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May 11, 2016 at 11:51 AM
For 10 years, the certified financial planner (CFP) designation represented the most important and practical educational experience of my life. For the next 25 years, it was irrelevant.
The financial planning concept, associations for financial planners, the College for Financial Planning and the CFP designation all date to about 1970, the year I joined a brokerage firm which then had two services, selling stocks and bonds.
It was a different world. Tapes of New York Stock Exchange share prices appeared prominently inside and outside of brokerage offices, and specific quotations were obtained by sending a telegram to a central office, which eventually was replaced by using Quotrons. Information about holdings and cash balances of accounts came to us daily on paper, perhaps two pounds a day. Full service was on the horizon.
Standardized options, comprehensive checking and savings accounts, unit trusts, accounts managed by third parties, retirement accounts and negotiable certificates of deposit were not available, but were to become widely available by the early 1980s.
The financial planning concept emerged coincidentally with the creation of full-service firms. The evolution was important to me as I began to take a more comprehensive view of client needs. When the CFP program became available, I jumped and became the first in our office, and one of the first in Indianapolis.
The curriculum was not academic per se but rather taught a comprehensive view, including insurance coverage, retirement planning and disciplined saving for college expenses, an understanding of income and estate taxes and procedures for assessing the totality of clients’ circumstances.
To say that the effort to obtain a CFP changed and improved my professional life is an understatement.
The next 10 years of continuing education requirements were equally important. I learned about investment policy to express goals and objectives, primarily for institutions, but applicable to individuals as well. The most powerful book was “Investment Policy” by Charles D. Ellis which became the basis of a course we created for The Indiana University Center on Philanthropy and the university’s division of continuing studies. Combining these educational experiences while also serving individual clients, I knew it all.
I know that sounds pompous and absurd, but it is demonstrably true. After 10 years, I either knew my subject or was aware of what I did not know and how to get the missing information. Mandatory continuing education became irrelevant.
Continuing education requirements arise from the sciences, medicine being the best example. In medicine, new discoveries, services, test equipment, pharmaceuticals and even diseases appear every day. A physician could not serve without thorough continuing education. Fortunately for them the task is interesting, exciting. Imagine the feeling of a physician when he reads about ways to solve problems he has faced. For other scientists, landing on or near a planet or asteroid, discovering a new medicine, hypothesizing about the nature of light or creating a computer operating system that changes the world is exciting and rewarding. For them, education is not a yawner. It is a page turner.
