CFP Board Aims for 81,000 CFPs
The CFP Board has been on a growth tear -- and it now says it wants to grow the number of CFPs to 81,000 by 2017.
The number of CFPs has climbed by 25% to 69,000 since 2007, when Keller became CEO. To meet the new growth target, which is part of a multi-year strategic plan, it will need to stay roughly on pace, expanding fee-paying CFPs by another 17%.
Such growth would yield $26.3 million in annual fee income from CFP certificants -- up from the current $22.4 million -- if the annual $325 fee for each CFP remains unchanged.
The board is hoping some growth will come from younger advisors, as well as female planners. The traditional place we have gotten growth is from people in their 30s and 40s and we would expect that to continue, says Ray Ferrara, the board's new chairman. However, we have made a significant investment in working with students who are pursuing their baccalaureate degree in financial planning. We [want] them to think of doing the CFP certification much earlier in their career.
Currently, women represent only 23% of CFPs, adds chief executive Kevin Keller. We think there is a growth opportunity among aspiring female planners, he adds.
Neither Keller nor Ferrara would specify, however, how many of the new 12,000 certificants the board expects will come from outside the RIA world -- from companies like wirehouses, insurance companies or banks.
The growth target is part of a five-year plan that its board of directors passed and began to implement 18 months ago, says Ferrara, who replaced chairwoman Nancy Kistner last month.
It was kind of like doing all the pre-flight work on the airplane, Ferrara says. Now we are running down the runway and about to take off.
The strategic plan encompasses four pillars, Ferrara says: membership growth, awareness of the CFP mark, helping affect regulation of financial planners and becoming the main authority for the profession.
Overall, he says, he hopes the strategic plan will increase confidence in the organization: I think what ... the CFP board is basically saying [with] this five-year plan that we are not your grandfathers CFP board anymore."
To help drive growth, the board announced last month that it is shortening the exam that candidates must pass in order to become CFPs and making it more widely available. While the test currently takes a day and a half to complete, and is held at 50 sites around the country, the new computer-based test will take just six hours and be offered at 250 testing sites, Keller says.
Yet while the new test will take less time, Ferrara says it will "absolutely not" be easier for candidates to pass. We have been assured by those who understand testing better than I do that the test wont be harder it wont be easier, he adds.
The board does hope, however, that the revised exam procedures will increase the number of people who actually sit for the exam, Keller says. A CFP Board survey released last summer showed that 69% of financial planning students who graduated between 2006 and 2011 have not taken the CFP exam; Keller has said in the past that he is disappointed by the relatively low number of planning graduates who actually sit for the exam.
A more accessible test experience could help improve those numbers, Keller says. In the past, it was hard to control the environment, he says. Sometimes you would be in a hotel ballroom, or you would be on a college campus with part-time people proctoring the exam. It will be a much more uniform experience.