First I need to make it clear that I’m a big fan of the IFP and believe that the CFP programme is worthwhile, arguably required for anyone keen on demonstrating high level of professionalism in financial planning. My aim here is to provoke a debate about improving the assessment process.
As someone with a relatively strong academic pedigree – a first class honours degree, a Master’s degree in which my research/dissertation found its way into an international peer-reviewed academic journal, Chartered and now (after three attempts, lots of tears and blood) finally Certified – I think I can say that I have seen just about every known form of assessment you could think of.
I have to be honest, I don’t actually think that the CFP programme is that hard. The problem is knowing exactly what is required of you and unfortunately far too much depends on your assessors. My experience and those of a few planners I have spoken to, show such a high level of inconsistency in the way plans are assessed and I think this needs to be looked at.
Off course, those who disagree with me will argue that the required standards are laid out in the CFP Certification Handbook. My point is much of this is far too generic and much more needs to be done to offer clarification and support for candidates, whatever path they choose.
One area that trips many candidates up is the assumptions – specifically life expectancy, price/wage inflation and investment growth rate. The requirement is to ‘ensure all assumptions are adequate, reasoned and reasonable‘ but adequate and reasonable to whom exactly? The assessors of course! The trouble is what is reasonable to one assessor may not necessarily be to the other. Put 10 financial planners in the room with a client, you get 11 different plans, each with their own assumptions and recommendations.
Take asset allocation for instance, broad allocation into cash/fixed income/equity/property would be considered insufficient. You could be more specific by providing regional sub-asset classes such as European/North American Equities etc. But where does this stop, should you be country-specific as in US/UK/Japan equities? Oh and what about value, growth, small cap, large cap etc.? How far should you go and what is sufficient. You are asked to ‘provide more details’ but I couldn’t find anywhere how much more is required. And in the end, how much difference does this make to the actually plan (beyond simply frustrating the candidates?)
One other area some candidates find challenging is mortality and morbidity. In a pre-retired case study, you are often required to recommend protection to cover pension contributions in event of death or disability for instance. I saw one planner’s case where this WASN’T not done and candidate sailed through. Another planner I know got his third attempt rejected on the basis that they recommended waiver-of-premium on pension contributions (these were banned on personal pension contributions in 2004 but standalone plans are available.) I had mine second attempt rejected on the basis that I covered the net pension contributions, rather than gross and the client will be unable to get tax relief on contribution in excess of £3600!
It’s also important to bear in mind that assessors are your peers. They can and often get things completely wrong. An example in my case is how the data is expressed – real or nominal values. Most plans I have seen used nominal values and then discounted it back to today’s term. I choose an alternative route – all my figures were presented in real terms using inflation-adjusted figures and real growth rates etc. I was told by the assessor(s) I had to discount this back to today’s terms again. I challenged them on this, pointed them to my assumptions/explanation and even provided formulas used in my calculations. I resubmitted the same numbers and the point was never raised again!
Why I am raising all these? And what is the point of this entire article anyway? Well, I think if these issues continued to remain unaddressed, there is a real risk the CFP loses it real worth. This can happen in following ways….
- Candidates write their plan primarily for the assessors, rather than being client focused. While no assessment is a 100% reflection of the real world, the farther it is from the real world, the less its perceived value amongst practitioners and clients.
- Less practitioners taking the assessment. This may explain why only 116 people took the CFP in 2011! (The latest figure I could find) We need more practitioners, not less, taking the CFP!
- Negative perception among potential candidates. Some cynics claim the reason for multiple failed attempts is more commercial than academic – personally, I find it hard to agree with this. If you split the £150 submission fee equally between the FPSB and two examiners, each gets £50! I could think of 50 other ways of making 50 quid, without frustrating that many people! J
- The assessment lacks consistency and if your assessor is changed, for whatever reason during the process, you’re screwed! Just more frustration for candidates.
I understand the CFP process has been reviewed recently but I’m yet to speak to anyone who started the process after this changes were made. As far as I know, the main difference is that an exam has been introduced, in addition to the plan. I don’t see this solving the problems I have highlighted here.
For those planning on or already in the process of taking the CFP, here are my best tips!
