In the financial planning field, much of the profession’s success depends on a general attitude among the public of confidence and trust. In other words, if the investing public does not trust the financial planning profession, they certainly won’t trust financial planners and everyone in the field will suffer as a result. Because of this fact the financial planning field has adopted various rules and regulations specifically designed to ensure the public will have reason to trust financial planners. But, sensing that more work needs to be done, a particular group of financial planners has recently launched a public awareness campaign which is aimed at setting itself apart from all the rest.
In a recent television commercial, produced to show the public the dangers of working with an unqualified financial planner, the Certified Financial Planner Board of Standards chose to make the point by using a little bit of humor. In the ad appears a financial planner, sitting in his executive office, counseling various clients on different financial options they should consider. At the end of counseling each client, they are asked by the financial planner if they believe that he is qualified and trustworthy. All agree that he is.
After gaining their trust and agreement, the financial planner reveals that he actually has no financial knowledge at all, and is in fact disc jockey. Proving the point, he shows video of himself DJing and video of his makeover from being styled in casual garb with long hair, to wearing a nice suit and a more professional haircut.
The point of the video was to separate those who have obtained their Certified Financial Planner (CFP) designation from those who haven’t. The Certified Financial Planner Board of Standards wishes to convey that CFPs are knowledgeable, trustworthy, and have the skills needed to advise you on your financial decisions, while financial planners who have not acquired the designation may as well be disc jockeys. This commentary says as much about how unreliable a layperson’s judgment is when determining if a financial planner is, indeed, trustworthy and knowledgeable.
The ultimate take away, of course, is not that the CFP credential alone makes the financial planner. Rather, the take away is that as the public becomes more discriminating, it becomes all the more important for financial planners to be able to demonstrate knowledge and a proven track record of successfully managing assets.