Market uncertainty can drive investors to make short-sighted decisions. Today’s perfect storm of high inflation, rising interest rates and struggles in the banking sector has created another period of uncertainty that has spiked investor anxiety.
During turbulent times like these, financial advisors have the opportunity to shine by demonstrating their value to their clients—both as financial planners and as trusted personal advisors. We’ve found that investors are eager for and benefit from competent and ethical financial advice that helps them navigate unstable markets and economic conditions. And CFP professionals are uniquely positioned to meet this rising demand for individualized service.
How Advisors Can Differentiate Themselves From The Competition
The demand for financial advice has never been greater among consumers. In fact, according to recent data from the CFP Board Consumer Sentiment Survey—Cost of Living, adults under age 45 are increasingly concerned about their future financial picture, with 38% of young investors expected to seek the counsel of a financial planner in the future.
Despite investors’ desire and need for competent and ethical financial advice, investors are understandably confused about whom to turn to when seeking advice. In fact, according to Finra, there are more than 200 professional designations for financial planners, with over half of these designations including “certified” or “accredited” in the title. Of these designations, only 3% are accredited by a third-party body.
Standing out in a crowded (and confusing) market is difficult, but not impossible. One way to rise above the noise is by obtaining the CFP certification, considered the most prestigious certification in financial planning. At CFP Board, we are committed to ensuring that CFP certification is the standard for competent and ethical financial planning. Our rigorous requirements for earning the CFP mark set the stage for CFP professionals to provide the highest levels of competency and professionalism to meet their clients’ needs during periods of economic uncertainty.
In an annual independent brand tracking study, consumers repeatedly report they are more aware of CFP certification than other certifications and designations—including the CFA, ChFC, CLU and PFS designations—and that they are more satisfied when working with a CFP professional. On top of that, the benefits of CFP certification extend beyond consumer awareness and satisfaction to revenue growth. According to the 2022 Kitces Research study, “How Financial Planners Actually Market Their Services,” financial planners without the CFP mark spend more time on marketing than CFP professionals do. Those with CFP certification were also found to spend less on client acquisition—while experiencing greater revenue growth.
Why You’ve Gotta Be A CFP
Behind the CFP marks is an active and engaged public awareness campaign created to educate the public on the importance of working with a CFP professional. Our new advertising campaign—IT’S GOTTA BE A CFP—is more than just a catchy slogan. It’s intended to emphasize the rigorous education and testing required to become a CFP professional, as well as the ethical standards that CFP professionals are held to. Those three letters (C-F-P) next to a financial planner’s name signify that they have made a commitment to put their client’s interest first at all times.
By emphasizing the ethical standards that CFP professionals must adhere to, the campaign not only helps build trust among potential clients, but also makes CFP professionals more attractive to potential clients. As a result, individuals seeking financial advice are more likely to prioritize working with a CFP professional over other types of financial advisors. And that can lead to an increased demand for CFP professionals and more clients for those who hold the designation.
How Evolving Standards Help CFP Professionals Meet Consumer Needs
Financial planning isn’t a static profession, and best practices must evolve as products, markets and client attitudes change. That’s why CFP Board regularly evaluates and updates its certification requirements to ensure that CFP professionals are prepared to tackle the most pressing issues facing clients today.
To ensure that CFP professionals are able to provide the highest possible value for investors, updated competency and ethical standards are essential to ensuring that CFP certification remains the standard in the financial planning profession. To this end, CFP Board is reexamining our competency standards to maintain the value and relevance of CFP certification for those who pursue and hold the mark.
CFP Board regularly reviews certification requirements. In 2018, we updated our Code of Ethics and Standards of Conduct. Today, we have established a Competency Standards Commission to review and evaluate CFP Board’s competency requirements for education, examination, experience, and continuing education. CFP Board Chair Dan Moisand explains why we are undertaking this review: “The financial advice ecosystem recognizes CFP certification as the standard for financial planning and expects CFP Board to remain current. Periodic review of the competency standards is a core business function of a certifying organization. The Competency Standards Commission will look at not only the appropriateness of each requirement, but also at how the requirements work together to ensure financial planning competency.”
In addition, CFP Board continues to arm CFP professionals with the skills they need to help clients move forward despite market conditions. We recently added a new topic to our education requirements: Psychology of Financial Planning. With an emphasis on the emotional and interpersonal aspects of financial planning, the topic further prepares CFP professionals to counsel clients who are experiencing monetary conflict or financial stress. By adding this important behavioral component to our comprehensive coursework, CFP Board continues to guide the evolution of the financial planning profession.
Obtaining CFP certification isn’t easy, and that’s intentional. No other certification covers the same breadth and depth of topics and client service for financial advisors. For advisors looking to better serve their clients and stand out amid challenging market conditions, YOU GOTTA BE A CFP.
Kevin Keller is chief executive officer of CFP Board.