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Financial planning is trying to emerge from the financial services industry to become a profession.

Several hallmarks distinguish a profession: prolonged or special training, a particular skill, a high level of education, and a formal qualification. The definition of a profession inherently separates it from trades, industries, and businesses.

The financial services industry, where financial planning currently resides, includes a broad spectrum of companies and individuals who sell a variety of products, provide various services, and offer financial advice. Many planners feel that financial planning, as it relates to giving financial advice, needs to be elevated to a profession. Academia has also begun to offer undergraduate, graduate, and doctoral degrees in financial planning.

Professions such as medicine, law, and counseling require board certifications before anyone can begin practicing. No such licensing board, however, bestows a formal qualification upon financial planners.

The closest thing for financial planners is a certification, which is something less than a formal qualification. It is a formal procedure by which an authorized organization assesses and verifies the qualification of an individual’s skills in accordance with established requirements or standards. The most recognized certification for financial planners is the Certified Financial Planner (CFP) designation from Certified Financial Planner Board of Standards, Inc. (The CFP Board is a non-profit, non-governmental organization, not to be confused with the Consumer Financial Protection Bureau, or CFPB, a federal agency.)

As professional organizations grow and mature, they often tighten the requirements for membership and certification. This has been the case with major professions such as law, medicine, engineering, and mental health. Similarly, as various trades develop, their standards and proficiency requirements increase over time.

In contrast, the CFP Board recently reduced four of the qualifications to earn the CFP certification:

  1. In 2012 the CFP Board modified its requirement for three years of financial planning experience to include a two-year apprenticeship option.
  1. In 2014 the comprehensive exam was reduced from two days to one, a move seen by many CFP practitioners, myself included, as the first step to make obtaining the certification easier.
  1. In June 2015 the CFP Board eliminated the requirement that certain professionals seeking to obtain the CFP certification had to take a certain financial planning course before sitting for the CFP exam.
  1. In June 2015 the CFP Board broadened the definition of "financial planning experience." Previously, it had included teaching financial planning or delivering financial plans to clients. The new definition includes what the CFP Board describes as "activities and responsibilities reflecting financial planning knowledge and competencies that indirectly support the financial planner and/or the financial planning process."

As financial planner and writer Michael Kitces points out, under this definition "virtually any job in the entire financial services industry will now qualify as financial planning experience, including an employee benefits administrator, a compliance attorney, and even a journalist who simply writes about financial planning topics."

If the CFP Board intends the CFP certification to be the mark of a financial planning professional, watering down requirements is hard to comprehend. If the goal is to help financial planning develop as a profession, the organization should consider tightening the educational and experience requirements, not easing them.

Instead, it appears that the goal of the CFP Board is to broaden the CFP certification to become the mark of the financial services industry in general.

The CFP Board has left it up to financial planners and academia to elevate financial planning to a profession. That end goal will not happen anytime soon.

Until a formal qualification for financial planners develops, the public would do well to understand that a CFP certification is only a mark of education. It does not guarantee that someone has financial planning experience, is competent, or has a fiduciary duty to the consumer. Potential clients still need to verify a CFP's qualifications the old-fashioned way: by asking a lot of questions.

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Rick Kahler, ChFC, is president of Kahler Financial Group, a fee-only financial planning firm. His work and research regarding the integration of financial planning and psychology has been featured or cited in scores of broadcast media, periodicals and books. He is a co-author of four books on financial planning and therapy. He is a faculty member at Golden Gate University and the former president of the Financial Therapy Association. The opinions expressed in this commentary are solely his.