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Understanding the alphabet soup of financial planning’s new education standards

Aug 29, 2014


The financial planning industry is awash in an alphabet soup of accreditations, certifications, designations and qualifications.


Whether you’re working in the financial planning businesses of CBA, NAB, AMP, WBC or ANZ, there’s a confusing array of CFP, FChFP, ADFP and MoFP out there. The relevance of these also often hinges on whether you’re part of the AFA or the FPA.

All of the above highlights the multitude of steps individuals can take in achieving the skill set required by their particular licensee.

Senior financial planners currently working for the Commonwealth Bank (CBA), and all new financial planners, must hold the Certified Financial Planner (CFP) designation by 2017.

Westpac requires all existing and new advisers to hold a CFP, a Fellow Chartered Financial Practitioner (FChFP), or Masters in Financial Planning (MoFP) qualification within five years, or a financial planning certification from a recognised accounting body.

AMP financial planners must also adhere to a similar standard of accreditation of either CFP or FChFP by 2019.

National Australia Bank and its financial planning arm MLC is adhering to the CFP standard, similar to CBA’s approach.

Though it hasn’t yet made any firm announcement, ANZ has also suggested it will require all its financial planners to hold a CFP accreditation.

What’s in a CFP designation?

The CFP designation in Australia requires membership of the Financial Planning Association of Australia (FPA), which administers the program here.

Before being admitted as a member of the FPA, financial planners must hold a relevant degree from a recognised academic institution.

“They would need to do quite a bit of study outside FPA, because we don’t offer the base level training,” says Belinda Robinson, head of professional designations at the FPA.

What does CFP cost?

Not including the cost of a prior degree, the total expected outlay for an individual to complete the CFP certification program is $8050.

Robinson explains this consists of four units of study, with each costing $1550, with the final CFP certification unit setting the candidate back an additional $1850.

What if I don’t already hold a degree?

Those who aren’t already degree qualified are granted a grace period in which to get up to standard. For CBA advisers, this is three years, while those employed by AMP and National Australia Bank have five years.

According to Robinson, “most commonly, people who are upgrading from experience in the industry would be looking at doing a Masters degree. Even counting the CFP into the masters – some universities are moving towards 16 units in their masters – we’d normally allow them to do four and count them towards the Masters, others have 12 unit Masters.”

Another option is to upgrade to a Bachelors degree, “as they can get credit for an existing Advanced Diploma of Financial Planning, usually half of a bachelors,” Robinson says.

“This leaves them with 12 subjects out of a bachelors, four units of CFP, plus the certification units.”

She adds that most often, planners are seeking a Masters degree, but adds “as universities are increasing the number of units, it may make the upgrade to a Bachelor degree more attractive”.

Robinson points out that the FPA accredits courses according to the Financial Planning Education Council (FPEC). This includes a requirement for eight specific areas to be included, with the FPA working with at both the practice and institutional levels in setting this standard.

Deakin University MoFP

Financial planners who are not currently members of the FPA and don’t meet the entry criteria can nevertheless gain entry by successfully completing a MoFP, also from an FPA-approved provider. To undertake an MoFP, a candidate must has an undergraduate degree – but it need not be in an area related to financial planning.

Dr Adrian Raftery, senior lecturer in financial planning and superannuation at Deakin University in Victoria, says that MoFP entry requirement applies “across the board, across all universities”.

Raftery says the focus on education standards is welcome, and education providers are working hard to lift the quality of the courses on offer.

“Deakin has increased its standards as well, with the increase of our Master of Financial Planning degree from 12 to 16 subjects – partly in line with the Financial Planning Education Council’s curriculum guidelines but also to encapsulate the new requirements for financial advisers to be registered with the Tax Practitioners Board under the TASA regime,” Raftery says.

“That in itself I think is a good indication that we – the education providers – are getting a bit more serious about the profession.

The cost of completing a 16-unit MoFP course, such as Deakin’s, runs to about $47,000, or about $2962 a unit (or $1283 a unit for Commonwealth-supported places).

Raftery says an investment in raising the standards of financial planners is one of the best investments a licensee can make “because it will cost the industry a hell of a lot more – in bad reputation, et cetera – if they continue to do absolutely nothing.”


AFA’s general manager of membership services and Campus AFA, Nick Hakes, says the Fellow Chartered Financial Practitioner (FChFP) course is designed to be “relevant to a financial planner operating in the Australian market”.

The actual FChFP designation is awarded through the Asia Pacific Financial Services Association (APFinSA), and Hakes says the AFA has “purpose-built the FChFP from the ground up, deliberately at a master’s level”.

An AFA member who holds an Advanced Diploma of Financial Planning (ADFP) or equivalent and who has at least three years’ experience is eligible to undertake the course.

It is structured as four units that typically take 12 weeks each to complete, and each unit is divided into learning and practical business project components. It costs $980 per unit – a total of $3920 to complete the course.

Content is delivered through a series of online articles, with knowledge tests along the way. The business project covers creating a strategic business plan; creating a client experience strategy; creating an advice strategy paper designed to test the quality and rigor of advice; and a governance plan, which includes risk management systems and processes.

Completing the FChFP course gives successful candidates one-for-one credits through to a Master of Financial Planning course run by AFA’s education partner, Kaplan.

“The advisers are saying this is great, what I’m understanding is I’m getting this master’s-level thinking, and I am applying it directly to my environment,” Hakes says. “They’re really seeing the relevance to them.”

Peer-to-peer contact

Hakes says another important element of the course structure is the peer-to-peer contact it encourages. There are online peer forums; and practitioners regularly meet face-to-face to discuss and solve business problems.

He adds that many advisers are feeling apprehensive about the prospect of having to return to formal study after, in some cases, decades away. The peer-to-peer component of the FChFP course helps ease the transition back into learning.

“With existing advisers, we want to encourage them to invest in their education,” Hakes says.

“With the Chartered Financial Practitioner, they can see the direct relevance to their business and to their advice world [and they can] link through to a Master of Financial Planning, which takes them back to that more formal world of education.”

Original article published in Professional Planner on 29 August 2014


Tags: 101 WaysEducationEmployeesEmployersFinancial Planning

Author: Mr Taxman


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