124 Certified Financial Planners do very little Planning

The Certified Financial Planner designation stands as a testament of one’s dedication to excellence and superiority in the world of financial planning. Or at least that’s what the CFP Board and the designees want you to believe. And they’ve done a good job convincing the world that CFP® holders are the wise wizards of the retail financial services industry.

Our personal experience, however, hasn’t quite match up with the marketing machine’s hype…

P-L-A-N-N-E-R spells Money Manager!

One of our most frustrating experiences with most CFP® holders has been their general lack of…well…planning. One would think that those who hold the emblazoned mark would be regularly and intimately engaged in the business of financial planning. But nothing could be further from the truth.

In fact, most of the CFP’s we run across are wildly more interested in commission or fee (a really sneaky word to conceal that you basically just work on commissions) based products. And while there is certainly nothing wrong with a business model that makes the vast majority of its income from commissions (I have one) it’s quite disingenuous to hold yourself out to the public as a “planner” and yet eschew the responsibilities or even the basic task of planning.

Instead we find most people who hold the designation are much happier gathering assets under management so they can collect commiss fees. And those fees roll in each quarter without one evening having to lift a finger—you can get paid and hangout on the golf course all at the same time.

Designations are Mostly for MarketingCertified Financial Planner

It saddens me to admit it, but designations that exist in the financial services industry (all the letters that we see after someone’s name) are mostly marketing fluff. That’s not to say that these designations don’t offer some really good education to people, they do. But most agents/brokers/advisors/etc. don’t actually read through the material they are supposed to in order to complete the designation.

Instead they purchase the 100 or so dollar cram guide and memorize just enough to pass the test to “earn” the designation. As a former career insurance agent, I can tell you the industry is well aware of this. I was told to get my designations, because it would make people want to do business with me. Why? Because letters after anyone’s name are impressive and command attention. What those letters are and mean is of little if any importance.

And this shows…

We’ve met many highly…”credentialed”…individuals who laughably stumble through fairly simple financial planning concepts. From thinking that just because your income crosses a certain level within the six figures you should just magically buy whole life insurance instead of term insurance, to believing that just because you are married, you automatically get double the estate tax exemption just yourself…sad.

So why am I a Student at the American College

As I write this I’m a matriculated student at the American College of Financial Services. I have been for a while now, and really need to get back to my Chartered Life Underwriter course work before their five year rule makes the money I spent a total waste of time—I’m busy and I refuse to buy the cram guides.

And get this, one day I’ll probably challenge the CFP exam and become a charter holder—if the CFP Board will let me in after I bad mouth the designation : D

I believe in education and I think everyone benefits from striving for as much new perspective and education as possible. Ultimately, it’s all about what you make of it. If practitioners within this industry choose to acquire a designation solely to say they have one in an attempt to trick people into trusting them more, that’s their loss. Unfortunately is can hurt innocent consumers, but there are a lot of other things out there that can hurt them as well.

My point in all of this is very simple. Don’t allow yourself to be wooed by a designation. These things are, unfortunately, not all that costly to fake and everyone needs to be much more skeptical of the advice and guidance they seek from agents/brokers/advisors. Regretfully the certified financial planner designation does not guarantee an awesome practitioner.

7 Responses to “124 Certified Financial Planners do very little Planning”

  1. Steve Stanganelli says:

    Absolutely true and wholeheartedly agree. Unfortunately, most who hold the CFP(R) designation want to manage assets only. This is why I advocate (and use) a model that breaks out planning advice from asset management. And I have many clients who I don’t ‘manage’ a dime of their money.

  2. DHK says:

    I happened to have used these DVD study aids to help me obtain my ChFC. These are really good. I’m more of an audio/visual learner myself:


    • Brandon Roberts says:

      But by the sounds of it, you used these aids to help you actually learn what you were supposed to be learning about. Not as a cliff notes style get me through this as quick as possible. This is probably the true intention behind a lot of them. Unfortunately, many have learned that it’s also a method to get a high enough score to pass, and they they can move on.

  3. Cary Cates says:

    I am disappointed by this post. I am a CFP and my main task is financial planning at our firm. That you would disparage the CFP designation for no reason other than you met some who weren’t upstanding is ridiculous. I have been researching blending WL policies to see if they might make a good substitute or complement to fixed income holdings and your posts up to now have been intriguing (though light on hard details; suspect you don’t want to give the business away).

    I think what you may misunderstand in the fee vs commision discussion is the idea of conflict of interest. If a planner uses an AUM fee they get paid the same on any investment but make more when the client makes more (by growing the assets). On the other hand, if they work only on commission there is a huge conflict (which you acknowledge in other posts) around who the product benefits, client or advisor/agent. I.e. Blending a whole life vs all base whole life for an agent; non-traded REIT vs a REIT ETF for an investment advisor. An AUM fee also has conflicts of interest, admittedly, though they are less than commissions and the client can clearly see what they pay us.

    I think you should be more tactful in this post. I’ve run accross a better proportion of CFPs working in clients overall best interest than insurance agents (especially those arrogant agents from the large mutual I will not name).

    I would love to learn more about the specifics of blending policies and how that might help our clients, if you have time to talk to me.

    • Brandon Roberts says:

      Cary, a little advice. There is no need in getting offended by one’s criticizing a group that you belong to if you yourself do not happen to be in violation of the items that are pointed out in the criticism. Hate me all you want for what I said, but there are plenty of people who hold the CFP designation for no other reason than marketing and could care less about what the CFP really stands for.

      If that’s not you, then you have nothing to be disappointed in. I am a licensed insurance broker and lots of people have lots of negative things to say about people who hold an insurance license. And I agree with a lot of those negative things.

      Be part of the solution. Step one is admitting there is a problem.

      • Cary Cates says:

        The problem is there is no perfect way to operate in the financial services business and there are always people who don’t operate with the client’s best interest at heart, CFPs included. Reading your post makes it sound like CFPs are mostly a den of snakes when I’d argue most are upstanding who do clients’ interests first.

        By your lack of response, should I assume you are not interested in helping us give our clients the best options available by speaking to me about the art of blending WL insurance? I appreciate your time.

        I hope I did not offend you and apologize if I did.

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