Chartered Financial Planner

The title Chartered Financial Planner is the most widely accepted "gold standard" qualification available for professional financial planners/ financial advisers in the United Kingdom. Only about 10% of Financial Advisers hold this title; those that do are the most qualified professionals in addition to having the best experience. At July 2013 there were 32,690 advisers in the UK; as of October 2014, there are 4,303 individuals who hold the title Chartered Financial Planner. Over 300 firms can now boast the corporate equivalent as Chartered Financial Planners.

The titles of Chartered Financial Planner and Chartered Financial Planners ware granted by the Chartered Insurance Institute (CII). The Privy Council authorised the CII to issue the Chartered title in 2005. Thus, a Chartered Financial Planner now carries equivalent qualifications and other established professions such as Chartered Accountants and Chartered Surveyors, etc. Membership of the Personal Finance Society, the leading professional body for financial planners, is required to be able to use the professional designation Chartered Financial Planner.

The qualification fits into the National Qualifications Framework at Level 6, equivalent to a Bachelors (first) Degree.

Requirements

To attain Chartered Financial Planner status as an individual, one must study for and pass approximately 14 exams in various aspects of financial services and related subjects. Each exam offered by the Chartered Insurance Institute carries a certain number of "credits" in their qualification scheme. Credits can also be granted for equivalent exams passed form other awarding bodies. A total of 290 credits is required before Chartered status can be applied for. This generally takes several years to achieve.

One is also required to have five years relevant professional experience, and to demonstrate ongoing learning by completing a certain amount of Continued Professional Development each year. In addition, one is required to be a member of the Personal Finance Society, the professional body for Financial Planners, part of the CII Group.

Corporate Chartered Status

In addition, firms that can demonstrate the highest commitment to professional standards can apply for Chartered Financial Planners status. At the end of November 2010 there were 300 firms authorised to use the title.

Retail Distribution Review

This review of the financial advice/planning profession begun by the UK regulator, the Financial Services Authority, in 2006 was completed in 2012. Its recommended changes came into force on 31 December 2012 and is binding on all Financial Advisers. Among other aspects of the financial advice profession reviewed was the level of qualifications historically and currently held by practising financial advisers. For about 25 years, the minimum standard has been only the Certificate in Financial Planning, formerly called the Financial Planning Certificate, which sits at Level 3 in the National Qualifications Framework, equivalent to an A level.

After various discussion papers and consultations,the FSA has stopped short of requiring advisers to obtain a Level 6 (degree level) qualification such as Chartered Financial Planner, and require advisers to obtain a level 4 qualification (equivalent to the first year of a degree), by the end of 2012.

Some of the RDR’s key points are :

People will now have to pay for investment advice. No commission will be paid from product providers to financial advisers for investments introduced to product providers.

Investors know up front how much advice is going to cost and how they will pay for it. Financial advisers can either be independent or restricted.

Following the changes, financial advisers that provide ‘independent’ advice now have to consider all types of investment areas. They can also consider products from all firms across the market. An adviser that has chosen to offer ‘restricted’ advice can only consider certain products, certain product providers or both.

People must be able to identify and understand the service they are being offered.

All investment advisors will be qualified to a new, higher level which is regarded as equivalent to the first year of a degree (although they may be more highly qualified e.g. Chartered Financial Planner equivalent to Honours degree standard).

Other Qualifications in the Financial Advice Profession

ISO 22222 Certification

BS ISO 22222 Financial Planner Certification confirms a financial planner’s conformity to the international ISO financial planning standards. The Certification is a personal award and applies to individual Financial Planners. The standard defines six steps of the personal financial planning process:

1. Establishing and defining the client and personal financial planner relationship.
2. Gathering client data and determining goals and expectations.
3. Analysing and evaluating the client's financial status.
4. Developing and presenting the financial plan.
5. Implementing the financial planning recommendations.
6. Monitoring the financial plan and the financial planning relationship.

Benefitsof BS ISO22222 certification

• Demonstrates that a Financial Planner’s advice skills & knowledge have been benchmarked against an international standard
• The Financial Planner will receive independent validation of their skills
• Developmental feedback will be provided to the Financial Planner on both their technical & soft skills
• BS ISO22222 Certification assists in enhancing customer confidence in the Financial Planner’s abilities

It remains the only external inspection of the quality of the actual advice given and the processes and systems used to deliver it. Holders of the BS ISO22222 standard are subject to regular external monitoring and surveillance. The accreditation process is the most detailed assessment of quality and service provided to the client.

CERTIFIED FINANCIAL PLANNER, CFP

One of the most widely used standards adopted by practising financial planners in several countries is the CFP service mark which originates in the United States. However, each country has its own rules and laws about how this certification can be used in promoting or practising financial planning (for reasons of consumer protection and to comply with local financial services legislation). For example, in the UK, it is conferred by the Institute of Financial Planning and the FPSB UK, now an accredited body for awarding qualifications on the Qualifications and Credit Framework (QCF).

CFP is awarded in each country by the locally licensed financial planning, or other professional body, to members of those bodies as a certificate for passing the necessary exams as well as the practical assessment of their ability to put together a financial planning report of a certain standard. The use of the CFP certification is as a licence, renewed annually subject to good conduct and the necessary CPD achievement, as well as the approval by the relevant national jurisdiction to practise as a financial planner or advisor in that jurisdiction alone. It enables the financial planner to use the mark in its marketing material and is overseen by the FPSB the master licensing body in the United States. It is currently administered in 23 countries by the local licencors (organisations similar to the IFP) with over 126,000 CFP licensees globally who advise the public on the full range of personal financial planning topics.

Equivalent titles Abroad

In the United States, the equivalent title to Chartered Financial Planner is the Certified Financial Planner.

The MFP Master Financial Planner designation from the American Academy of Financial Management is also the graduate designation for financial planners. The MFP is a federal trademarked designation in the United States which requires accredited exams and degrees.

External links

• Chartered Insurance Institute: information on Chartered Status
• DirectGov: details of National Qualifications Framework
• FSA website- information about Retail Distribution Review
• IFA search tool run by the CII/PFS, allowing customers to filter by Chartered Financial Planners only
• The IFP- information on Certified Financial Planner status