Back in the early 1990s, I was part of a group of journalists who were asked by the CFP Board (at my suggestion, if memory serves) to take the then newly revamped CFP exam. The idea was to generate publicity about the new, higher standards created by the then head of education for the Board, Dede Pahl, and her team of psychometricians (think over-educated testers), about which the Board was all atwitter.
None of us came close to passing, and yet, I had to admit in print (much to the dismay of the Board and its PR people), that I was less than impressed with the exam. Sure, it was hard; but anyone can create a test that’s not easy to pass (e.g.—with apologies to Monty Python—What’s the average air speed velocity of an African swallow?)
My concern was that the exam appeared to be almost entirely based on the rote memorization of arcane facts (which could easily have been looked up, even before Google), to the exclusion of things that would have made me feel better to know that my financial planner knew—such as how to create a well-allocated investment portfolio, or the size of the nest egg I’m going to need when I’m 70.
I was reminded of my exam experience when I read Jamie Green’s August 20 story— CFP Board Floats Big Increase in CE Hours—about the Board’s proposed increase in its continuing education requirement .
It seems that the Board wants to beef up the CE requirements for CFPs, by among other things, increasing the biennial total from 30 hours to 40 hours, allowing four of those hours to include practice management topics,and upping the ethics requirement from two to four hours. The question in my mind is whether this additional “education” will actually make anyone a better financial planner, or if the Board is once again playing politics, this time by jumping on the increased regulation bandwagon that our leaders in Washington, D.C. assure us will prevent the abuses that lead to the recent financial meltdown.