CFP designation

important notice for current & future CFP students

Advocis — Sun, 30 Aug 2009 18:48:46 GMT

Not too long ago, the Financial Planners Standards Council (FPSC) has officially announced changes to its Certified Financial Planner® certification program, which take effect July 1, 2010.

Anyone planning to write the CFP certification exam in November 2009 or June 2010 should consider this preparation course.should consider prepping with Course 5 of the CFP® Education Program from Advocis® and CCH

If you fit one of the following categories, Course 5 can help you get the knowledge and confidence to succeed:

· you hold a CLU® designation

· you hold an approved prior credential

· you’re currently an in-stream CFP student

· you’re planning to take another attempt at the CFP certification exam

Click here to learn more.

originally posted August 4, 2009

Advocis, advisors & planners, and Dwight Duncan

Advocis — Tue, 20 Jan 2009 19:51:17 GMT

Regulation and the upcoming provincial budget

The current issue of Investment Executive has an article by Megan Harman which outlines Advocis’ position on the need to reduce the regulatory burden faced by advisors and planners in Ontario.

You’re probably aware that Advocis is urging Ontario Finance Minister Dwight Duncan to use this year’s provincial budget as a platform to deal with the regulatory hurdles advisors and planners face.

Advocis’ pre-budget submission to Duncan made the case for the Ministry of Finance to increase its oversight of provincial regulators, especially in regard to the regulation financial advisors and planners routinely experience, as well as the need to protect Ontario consumers with regulation that does not adversely affect their ability to access competent and efficacious financial planning and advice.

Greg Pollock, Advocis president and CEO, is quoted at length in the article:

We are not asking for a handout or a subsidy… Our members simply want to do business in a regulatory environment that not only protects the public, but also ensures that advisors and planners are not hampered by unnecessary and inefficient regulation…

In addition to smart regulation—not one-size-fits-all regulation, we need to see more and better proof of the need for additional regulation. Our members see the regulation but seldom see any indication of an understanding of the size of the problem the regulation is intended to address. A cost-benefit analysis from the regulator about the benefits of protecting the consumer against the increased burden of compliance costs to the financial advisor or planner would go a long way.

Smarter regulation that’s backed by a convincing cost-benefit analysis in the consumer interest: we can think of no better time that the right now for this concept to gain purchase in the Ministry of Finance’s offices. For the moment, we will await Duncan’s budget and see what he does.

Click here for to read the entire article online at Investment Executive.

Helping new advisors helps us all

Advocis — Fri, 04 Jul 2008 16:36:02 GMT

Mentoring listed as key MDRT goal

Last week the incoming president of the Million Dollar Round Table, Walton Rogers, asserted that mentoring new advisors results in a productive boon for all concerned, according to Vera Ovanin in Investment Executive. Rogers was speaking to delegates at the MDRT’s annual meeting in Toronto.

That’s why the MDRT is considering expanding mentoring programs, with one of the aims being to help enable more agents reach the MDRT’s rather lofty standards.

Rogers’ vision of mentoring seems to be informed by two themes, only one of which Rogers mentions explicitly, but there is also, I think, one that is implicit in the more general remarks he made to the attendees.

The first driver behind the expanding the mentoring program is purely pragmatic: good mentoring “increases everyone’s production—the advisor benefits, the client benefits and the [neophyte advisor] benefits.”

The second is not so readily apparent, since it is much more abstract: it is the idea that mentoring newcomers to financial advising and thereby helping the consumer is simply the right thing to do, and it is a valuable—and satisfying—end in itself.

In this vein, Rogers describes clients as marooned on a deserted island, with the result that “It is up to us” to provide them with the “right lifeboat” they need. And this vision of the advisor’s relation to the client this prompts Rogers to wax philosophical: “You may be thinking that the world is a cold, crowded place, wondering, ‘What can I do?’ The answer is you can build a better you.”

Consider again Rick McKenster’s blog post of several weeks ago, in which he suggests the value of the advisor lies in being able to answer the big “what if” questions: Doesn’t Rogers’ musing aloud about the place of the advisor’s role in the larger scheme of things situate on a higher plane both the functional utility and the larger life-enhancing value-add that good advisory work is all about?

Or, in Rogers’ own words, in which he echoed the theme of the Toronto conference: “At MDRT, we change lives.”

On a personal note, Rogers shared his own plan for success, which lies achieving the best allocation of education, career, finances, health, family, community service, and spirituality.

On September 1, the 34-year Rogers, who hails from Annapolis, Maryland, will become the MDRT’s 83rd president.

Any readers out there who have been or are currently in a mentor-mentee relationship? If so, please share your thoughts!

For the complete article from Investment Advisor, click here.

The multi-generational advisor

Advocis — Fri, 27 Jun 2008 17:29:11 GMT

Legacy planning helps transfer values and wealth

Our last post raised the topic of advisor specialization. Following up on that topic, a recent piece in Investment Executive caught our eye, when Neil Acharya reported the comments of Michael Babikian, Vice-President of Transamerica Insurance and Investments Group, at this month’s Million Dollar Round Table annual meeting in Toronto.

