and more – some advisors say they’re shifting their hiring strategies to bring on more certified financial planners (CFPs).

“In the past, the focus and emphasis were often more on investment advice, and now it’s become a more comprehensive and integrated financial planning approach,” Mr. Rosentreter says, adding he has always considered financial planning as part of his practice.

Maili Wong, senior wealth advisor and senior portfolio manager with The Wong Group at Wellington-Altus Private Wealth Inc. in Vancouver, says she believes the value of the CFP designation – and the rigour involved behind qualifying for and maintaining it – has “really increased” over the past few years as the pandemic prompted clients to seek out advice on a broader range of financial concerns. Those reasons are why Ms. Wong has brought more CFPs into her practice.

“The value of advice around planning and holistically having the ability both to solve issues from an investment standpoint but also look at how the investments relate to the genuine [financial plan] is the priority for clients,” she says.

There are approximately 17,000 CFPs across the country, according to FP Canada. Candidates complete an education program and pass a national exam to qualify. In April 2022, the certification and oversight organization’s new rule requiring those applying for the designation to have at least a three-year bachelor’s degree came into effect. In July 2022, FP Canada began allowing individuals without a post-secondary degree to qualify for CFP certification if they’ve been a qualified associate financial planner for five years and completed the certification bridge path to CFP certification or had 10 years of qualifying work experience.

Once certified, CFPs must complete 25 hours of continuing education annually, including two hours of education on professional responsibility.

The evolution of the industry

Ms. Wong believes having more CFPs on staff allows her to offer better services to clients by developing comprehensive financial plans and calibrating their investment plans to meet those goals. Her practice also uses technology enabled by artificial intelligence to run simulations for clients that show them the impact of choices they make on their long-term financial goals, as well as the impact of their investments on their financial plans.

This approach reflects a broader evolution in the financial services industry, she says.

“You’re able to develop a meaningful plan that’s a living and breathing document that investment advisors can then implement through a very sound investment strategy,” she says.

“It’s important to have both, and I think that’s the difference. In the old days, it was just about investing and letting growth work for you and hopefully, everything will pan out.”

Building trust with clients

An-Lap Vo-Dignard, senior wealth advisor and portfolio manager with Vo-Dignard Provost Wealth Management Group at National Bank Financial Wealth Management in Montreal, says having a dedicated CFP is also an important part of building stronger relationships with clients.

While the investment dealer has financial planners and estate planners available for advisors, his team opted to bring a dedicated financial planner onto the team. Mr. Vo-Dignard says his team found the firm’s financial planners were often overwhelmed, which created delays and unnecessary back-and-forth if clients were missing small pieces of information.

“Having someone on our team, it’s quicker, smoother, and it builds trust [with clients],” Mr. Vo-Dignard says, adding that clients appreciate working with someone who knows and remembers their life circumstances, and checks in with them. “It adds value.”

Mr. Rosentreter says investment dealers and financial institutions have historically been light on financial planning support, and it has been up to individual advisors to determine what they want to do on a practice level.

“The research continues to show clients want more than just investment advice,” he says. “If financial firms and practices aren’t on the bandwagon, they need to get there.”

He believes advisors who provide investment advice exclusively will find themselves struggling to compete for new clients and retain existing ones.

“Investment-only advice … has almost become a commodity. ‘Who can get you better returns’ is a slippery slope and every advisor knows it,” he says. “The value-add is service and broader advice tied to goals.”

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