^^ So true! A buddy of mine works at AXA and he rocks so much Wharton gear at casual networking and community events. Its sad but the clientele he targets wouldnt know any better which makes it even more slimy.
As for the CFP, I recently was at a WH in WM and maybe 10-15% had the CFP. Unless you work in with institutional accounts theres really no need to have any designations. I know very bright people who have it and the hacksaw-i-est people imaginiable that have it. But since its easy enough to get why wouldnt you just to separate yourself from the myraid of competitors out there. To me it means nothing other than that you’re serious about staying in WM for your entire career.
igor?! How dare you!
haha, jk
I have a CFP
The classes aren’t hard except the estate planning class
The comprehensive exam is = Level 1 CFA I’d say. You don’t have to be a genius to do it, but you can’t be a bozo either. Lots of lawyers and CPAs fail it because they get cocky thinking they don’t have to study.
As it pertains to career relevance, it depends on how close you are to retail individuals. if you’re dealing with institutions then you don’t need it.
If you’re dealin with individuals then you need it (if you don’t have a CFA already). What is your excuse going to be when you speak with a prospect? “The test was so easy that I didn’t bother trying”?
And to that guy who said “I hate it when people try to equate the CFP to the CFA”
WIth 10 years of PWM under my belt, I have NEVER met a person (client or advisor) dumb enough to make that comparison. Most CFPs don’t know exactly what the CFA is, but they know it’s hard as balls.
And I’m going on the record right now: if you’re trying to do PWM for individuals, even if they only have 250k in investable assets, you’re NOT A REAL FINANCIAL ADVISOR until you get a credential. I don’t give a shit what you got on your Series 7 or how well you did at your Merrill class.
Very true, except that depends on the designation. When I was in “advisor training” at a bulge bracket firm, they made all of us get the AAMS or the CRPC designations after passing our FINRA exams. These designations were a complete joke and were nothing more than “sheep’s clothing” to make us appear like we were actual professionals and not sales people. The whole “financial advisor” gig is a joke. The requirements to be a financial advisor need to be much more than the series 7 or the series 65. I would push for minimum requrement to be CFP, CPA, JD or CFA. Definitely, I would agree that an advisor at least needs a CFP in order to begin advising clients. There are too many tax and estate planning issues for retail clients that someone with just a Series 65 would not be prepared to deal with without formal trainingg. I would even go on record that the CFA may not even prepare someone to deal with private client issues. The CFA is of course the credential to have when dealing with intistutional clients and or pure investment management/analysis, but when you’re delaing with retail clients I think the CFP is a beneficial credential given the heavy emphasis on tax and estate planning, even though I have bashed it in the past.
A friend of mine is an advisor at Edward. He’s been doing it for few years now and has his own office and manages 60mm and makes good money. He has full discretion on many of the accounts on their wrap accounts where he can trade at his will within the clients’ risk etc etc boundaries. He obviously does not do any equity or market or rates research but gets the papers from third party providers. He has very good understanding of the broad capital markets and economics. He trades and allocate as he sees fit.
His wrap account seems no different than PMs only this time my friend is managing individual clients’ assets not institutional.
My opinion is his career is really good. I mean he is managing portfolios. He is a revenue generator. He is front office. He has CFP. He enjoys his career.
That’s all well and good and I’m sure he’d breeze through the CFA program. But the CFP certainly doesn’t show a level of finance fitness high enough to indicate that he possesses the skill set required for his responsibilities. I’m not suggesting he doesn’t have the skill set. I would just prefer that a PM possess such evidence. Many don’t need such evidence, Buffett for example. But I think the rest of us should possess a credential that demonstrates a basic level of understanding of the the tools of our trade. Safe to assume a charterholder would not have difficulty with any CFP topic and can find the needed information by clicking a mouse. The reverse case would not have as much certainty.
For every one of those guys like your friend, who seems like a legite dude despite working at EJ, there are 50 “advisors” that are no more highly qualified to manage money than used car salesmen.
Yeah my friend and I agree. He said his industry is full of snake oil salesmen. hahaha I almost fell out of my chair when I first heard that.
Having been in the trenches and in the field, I would agree with your comment and I would also agree with your 50:1 to ratio, which may sound like hyperbole to the lay person.
This is absolutely 100% correct and I wish that more people on this forum understood that. For the individual client with 3.0M net worth and a portfolio of 2.0M, getting an extra 1% on the portfolio means nothing if you’re going to piss away $500k in unecessary estate taxes (which happens all the time by the way)
@ mlwl8521
yes I agree. IM is only one componet of a client (investors) overall wealth plan. The Advisor needs to deliver integrated financial planning that incorportaes IM, retirement planning, tax planning, risk mgt and estate planning, as all of these are intertwined.