Babikian’s subject was on ways financial planners can turn themselves into multi-generational advisors by successfully transferring the wealth of their high net worth clients from one generation to another. While most advisors are quite familiar with the methods employed by traditional estate planning, legacy planning is also a useful tool which more advisors should be comfortable using.

Of course, Babikian noted that a significant difference exists between legacy planning and good old-fashioned estate planning: “Estate planning is transferring wealth in the most tax efficient manner, legacy planning incorporates family values… as planners we make sure wealth transfers efficiently and effectively from generation one to two, but we don’t prepare the family for the money,” according to Babikian. As a result, legacy planning is driven by something more a concern about tax avoidance: “Tax is not the major cause of money loss. A planner for a high-net worth client is in risk mitigation.”

All of which suggests to us that, from the point of view of this blog, legacy planning nicely illustrates the point Rick McKenster made several posts ago about the true value of the CLU designation residing in what it enables the advisor to do for the client, especially on a level that goes deeper than just assets and planning, and that provides answers to the plethora of “what if” questions that major life events always bring with them.

As an example, consider the something that all seasoned advisors are familiar with—the delicate issue of estate planning, which is all too often shot through with sibling rivalries and resentments. Most clients are reluctant to raise the matter at all, at least until it is almost too late. But legacy planning gives advisors a way to transform estate planning into a process that is as much about the family’s own values and history—and how to preserve those intangibles—as it is about preserving the family’s tangible wealth. As Babikian asked, “how many people out there know their great-grandparents names? Not many. How many people out there would, if they got a cheque every month from them?”

Babikian further observed that many high net worth clients often express a two-fold anxiety about their inheritors: “Clients fear their children are not going to live as well as they do, but they also fear that they will spoil them.”

One remedy for this problem that advisors can offer to their clients is the “incentive trust,” which can function as a means to keep alive the client’s own sense of family values and vision, to extend their own personal philosophy of life well beyond their own life. Babikian’s example was a client who placed great value on education. The legacy plan ensured that any benefactors who pursued an academic career would have their salaries matched dollar for dollar. One can be sure the children of those academics will grow up infused with the grandparent’s veneration of higher learning.

On a more prosaic level, the incentive trust can provide a useful means to breaking the cycle of one of estate planning’s most dire problems, that of assets disappearing before they can be transferred from “generation one” to “generation three.” Babikian offered the eye-opening U.S. statistic that only 6% of wealth is transferred from grandparents to their grandchildren. The rest? Gone in a generation.

What are your thoughts about legacy planning? Are there any readers out there who have been doing it?

To read Neil Acharya’s article in its entirety, please click here.

Becoming the advisor of choice

Advocis — Wed, 25 Jun 2008 19:44:59 GMT

A narrow niche can be the best path to success

A recent National Post column by Jonathan Chevreau profiles the path to success taken by one CFP holder, BMO Nesbitt Burns managing director and senior vice-president Michael Dorfman, who opened the Top Advisor Summit in Toronto earlier this month. According to the article, the secret of Dorfman’s rise to riches is his ability to find the niche opportunity no one else has yet discovered, and then mine it so “the strategy [becomes] a self-fulfilling prophecy.”

Of interest to CLUs is the basic premise of the article: while the vast majority of financial advisors continue to operate as generalists, by choosing a niche compatible with your personality and interests you can position yourself to become the proverbial—and sought-after—“advisor of choice.”

To harness the power of niche positioning, Dorfman suggests choosing a group whose values you share and that is "relatively under-served" …. which can mean "looking beyond the obvious."

According to Dorfman, a good starting point is to review your existing book of business, determine who your favourite clients are, and from their commonalities come up with your niche category, one that reflects your own personality, values and interests. Then "no matter what the niche, network like mad.... niche marketing works.”

Chevreau’s profile offers this final bit of advice, which should be of interest to CLUs past and future: “you need to take a commitment to the profession seriously and work industriously to acquire multiple professional designations.”

One wonders how many new advisors are currently exploring or at least contemplating the possibilities of niche marketing, as well as how many plan to forge ahead as generalists.

Also of interest is the possibility for transition from niche to mainstream, when the demand driving the niche market grows beyond its confines to become a more mainstream demand. Typically the demand for this transition product or service continues to expand until its owners or dealers recognize it as worthy of marketing to a broader population.

In this regard, the demographic projections of Canada’s aging population suggest that the area of living benefits—and the concomitant Registered Health Underwriter designation offered by Advocis—will soon become a potentially lucrative niche, and one with the definite promise to eventually become a bigger marketing opportunity with a wider appeal to the fast-aging population at large.

Now I’d like to find out what’s worked for the blog’s readers in marketing their advisor services.

Has anyone positioned their practice as a niche specialist—for example, specializing in the senior marketplace by dealing with annuities and health care insurance?