- Get as many recent real CFP plans from other candidates who have recently passed. This is purely for the purpose of seeing what has been assessed to meet the standards, NOT to be copied! (That ‘s malpractice! ) The FPSB has sample plans, but alas, they were put together over 5 years ago!
- Assume you are writing for the assessor, not the client. Sadly, this means your plan would be far longer and possibly more detailed than anything you will ever present to a client in the real world. The saying ‘the thicker the plan, the thicker the planner’ comes to mind but unfortunately, this is just the way it is, for now.
- Use the ‘Request Further Clarification’ facility offered after each feedback – this enables you to request additional clarification from your assessor. I used this to challenge them where I felt they were wrong, they didn’t get back to me in time but I think assessors got the message!
- I have been told that the CFP training days offered by the FPSB/IFP help and I don’t doubt this. I’m sure there are lots of people with positive experience but I know planners who went on this course and still failed their 2 (and in one case 3) attempts.
- Ask other CFP Professionals to go through your plan and provide some feedback. If possible, get their opinion on your assessors’ feedback too.
- Don’t give up! Stay the course. It’s worth it in the end.
- Oh and, good luck! You are really going to need it!
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Hi Abraham,
Well done on a brilliantly written article. Reading it, I realised that I actually could have written it myself based on my own experience.
Like you I am a huge fan of the IFP. They have been instrumental in helping me to create the business I currently have. I am actually on the IFP’s events committee and helped put this years annual conference together. The CFP experience however has left a bitter taste in my mouth.
I tweeted about my experience last Thursday after submitting my final attempt and was astonished by the response I received – both in public and private tweets! It seems I wasn’t the only one feeling that way; many many others have had the same experience.
It seems that like myself, many were hesitant to say anything publicly for fear of repercussions and wanted to pass it first. I decided to go for it even though I haven’t had my result back yet because I felt like I had been pushed to the point where I don’t care anymore whether I pass it or not. That’s how bad my experience was and that is such a shame!
I actually went to appeal after my second feedback mainly because it was very obvious that my second submission was marked by a completely different assessor to the first one. This meant that the second assessor didn’t address the issues brought up by the first and instead brought up a new set of issues that weren’t mentioned in the first feedback. After I pointed this out the response was “it is very unlikely that an assessor will mark a candidate’s plan more than once”. This is ludicrous! For the sake of continuity, the next submission must go back to the original marker otherwise like you said ‘you’re screwed’.
I didn’t feel that any of my feedback was constructive and I certainly have not come away from the process feeling that I have learned anything. Except how not to put a financial plan together for a client!
I can go through many many other points that I raised during the appeal (including things that were right that were marked wrong, and things that were wrong that were marked right) but we can leave it there for now. I think everyone gets the picture and you have quite clearly articulated the problems with the marking.
You have also done a great job with the tips you have provided – I second all of them! In fact, I would recommend that anyone considering going for the CFP should read your article for some solid advice.
On a positive note, I have, since my tweet, received lengthy emails from the IFP (Steve Gazzard and Rebecca Taylor) regarding the changes that they are proposing to the assessment which all sound very positive and encouraging. This pleased me because let’s face it, we all WANT the CFP qualification to be held in high regard and aspired to. We WANT the CFP to one of the top qualifications in our profession.
The IFP seem very keen to listen to the issues we have all been having and make changes for the better. Now that we have brought the issues to their attention, the ball is in their court!
Thanks again
Tina Weeks
Hi Tina, thanks for your comments. I hope the IFP/FPSB take action, I have seen some positive response about this article. Good luck with your assessment Tina! I really hope you come out on top this time round. 🙂
Good article Abraham
My main thoughts/feedback is:
Not sure I agree that the CFP “isn’t all that hard” – I think it is and so it should be. If you (the generic ‘you’) want an exercise to make you think, the CFP is surely that and far more so than a traditional exam. If you’re not thinking hard about it, you’re either extraordinarily bright or you’re going to get a letter through the post very soon explaining that you haven’t passed.
The assumptions being reasoned and reasonable isn’t too much of an issue for me: I think as long as they are not, by an objectively minded and knowledgeable financial planner / assessor’s standards, completely ridiculous (planning for a healthy female of age 60 to have a life expectancy of age 64, returns from cash of 15% pa above inflation for example) then despite the inevitable variations in viewpoints, as you mentioned, this should be fine.
