Re-Education: Will More CE Hours Make CFPs Better Planners?

For instance, increased ethics education? Really? Does anybody (even on the CFP Board) really believe that with two more hours of learning about ethics Bernie Madoff or Judith Zabalaoui would have spared investors billions in losses? Do we really think that CFPs don’t understand their ethical obligations, even under the Board’s convoluted standard? Maybe it’s just me, but perhaps the investing public (whom the Board purports to protect) and CFPs themselves would be better served if the Board were to adopt an ethical standard more closely aligned to that of the ’40 Act (which many CFPs are already subject to), rather than the watered down fiduciary standard it currently uses, which raises more questions than it answers. 

As for the increase from 30 to 40 hours, I imagine it reflects both the greater increase in the complexity of financial products and strategies, combined with the inclusion of practice management education. The addition of practice management education in the CE program is long overdue. Running an efficient and profitable practice is indeed client-centered: It not only increases the likelihood of good client service, it decreases the motivation for unscrupulous activities. 

Of course, this could have been accomplished by simply adding “the planning, development and management of a CFP professional’s business operations, office management, business model design, budgeting processes and leadership” to the list of topics currently approved for CE credit. And the Board’s typically convoluted explanation sheds little light on its more complicated solution: the CE requirement for CFPs has remained “largely unchanged from its introduction in the 1990s.” Meaning what? That education simply should be increased over time? (Need I point out that, for instance, both undergraduate and medical school requirements have been fixed at four years for more than a century?)   

CFPs will have to decide for themselves whether being thrown the bone of practice management is worth the 33% increase in CE hours: Comments may be sent to the Board by e-mail or by regular mail to Michelle Warholic of the Board at 1425 K St., NW #500, in Washington, DC 20005. 

With FINRA poised to assume regulation of independent investment advisors, it seems like an inauspicious time to be increasing the burden on financial planners.