History of Certifications in Financial Planning Across The Globe
The lack of regulation of financial planning has prompted numerous independent organizations to create certification programs for professionals in the field, often in connection with a registered trademark. The programs can include education and work experience/apprenticeship requirements, ethical standards, competency testing, disciplinary/complaint processes and continuing education. Those who meet the requirements of the certification process, and who pay membership and/or licensing fees associated with use of the certification mark, are able to use the organization's designation when marketing their services.
One of the oldest financial planning certification programs is that associated with the CFP trademark, which has been in use since 1970 and was registered as a trademark in the US in 2002. The Certified Financial Planning Board of Standards, Inc., based in Washington, D.C. owns the CFP marks within the United States. The CFP marks are owned outside of the United States by Financial Planning Standards Board (FPSB), a non-profit standards-setting body based in Denver, Colorado. CFP is an acronym for "Certified Financial Planner," a phrase whose attempted registration as a certification mark was denied by the US Patent and Trademark Office on the grounds that it the phrase is a merely descriptive mark.
CFP Board was founded in July 1985 as the International Board of Standards and Practices for Certified Financial Planners, Inc., (IBCFP) by the College for Financial Planning (College) and the Institute of Certified Financial Planners (ICFP). The IBCFP became Certified Financial Planner Board of Standards Inc. (CFP Board) on February 1, 1994. As a professional regulatory organization acting in the public interest by fostering professional standards in personal financial planning, the CFP Board establishes and enforces education, examination, experience and ethics requirements for CFP certificants. The CFP mark is promoted worldwide through member associations such as the Financial Planning Associations.
The Chartered Financial Consultant (ChFC) is the "Advanced Financial Planning" designation conferred by The American College. The ChFC professional is qualified to assist individuals, professionals, and small-business owners with comprehensive financial planning, including insurance, income taxation, retirement planning, investments, and estate planning. The ChFC curriculum provides the most extensive education of the widely recognized financial planning designations, requiring nine courses, each of which is followed by an exam. Six of the nine courses are the same courses required for a CFP candidate; therefore, one who passes their CFP certification exam can, in many cases, go on to earn their ChFC by successfully completing the three additional courses and exams. To date, more than 41,000 individuals have attained this distinction. This designation has also spread to Asia, where designees are found in countries like Singapore, Malaysia, Indonesia, China and Hong Kong.
The Fellow Chartered Financial Practitioner (FChFP) designation was developed by the National Association of Malaysian Life Insurance and Financial Advisors (NAMLIFA) in 1996. The designation was adopted by the Asia Pacific Financial Services Association (APFinSA) in 2001 as the unified designation for its member associations in 11 countries.
The Registered Financial Planners Institute (RFPI) formed in 1983 in the United States to promote professionalism among those who are or will be active in the field of financial planning for individuals and businesses. The RFPI is an international organization with chapters and members throughout the world. The RFPI offers study programs both in classroom conducted seminars and correspondence courses. RFPI is a collective membership of financial planners and is designed to serve the interest of both its members and the general public in matters relating to financial planning. RFPI recognizes qualified individuals by designation of RFP or SRFP who are in the financial planning field. This includes insurance, attorneys, real estate, bankers, CPAs, stock brokers, securities, or other professionals licensed in similar fields that can properly financial plan individuals or businesses in their related fields. In a separate development, the Malaysian Financial Planning Council, incidentally also introduced a professional designation for financial planners called Registered Financial Planner (RFP) in 2004, which was recognised by the regulatory bodies, Bank Negara and Securities Commission in the country for the purpose of licensing financial planner.
The Personal Financial Specialist (PFS) credential was established for CPAs in the United States who specialize in personal financial planning. The credential is awarded exclusively to members of the American Institute of Certified Public Accountants (AICPA) who have demonstrated considerable experience and expertise in that area. As of today, the AICPA has granted approximately 5,000 CPA/PFS credentials.
In Australia, the financial planning specialisation, CPA (FPS), is available to those members of CPA Australia who can demonstrate their eligibility through experience and education within the financial services industry.
The objectives of the FPS designation are to:
- achieve public recognition for those who hold the specialisation;
- enhance the quality of financial planning services that members provide; and
- increase practice development and career opportunities for CPAs.
The FPS designation is available to CPAs, and is based on a points system, where a minimum of 100 points must be accrued. Although all CPA Australia members who provide financial product advice must be licensed by ASIC, a member need not be licensed to first obtain the CPA (FPS) designation.
In Europe, the €uropean Financial Planner (€FP) designation conferred by the €uropean Financial Planning Association (€FPA) is gaining ground as a financial planning certification mark. The €FPA is the largest professional and educational organisation for financial planners and financial advisors in Europe and is the only Financial Planning Association created solely in the interest of European financial planning consumers and practitioners.
Globally, the Chartered Wealth Manager (CWM) is one of the fastest growing financial planner specializations focused on developing critical relationship management skills for financial planners and advisors. The designation is conferred by the Board of Standards of the American Academy of Financial Management in 145 countries.
The rest of the certification qualifications related to financial planning include: Fellow, Financial Services Institute (conferred by LOMA, USA); the Certified Private Banker designation (conferred by the American Academy of Financial Management); the Certified Financial Marketing Consultant (CFMC) conferred by the Institute of Marketing Malaysia.
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