With regard to clarity, I agree completely that more could be done to help those attempting the CFP to understand exactly what is required of them. I also agree that sometimes it seems as if spurious levels of detail are required and if you ever went into such tedious detail with a client, they would be well within their rights to take your enormous paving slab of a plan and whack you round the head with it. This being said, for the purposes of the examination of ones skills, I accept that proving you can ‘do the detail’ is important.
The idea, occasionally heard, that the IFP would have a policy of failing candidates for commercial reasons is plain daft (not least for the reason you pointed out).
The assessor feedback can be vague and even contradictory at times which can, of course, lead to considerable frustration among already stressed candidates, although again, I accept this must be a difficult balance because the assessor can’t get too close to ‘giving one the answer’. However, Tina’s revelation about the paper not being marked by the same person twice, assuming this is correct (I only say this because I find it so hard to believe, Tina) is absolutely absurd and completely unfair on the candidates. The IFP needs to sort this out as a matter of some urgency I would suggest, whatever the reasons for it hitherto.
In summary, I wouldn’t want the above to sound too negative; I think the IFP and the CFP are great and I agree with the sentiment that the CFP is an essential experience for anyone wanting to operate at the top end of the financial planning profession. Indeed, many describe it as life / career changing; I know Alan Dick does.
I always encourage anyone I come across, whether in person, or via social media such as the IFP LinkedIn group, to do the CFP and the odd imperfection and frustrating wrinkle aside, I cannot recommend it highly enough – and if the IFP are working to make it a more rounded experience, then so much the better.
Hi Michael, thanks for the comments. I couldn’t really disagree on the points you raised. I can only hope some of the issues get fixed. Thanks again.
Hi Abraham
Its a great article and as Tina has mentioned in her response, we at the IFP are listening to all of the feedback and reviewing the education offering and assessment procedures.
We have changed the assessment process and introduced an exam followed by a case study element which will be assessed against revised, clearer standards. Many candidates are currently still going through the previous case study only process and we are trying to bring in more consistency and clarity for this also. Two assessors review every plan to try to avoid errors or individual misinterpretation and where they disagree on whether a standard is passed a third assessor reviews. As you point out, candidates do have the option to request clarification and/or appeal after each assessment and we do our best to provide helpful feedback while not giving all of the answers. Its not logistically feasible to use the same assessor for the same candidate on every submission as the assessors are practicing planners and have holidays or other priorities which make them temporarily unavailable. We are always looking at how we can build on the current assessor training to bring greater consistency and hope the new standards will further support this.
I would agree in general with your suggested points and would add that candidates should read their plans and review directly against the standards. The standards are designed so that the plan is written for clients and I am disappointed that you feel in reality it means writing the plans for assessors. We will review this.
While we do have some unhappy candidates and we are taking their feedback very seriously and acting to amend our approach, we believe that the majority of CFP professionals do value the process and the qualification (their was a great article in professional adviser from 4 July), and our priority is to make assessment a consistent and valuable experience for everyone.
Steve Gazzard
Chief Operating Officer
IFP
Abraham,
As I write this I am waiting for my 3rd submission to be cleared – All I had was a small point on morbidity and pension ‘waiver’ a favourite of the IFP assessors.
I am also pretty comfortable with the academic side of life (FPFS, IMC, CFA Level 1 (the CFA institute only pass 38% of 48,000 candidates each year).
The point is IFP assessment is different – it is more a journey and learning experience. Frustrating at times – yes, but a great learning experience. Anyone who sees Financial Planning and/or Life Planning as the future of our profession needs to do the CFP. Make sure you treat it as a journey not a destination – its not something that can be taught – you have to experience it!
The trouble is we have all got use to a CII minimum passmark of 55-60% to be considered competent in a subject. I question – Is that really competent or good enough for our clients? On the other hand IFP expect the case study submission to be 100% technically accurate. The process really uncovers bad habits and misconceptions we all fall into from time to time.
Has it frustrated the hell out of me “YES”, Has some assessors comments been unclear “YES”, Have I learnt a lot “YES”
I think the CFP is one of the best learning experiences a financial planner can attempt.
Jonathan FPFS, IMC
Director
Expert Wealth Management
http://www.expertwealth.co.uk