Should Practice Management Really Be Eligible for CE? Part 1

With the first major changes to the continuing education requirements for CFP professionals in nearly two decades, the Certified Financial Planner Board of Standards has proposed that in the future up to 10% of the continuing education requirement be satisfied with content on practice management. Distinct from education on trust and communication, the proposal would allow for CFP CE for practice management topics tied to the business of operating a financial planning practice.

While many have long requested CE credit for practice management content, though, it seems that allowing practice management CE strays away from the fundamental purpose of continuing education, and risks creating a double standard for technical competence between financial planners that work in a practice, and financial planners who own a practice. Perhaps that means the better solution is to improve the practice management tools, resources and content that are available in the first place, so that practice management can simply be its own reward, and justify its own ROI, for those who choose to own and operate a financial planning business?

The inspiration for today’s blog post is the recent announcement by the CFP Board on potential changes to the continuing education requirements: specifically, allowing up to 4 hours of CE credit for practice management content (combined with credits for pro bono activities). Under the CFP Board’s proposal, practice management content would be defined as “focused on the planning, development and management of a CFP professional’s business operations, office management, business model design, budgeting processes and leadership.”

The proposal appears to acquiesce to a longstanding request from many experienced CFP practitioners, who have asked that at least some practice management content be eligible for CE. For instance, earlier this year, industry consultant Tim Welsh noted that in today’s difficult environment, planners are spending more time than ever just trying to build and maintain their practices, raising the question “what good is having an advanced certification that allows a practitioner to deliver financial planning advice if the vehicle in which it is delivered is inefficient on a good day and not sustainable on a bad one?”

Purpose of continuing education

The concept of continuing education exists in most professions. Broadly speaking, it is intended to ensure that the practitioner remains up to date on job skills—including and perhaps especially those not necessarily used very often—and up to date on the latest developments in the professional body of knowledge. Thus, for instance, CPAs have substantial continuing professional education (CPE) requirements that help to ensure they stay up to date on the latest tax law changes, and doctors have ongoing continuing medical education (CME) obligations to ensure they’re current on the latest medical procedures, treatment options, and available prescription drug solutions in their specialty.

The underlying principle is that it’s in the interests of both the public and the profession itself to have some minimum requirements in place to ensure the practitioner remains up to date. Not only is an undereducated, outdated practitioner at risk to, perhaps unwittingly, inflict harm on the public, but such professional negligence errors can also reflect badly on the profession at large.

In essence, it’s not enough to simply let competitive pressures play out—after all, “bad” practitioners who don’t stay up to date ostensibly will eventually lose clients to “good” practitioners who do—because the public ramifications of professional malpractice impact all members of the profession. Thus, continuing education requirements were established to ensure a minimum level of competence is maintained for all practicing professionals.

No practice management as continuing education

Because the fundamental focus of continuing education is a minimum of technical competence, to protect the public and the reputation of the profession itself, many professions do not recognize practice management content for continuing education. Thus, for example, while there are many providers of practice management advice for doctors, it is generally not eligible for continuing medical education. After all, who wants to go to the doctor who skipped the classes on the latest medical treatment for your problem, to instead learn how to do better marketing or implement new billing software?