CFPs' info on blockchain ... what’s that about?
Not all CFPs may be comfortable with cryptocurrencies. But, like it or not, CFPs themselves are now part of the disruptive blockchain technology on which crytocurrencies are based, thanks to a new offering from the CFP Board.
The board has placed information about all 83,000 CFPs onto a publicly accessible blockchain distributed ledger to give planners a new way to rapidly verify their certification status via a digital link. CFPs can send clients or prospects the link, which also can be embedded on websites, social media accounts and in documents. Click on it, and a certificate appears on screen. (View one CFP's certificate.)
Digital technologies have "raised our service expectations," the board's CEO, Kevin Keller, wrote in an August newsletter announcing the offering, which launched this week. "We want to find information with a click or two, or a brief exchange with Alexa or Siri. If we can’t find what we’re looking for with minimal effort, there’s no limit to the other pressing — or not-so-pressing — things that want our attention."
The initiative is an important consumer protection, the board told Financial Planning this week, adding that it "provides a 21st century solution to an age-old problem of certificate verification."
CFP Kristin Fang said she's likely to use the signature. "It's very nice to have a quicker and more effective and efficient way to verify certifications," says Fang, an advisor with Evensky & Katz/Foldes Financial Wealth Management in Coral Gables, Florida. "That's impressive."
Blockchain ledgers, which can be public or private, are managed by a distributed network of users. One of the technology's main value propositions is that its data, once created, supposedly cannot be altered, theoretically assuring its legitimacy. That also makes the board's decision to publish data a functionally permanent one.
Each advisor's certificate is verified via the blockchain-based credential verification firm Accredible, which claims clients like Google, Purdue University and the University of North Carolina at Chapel Hill. The company, headquartered in San Francisco, did not respond to requests for comment.
Although CFPs' data is stored on a public blockchain, they can configure their accounts to make it private, according to the board.
Even for those who don't opt for privacy, the board says it has ensured that their data is protected. No highly sensitive personal information, such as Social Security numbers or dates of birth, have been publicized. The only information used for verification purposes is a CFP's name and date of certification, both of which are already publicly available on the board's website, the board says. That information is encrypted in the form of a secure multi-character code called a hash, according to the board.
"A recipient’s information cannot be reverse-engineered or exposed using the blockchain," the board said in its statement. And while the "hash is used to verify whether the information on a certificate has been changed, [it] does not allow anyone to see what the personal information was."
None of this information was included in the board's four-paragraph announcement about the signature this week, which may have raised more questions than it answered.
"I am struggling to reconcile what problem the CFP Board is trying to solve," says Bill Winterberg, a CFP and tech consultant to other advisors through his company, FPPad.
"Is there rampant widespread CFP credentialing fraud? Are thousands of people claiming they have a CFP certification and winning business through nefarious tactics and is CFP Board failing to find them and failing to bring legal action against them?"
Winterberg, along with CFP Adam Cmejla of Integrated Planning & Wealth Management in Carmel, Indiana, wondered why the board is duplicating a system that already works on its own website for verifying CFP status.
"Did the board spend money on a solution to a problem that didn’t exist just so it could look 'forward thinking' by using blockchain?" Cmejla asked in a tweet over the summer, following Keller's August newsletter on the subject. Winterberg questions the cost, saying "Maybe they are overpaying for this outside agency."
The Accredible website says it charges $160 a month to certify from 1,000 to 2,000 people a year. In 2018 the board certified 1,061 new CFPs.
In advertising its ease of use, the tech company also offers to create certificates for all of an organization's credential holders with just a few clicks.
In response to critics, the board pointed out to Financial Planning that the American Institute of Certified Public Accountants uses digital certificates and Linkedin says they will become increasingly important in online profiles, to establish credibility.
Although Fang says she is likely to use the certificate, she adds that she understands why other CFPs might not. "They may be concerned about the technology itself. They may be thinking it may not be as mature as they thought it would be," Fang says. "It seems that blockchain is decentralized, so [the board] could lose control over that."
Vincent Barbera, a CFP and managing partner of Newbridge Wealth Management in Berwyn, Pennsylvania, says having his information up on the blockchain doesn't concern him.
"It’s easy to be scared of it since we don’t understand it, but I think it’s fine," he said. But that doesn’t mean he's going to use the certificate.
"As a CFP, this offers me no value," he says. "I really have no interest in sharing this in my email signature. I have never seen this as a pain point."
Delia Fernandez, founder of Fernandez Financial Advisory in Los Alamitos, California, says she's deleted several emails the board has sent her about the offering because, at first glance, they looked like scams.
Indeed, the board's Jan. 15 email to Fernandez begins, "Congratulations! You are now a Certified Financial Planner professional!" Fernandez got her CFP in 2007.
"Doesn't that sound weird if you took the exam years ago?" she says. "That's why I ignored it."
Setting aside questions about the privacy of her data, which she assumes the board has handled responsibly, Fernandez says she's not sure if she'll use the signature either. "It's one more layer of computer technology that I have to think about," she says, "and I don't know if it's relevant."