One of the issues that many investors don’t realize is what services they should be receiving from their Advisor (or what they pay).
In general (at least Canada) to the industry is that the standards to become licensed as an Advisor are not difficult; hence it tends to attract some individuals who really shouldn’t be in the business in the first place. Although I think that this will be addressed over the next few years with some enhancements to the disclosure on cost of service (i.e. CRM2). The big banks are going to be in for a big wake up call, along with hacksaw Advisors (i.e. DSC churners).
If you guys haven’t figure it out yet, the typical financial advisors only talks about investments because
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they’re easier to understand
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they’re easier for clients to understand
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they’re exciting topics for greedy/stupid clients
Talking to the average millionaire about estate planning is like trying to force a 5-year old to eat his broccoli; he doesn’t care whether it’s healthy or not. He just wants to eat his Skittles and watch cartoons all day.
If you held up a sign on the street that says " I know 3 hot stocks that will make you an extra $2,000" you might get some attention from the sheep.
If the sign read " I know how to make sure your kids get an extra $50,000 when you croak" nobody gives a shit
I stumbled upon this discussion and thought I would bring this up. I don’t know what’s the case in the US, but in Canada you can shorttrack CFP if you’re a CFA charterholder, CMA, CGA, etc, or Ph.D. in Finance… Seriously, Ph.D in Finance??? Is the scope of CFP material so hardcore that a M.S. in Finance just won’t do? Is it the same in the US?
The material in the CFP isn’t hard on a standalone basis, but its wide range makes it a challenge.
An MS in finance will prepare you for corporate/institutional finance but it won’t teach you all the stuff individuals need.
Are you implying that Ph.D in Finance will prepare you for all the stuff individuals need?
If M.S. in Finance does not, and as far as I know Ph.D. only implies more concentration in the said field, as opposed to generalization, then what is it about Ph.D. in Finance that qualifies one to fasttrack CFP.
No material in the CFP couse comes close to depth and intensity of even a B.Sc. in finance, so it almost seems a joke to me that they won’t allow somebody with a finance degree fastrack it, unless they hold a Ph. D.
good post but two comments (just my opinion):
i dont think many people fail CFP even if they dont study much, especially those with other post grad designations/degrees. Its easy.
2nd i dont think you need any excuses if you have a CFA especially, no client has ever asked if i have CFP even though it is nowhere on my cards or marketing materials, and never heard about any client asking for a CFP. Most people with CFP on their biz card are on the private banking side of things not advisory.
I can understand your commentary but there’s a few things to point out.
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The stats show that most advisors cannot get the CFP. First off, the pass rate on the comprehensive is only like 54%, and that’s 54% of the people who made it past the 6 intro modules. I’ve met CPAs and seasoned financial advisors who never got up to bat because they couldn’t get past the estate planning module. Is the CFP as exclusive as the CFA? NOT AT ALL. Bottomline: only 1 out of 10 advisors can break the CFP
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You said that most people who have a post grad designations or degrees could pass the exam easily. This *might* be true, but there’s one problem. Do you honestly believe the typical CFP candidate who is trying to hustle widows out of 300k in investments actually has a graduate degree or a respected financial credential? The exam isn’t meant to affirm the next George Soros; it’s there to block Bozo the clown from calling himself a professional.
The “problem” with this forum is that it’s full of accomplished financial professionals who have ambitions of beating the hardest and most prestigious exam in finance, so they mistakenly assume that everyone else is playing at their level of intensity. Let’s just cut to the chase. The average client (individual) is too dumb to realize why this stuff is important and the average advisor is too dumb to pass the test. So you’ve got a bunch of idiots hiring idiots to tell them what they want to hear.
Itsmclovin, i’d be curious to hear what kind of place you work and what the financial wealth/sophistication level is of the clients you work with. What I’ve found in my experience is that
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The poor dumbos (anyone with less than half a million) don’t ask.
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The people with more money (at least half a million) ask about general credentials and experience. They want to see some letters, but don’t know the difference between them. Pretty sure that if you told them you had a Series 7, they’d be impressed.
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The professional referral sources (lawyers and accountants) know damn well to look for the CFP. I can tell you from personal experience and what they tell me personally is that if they see an advisor without a CFP on their business card, they are polite on the phone and at lunch but just trhrow the business card away after.