The issue of designations for financial planners

The CEO of the AIOFP, Peter Johnston, reports on the issue of designations for financial planners.

Over the past 20 years, at the AIOFP, we have constantly asked members at our conferences whether any consumer/client have ever asked whether they held a designation of any description – the answer has been a resounding ‘NO’, not one member over 2 decades.

Whether it be a CFP, CPA or a CFS or any other, it did not matter the answer was still a negative. It has become very clear, consumers do not recognise/appreciate designations and the same sentiment goes for even tertiary qualifications.

It seems consumers just naturally think all Advisers are experienced and qualified to give advice, not a great outcome for consumer savings and protection which recent history can attest to.

The Alex Malley CPA fiasco in 2017, was a classic example of selling the CPA brand to business people who did not technically qualify, but Malley wanted the cash flow to justify his personal revenue/bonus outcome. The same can be said about the grandfathering of CFP Advisers who did not meet the criteria, as long as they paid the fees, they could still use the brand. Even Universities in recent times have received similar criticism for offering courses that appeal to students but have little relevance to the employment market, – consumers/tax – payers ultimately fund the HECS scheme underpinning these courses.

What we have discovered is the true value of a designation, is recognised by the professional/corporate/HR centres of influence, who must decide on whether they will use the services of an Adviser for employees/members of their organisation. These decision makers need a differentiation factor to justify any resolution they come to – no doubt a appropriately structured designation plays a significant role in justifying their decisions. 

In recent times, we have been appointed to an Industry Fund and in discussion with other organisations where our Certified Financial Strategist [CFS] designation has played a pivotal role. The CFS eligibility criteria has resonated with the decision makers.

CFS is not just about tertiary qualifications of an Adviser, it’s about their experience and how they have mitigated risk, and eliminated conflicts of interest when dispensing Advice.

For example, what is the value of elite tertiary qualifications when the Adviser works for a Financial Institution or new to the industry? Can a consumer trust product Advice when the Advisers research information is conflicted by product manufacturers paying the research organisation to rate their own products? Does the Adviser work for an independently owned group? Furthermore, does the Adviser have adequate PI cover if things don’t go according to plan?

All these factors are critical to selecting an Adviser, that has the capacity to work efficiently in the best interests of consumers, and gives key centres of influence the confidence and comfort they have made the right decision.

Over the next few weeks, you will receive some CFS brochures via the post you may wish to display in your reception if you decide to qualify as a CFS accredited Adviser. CFS Advisers will have a choice to either pay a nominal yearly fee to maintain the designation or pay an additional fee to receive new client opportunities, the fee level will be decided by the AIOFP Board shortly. Unlike others, the CFS is transferrable if you no longer stay a member of the AIOFP.

More information shortly.


Peter Johnston | Executive Director
Association of Independently Owned Financial Professionals
Suite 1211, 1 Queens Road, Melbourne VIC 3004
P 1800 111 203, d 03 9863 7574, m 0418 857 621 | Download my business card

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