Do we really need another book about financial planning? According to the CFP Board, we do—at least one by the Board.
Here’s how CEO Kevin Keller described the Board’s first foray into book publishing in a press briefing last March 28: “As part of the Board’s mission, we need to be the authority on financial planning, and building an academic foundation is central to the creation of financial planning as a profession.” To fill this void, Dr. Charles Chaffin, director of the Board’s Academic Programs and Initiatives, spent the past couple of years working with a team of 21 other contributors to create “The CFP Board Financial Planning Competency Handbook.”
The goal of this massive tome—which includes 85 chapters and 735 pages—is, according to Keller, to “serve as the comprehensive handbook for financial planners, those who are candidates for CFP certification, those involved in the industry, academics and, of course, journalists.” (I’m not sure, but I think that last bit was a joke.) It’s a worthy—if ambitious—goal, and its list of contributors includes leading luminaries among financial planning practitioners and academia. What’s more, the handbook is uniquely structured to combine the theoretical side of financial planning with how those theories are applied and practiced in the real world. Still, older planners (and observers) will remember that the Board attempted a similar project back in the 1990s—practice standards for financial planners—that was abandoned after a backlash from CFPs who were fearful of the potential liability such standards might create and wonder now whether the Board might be repeating its history.
As I mentioned, the list of 22 contributors is impressive. The academics include: Dr. Thomas Warschauer, who is professor of finance emeritus atSan DiegoStateUniversity, a former member of the CFP Board of Examiners, and was the first president of theAcademyofFinancial Services. John Grable, Ph.D. is a former practicing financial planner, the founder and first program director of personal financial planning atKansasStateUniversity. He currently holds an endowed professorship at theUniversityofGeorgia, where he conducts research and teaches financial planning. Dr. Vickie Hampton is department chair and professor of personal financial planning atTexasTechUniversity.
Well-known advisor Deena Katz, Ph.D., is both an associate professor of financial planning atTexasTechUniversityand a founding partner at Evensky & Katz inCoral Gables,Fla.Also a leader in the financial planning profession, Elissa Buie, MBA, CFP, is both a practicing planner and a professor of financial planning atGolden GateUniversity. As the last chair of the ICFP, she was instrumental in the creation of—and the first chair of—the FPA, and is the current chair of the Foundation for Financial Planning. Her husband and partner, Dave Yeske,CFP,MA, DBA, is also a past president of the FPA, and is an associate professor atGolden GateUniversity. The CFP Board’s Charles Chaffin, Ed.D., has overseen 340 Board-approved CFP education programs since 2010, and served as both editor of the handbook and a contributor.
One of the first things that strikes a reader of the handbook is its sheer heft. The second is its unusual structure. The first 77 of its 85 chapters focus on the financial planning topics that are required to meet the CFP education requirement (think retirement needs analysis, gifting strategies or standards of professional conduct), with each written by one or more of the contributors. According to Chaffin, “the book was designed to treat theory and practice […] as one entity, where content is defined but also applied, but within the learning environment and in practice.”
To do that, each chapter outlines what practitioners should be able to do, relative to that topic, in each of three financial planning career stages. There are also vignettes in each chapter to “illustrate how each particular concept is applied or exists in practice.”
For example, in chapter four, “Cash Flow Management,” there are learning objectives for students such as “calculate cash savings required to meet financial goals.” Then, there’s a rather lengthy chart about what’s supposed to go on in class relative to cash flow, followed by the professional practice capabilities for each of the three levels: entry-level, competent and expert. An “entry-level” planner can “explain the cash flow management process [and] identify opportunities and challenges related to a client’s cash inflows and outflows,” while an “expert personal financial planner can creatively and strategically identify financial and nonfinancial resources to use by clients in reaching financial goals.”
Finally, there are two vignettes that illustrate cash flow issues. The publisher, Wiley & Sons, has practice questions for each chapter online, and planners can earn up to 28 CE credits for answering. A survey of the other chapters suggests more of the same and leaves one with the impression that, overall, the Board has indeed “moved the profession of financial planning forward by creating a universal body of knowledge for the disciple as a whole.”