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.
It’s not the same in social sciences such as finance.
After 10 years, nothing was new to me, and presentations became boring. The majority of required continuing education subjects did not relate to clients. I began to hear identical lectures at different annual meetings and to read the same analyses over and over.
As the years passed, the 30-hour-every-two-year CFP continuing education requirement became a burden. Instead of studying, I went to the CEU question pages, answered either from memory or from a quick scan of related material, and completed a theoretical three hours of education in 20 minutes or less.
A particularly irritating subject was ethics, as if personal morality can be taught. Ethics as philosophy was not taught, rather we read and re-read a code of ethics. The code has not changed, and is unlikely to change.
Unless dementia takes over, my original study is just fine. Repeating every two years does nothing for me or my clients; it merely satisfies a bureaucratic need.
A powerful force in continuing education is bureaucratization. Every lecture, essay or experience had to fit precisely pre-determined criteria, and applications for credits were made on standardized forms adapted for a record-keeping system. Originality was not a factor.
One time, I suggested to an industry leader that we should allow personal, original study. The response was instant. “We cannot do it because our system affects various licensing and regulatory requirements of agencies.”
The nail in the coffin that caused me to suspend my CFP designation was realizing that the mark has limited practical value. Clients do not care. The media does not care (an effective commentator on national television and a dynamic local commentator in Indianapolis do not have the certification). Although I was proud of my work in the 1980s, the biannual license fee and costs of continuing education were no longer relevant.
Creative, open and flexible minds could figure out ways to make continuing education interesting and rewarding. I would enjoy such brainstorming.