FPSC unveils new competency standards for CFPs

In an effort to further define the responsibilities of financial professionals, the Financial Planners Standards Council has released a new Professional Competency Profile, which outlines the gamut of core capabilities required of all certified financial planners.

Available on the FPSC’s website (www.cfp-ca.org), the 47-page profile, which includes an overall competency matrix, is designed for a target audience of seven specific groups: current CFP licence holders; those coming into the profession; the public; financial services employers; education providers; complementary professionals such as accountants; and other advisors in the financial services community who are not CFP holders (e.g., stock brokers, personal bankers, insurance agents, etc.).

FPSC acting president and CEO Cary List says this latest initiative sets the bar and provides a new framework upon which the CFP examination — the hallmark of the CFP professional standards program — will be based. Beginning in November 2007, the twice-annual exam will be fully “competency-based,” combining its accredited, educational programs with the new Competency Profile, which will replace the current training syllabus.

“The CFP exam syllabus was more knowledge-focused,” explains List. “It talked about what somebody has to know. But the problem with what somebody has to know is it doesn’t necessarily mean that they’re competent, or that they can do what their clients expect of them.”

Although the additional training component is not a radical change, List says the examination process is a natural progression toward further professionalism in the industry, as candidates will be expected to demonstrate their ability to apply that knowledge in an even more obvious manner.

Some of the core competencies as outlined in the profile include collecting both quantitative and qualitative information required to develop a financial plan; identifying potential opportunities and constraints; and assessing information to formulate strategies. Each of these competencies then flows through the various channels, or six fundamental elements, of financial planning, including estate planning, retirement planning, tax planning, risk management, asset management and financial management.

Demonstrating competence as a CFP is not just about possessing knowledge, notes List. “Competence is the ability to perform specific job-related tasks and have the requisite professional skills — those sort of less tangible or more generic skills that help to ensure that those tasks are actually being performed appropriately. And, of course, all of the underlying knowledge that is needed to ensure that all of those tasks are being performed appropriately.”

The six-hour CFP exam, held twice a year, is broken into two three-hour (morning and afternoon) sessions. Accredited education is provided in about 70 places across the country and is offered nationally through the Canadian Securities Institute, the Institute of Canadian Bankers, the Canadian Institute of Financial Planning, and a partnership program between Advocis and CCH.

York University Atkinson School of Administrative Studies tax professor and associate dean Joanne Magee supports the new offering as a critical component to her educational platform. “The CFP Professional Competency Profile is very comprehensive and will be a useful tool for educator and students. I am certain that we will refer to it frequently as we prepare students for the financial planning profession.”

Filed by Heidi Staseson, Advisor’s Edge, heidi.staseson@advisor.rogers.com