All successful niche marketing secrets and experiences—successful or otherwise—are most welcome.

To read Jonathan Chevreau’s column on Michael Dorfman in its entirety, please click here.

Professional designations and the advisor

Advocis — Fri, 06 Jun 2008 20:31:45 GMT

Is the recent downward trend evidence of cost-cutting?

A recent article in Investment Executive reported the results of the Investment Executive 2008 Dealers’ Report Card. Among other trends noted, it seems that fewer advisors are getting financial planning designations:

Not even the certified financial planner designation has been spared. The percentage of advisors holding a CFP has dropped to 44% in the 2008 Report Card, from 54% in 2004. The percentage of those holding the registered financial planner designation fell to 4% this year from 7% in 2004, and the percentage of those who have completed the professional financial planner course has plummeted to 1% from 10% four years ago. IE didn’t ask advisors in 2004 whether they completed the personal financial planner program, but only 2% of advisors surveyed this year have. (Combined, the total percentage of advisors holding either related designation totals 3%, which is still a steep decline from 2004.)

The result is surprising to many, mainly because it seems counter-intuitive, given how many companies promote to the public their financial planning expertise and comprehensive wealth-management strategies.

Can this downward trend be accounted for by the fact that some firms now grant their advisors a wide degree of independence in assessing how they should best meet the needs of their clients?

Or are these firms trying to cut back on the time and money devoted to professional training?

Based on your own experience, where do you think the answer lies?

For the full story from Investment Executive, click here.

On CLUs, CFPs, designations, and who does what

Advocis — Tue, 27 May 2008 17:11:32 GMT

Who governs what and where CLUs stand regarding the CFP designation

As most of you know, the Certified Financial Planner or CFP® course deals with the provision of financial advice and the CFP designation is governed by the Financial Planners Standards Council (FPSC).

Conversely, the Chartered Life Underwriter or CLU™ course deals with wealth transfer and estate planning, and the CLU designation itself is governed by the CLU Institute.

However, the CFP education program is integrated with the CLU program and students who complete the CFP component can challenge the FPSC’s CFP exam.

As noted, the CFP mark is owned by the FPSC, who have very stringent requirements for obtaining the CFP designation license. The fundamental requirement is to take and pass the CFP exam. Advocis does not have the permission or authority to waive that requirement.

This means that one of the commentators on our inaugural post, a CLU designate named Bob White, can in his capacity as a CLU challenge the CFP exam without taking a qualifying education program. Indeed, Mr. White may want to consider just that opportunity.

CLU™ is a trademark of The Financial Advisors Association of Canada. CFP™ is a certification mark owned outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). Financial Planners Standards Council is the marks licensing authority for the CFP marks in Canada, through agreement with FPSB.

Only 15% of retirees living their dreams

Advocis — Tue, 13 May 2008 16:18:37 GMT

Too much faith in the future or too little forethought?

Most of us are do it-your-selfers when it comes to retirement.

In a recent cross-Canada survey conducted for TD Waterhouse, 43% of retirees responded that they had planned properly and saved sufficiently, yet just 15% reported that they were realizing their retirement dreams. Moreover, the survey found that fully 62% of current retirees had not done their retirement planning with the help of a professional advisor, and roughly a third of them did not plan for their retirement at all.

So if a third of retirees can decide by an act of omission or commission to avoid even minimal retirement planning, does this survey not suggest a larger issue – namely, that today’s advisor can and should work harder to persuade people now entering the workforce to begin planning and saving for their retirement today?

Or is it simply a sad fact of human nature that some people will always put off planning for the future until it is too late?

Surely a survey that suggests that 85% of retirees are not living their retirement dream points to a larger issue…. perhaps it is not a lack of available, helpful advice but simply an absence of realistic expectations regarding what retirement is about. What do you think?

And finally, for those of you beginning your advisor careers, you understand all too well the difficulties of choosing between spending today versus saving for tomorrow: so, the payoff question for you is – are you saving enough?

Click here and scroll down to read the entire article “Save early, plan your lifestyle, retirees say” at Advisor.ca.

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Survey says CFPs now planning less

Advocis — Mon, 12 May 2008 18:11:37 GMT

From Investment Executive, May 5, 2008:

Financial planners caught in a Catch-22

Consumers prefer commission-based fees, but this reinforces the “sales” reputation of planners

By Regan Ray

From 2004 to 2006, the survey showed CFPs have, in fact, been doing less financial planning. Only 59% said they provided the service to over 50% of their clients in 2006, compared with 71% in 2004.

The survey results prompted Cary List, president and CEO of the FPSC, to ask “Can we do something to reverse this trend or do we want to? Do we care?”

In light of the survey results and Mr. List’s questions, what do you think the future has in store for CFPs?

Beyond comprehensive financial planning, what services can or should CFPs offer their clients?

Click here for the full story from Investment Executive.

To comment on this article, or see others' comments, click on "Feedback" above, or on the title of the posting.