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Dealer groups are increasingly recruiting and training Certified Financial Planners (CFP) in an attempt to guard against possible breaches of regulation and develop a more professional, robust business in the current market environment.
Data gathered in the Money Management/CoreData Top 100 Dealer Groups survey shows that one in three of the industry’s largest dealer groups have boosted CFP numbers over the past 12 months.
The Financial Planning Association (FPA) awarded more than 260 new CFP designations over the past year, while a further 460 plus CFPs were identified in this year’s Top 100 Dealer Groups survey compared to 2008.
The recruiting from dealer groups comes on the heels of FPA research gathered from Australian Securities and Investments Commission (ASIC) enforcement actions that found financial planners without the CFP designation are 32 times more likely to be in breach of ASIC regulations than CFPs.
FPA deputy chief executive Deen Sanders said many dealer groups were asking themselves what education their financial planners needed during the downturn and how they could ensure investors were receiving the right financial advice.
“If I was a licensee who was recruiting and I had a choice between two people, one of whom was a CFP and another who wasn’t and was 32 more times likely to break the law, I’d know which one I’d hire,” Sanders said.
“Licensees are not happy with the entry levels for the industry. Nobody is comfortable with having the least qualified people in your business.”
Morrison Carr dealer group head Phillip Alexander said once financial planners went through the CFP qualification they would have a greater understanding of the regulatory regime. Even the process of attaining the CFP qualification requires discipline from a financial planner, and that discipline would “roll through” to a commercial application, Alexander said.
The industry was maturing in terms of the way advisers structured and conducted their business, and the CFP qualification was part of that process, he said.
Alexander added that the CFP qualification would perhaps be better recognised by the public in the future. Approximately 80 per cent of Morrison Carr’s authorised representatives are CFP qualified.
Financial Services Partners (FSP) national sales and development manager John Doyle said while FSP didn’t necessarily require its financial planners to hold a CFP qualification, taking advantage of certain opportunities in the market may require them to pursue higher standards of education.
