At a media briefing in Sydney on Wednesday, the Financial Advice Association Australia (FAAA) unveiled its latest Value of Advice Index, based on insights from consumer research undertaken by independent research firm MYMAVINS.
The index compares responses from Australians that both work with an adviser and those who don’t, as well as those who work with a Certified Financial Planner (CFP), across quality of life, financial confidence, financial satisfaction, and their experience with their adviser.
Looking at these key metrics, the index scores responses on a range from 0 to 100 and found that advised Australians say they experience higher quality of life, financial confidence and financial satisfaction than those who are unadvised.
FAAA chair David Sharpe said the results highlight the importance of working with a professional financial adviser.
“It is well understood that financial wellbeing is connected with overall health and wellbeing,” Sharpe said.
“The FAAA Value of Advice Consumer Research study makes clear the link between getting quality financial advice and having better quality of life and less financial stress.
“The study was undertaken at a time when many people are experiencing cost-of-living pressures, from their supermarket shopping to their mortgage. In this environment, it is fantastic to see that those who work with a financial adviser feel more financially secure and able to face current challenges.”
The index also broke the responses down to split out responses from Australians that work with a CFP, with the responses even more positive.
Looking at quality of life, unadvised respondents rated at 62, while non-CFP advised clients were at 71 and CFP advised clients rated a 77.
The difference was even more stark when looking at financial confidence and financial satisfaction, with unadvised cohort rating 57 and 55, respectively. Advised clients, however, landed at 70 and 69, while CFP advised clients rated 75 for both.
Looking at their personal advice experience, CFP clients rated it an 84, while non-CFP clients were lower at a still solid 74.
“It was really clear to see that the professional delta that we’re calling it for seeing a CFP professional is an additional step up,” Sharpe said on Wednesday.
“It isn’t really a surprise. CFPs go through significant additional study. It’s blood, sweat and tears. I can tell you, nearly two decades since I went through and I’m talking to recent CFP graduates, and they’re telling me it’s still bloody tough to get through.
“So, that professional commitment to get to the gold standard of professional advice is being laid there as well in this index.”
The sentiment among both advised clients and CFP advised clients have made dramatic improvements since the previous year’s report, with financial confidence (+14 for CFP professional clients, +10 for clients of other financial advisers), and financial satisfaction (+15 for CFP professional clients, +11 for clients of other financial advisers) showing the largest gains.
Meanwhile, figures for the unadvised from this year are relatively close to last year’s where scores range between 51 and 63 and are relatively lower than clients of financial advisers.
Also among the findings was that trust in financial advisers among clients has reached a record high, with 94 per cent reporting that they trust their financial adviser to act in the client’s best interests.
Similarly, 94 per cent of financial advice clients said their adviser has supported them to make the best possible financial decisions, 93 per cent said their financial adviser has helped them manage financial risks in their life, and that the services provided by their financial adviser have met their needs.
A lot of people ask why the CFP Certification Program wasn’t given much recognition by FASEA? It’s the same reason FASEA made so many other bad decisions. FASEA was incompetent and corrupt.
Universities do provide 4 subject exemptions in their Grad Dips for the 4 base level subjects of the CFP Certification Program. Those universities that have an arrangement with FAAA to offer CFP 5 as an elective in their Masters degrees also provide an additional subject exemption for those who have completed CFP Certification Program.
Of course no-one gets any exemption for the CFP Designation, because that designation might have been obtained as part of the dodgy grandfather deal. FAAA refuses to distinguish between the two vastly different standards of CFP Designation, and refuses to sunset the grandfathers. Consequently the CFP Designation is devalued for everyone.
We need to move on from these gimicky designations. Completing a Masters degree is the true mark of a professional and it resonates with higher earning professional prospects. The added bonus is that you have it for life. No one can take it away from you and you don’t have to pay an annual fee to keep it
CFP® is a global designation with 223000 global professionals in 27 countries sharing and promoting financial planning as a profession. The CFP exam is tailored to meet the technical and regulatory framework of each country but the competencies are developed from a global perspective.
Since 1990, CFPs must be able to master the complete set of abilities required to competently deliver a comprehensive financial plan to a client. CFPs must also be capable of mastering a body of knowledge in 11 areas:
1. taxation
2. insurance
3. investment
4. retirement, savings and income programs
5. law
6. financial analysis
7. debt
8. economic and regulatory environment
9. government benefits plans
10. behavioural finance
11. ethics and standards.
It takes 10,000 hours of practice to become a master of your chosen profession, reference Robert Greene, Mastery, 2012.
The next intake for enrolments opened on 2nd October with the semester starting on 23 October 2024. Contact the FAAA for more details.
Well said, Julie. If we CFP as a minimum standard, then we too, would be treated like other professions such as accounting and law. Unfortunately, the majority of advisers will spend more time knocking the need for ongoing education (including whingeing about the previous grandfathered CFPs) rather than opening a textbook.
If only people stopped talking about grandfathered CFPs, then we can just sweep it under the carpet and pretend the dodgy scam never happened right?
If there were no grandfathered CFPs then it’s likely financial planning would have been recognised as a profession by now with CFP as the required standard. But when you have the so called professional association pushing a so called professional deisgnation which was gifted to many of its members at an education standard well below what would have been regarded as professional at the time, no-one can possibly take FPA/FAAA or the CFP designation seriously.
The first step towards genuine professionalism is for FAAA to admit the mistakes of its past and sunset all grandfathered CFPs effective Dec 2025. (Unless those grandfathers meet the degree requirement and successfully complete the CFP 5 unit).
Likewise, my wellness guru says that medical school is a waste of time. She uses and recommends Facespace and Mybook for all her lemmings.
My adviser has two degrees and his Masters in FP and says CFP is not relevant does that sound right?
No, the current CFP is far more comprehensive and challenging than the Masters. After just finishing the four-hour CFP exam, I never want to face those sleepless nights again.
The FAAA only gives a pass/fail result, with no performance details, and I heard the pass mark is 80%. The Masters felt much easier, and I averaged a Distinction.
Not happy with the FAAA’s IT system – it was horrendous – thankfully, the staff (and tutors) were exceptional.
Just didn’t want to do the work
Yes that sounds right. CFP is nothing more than a money spinner for FAAA.
The CFP Certification Program requires 5 subjects. 4 of those are at degree level and can now be waived for candidates that have completed equivalent subjects in their degree. The fifth subject is a very difficult exam and assignment which is higher than degree standard. That’s the extra value from the CFP Certification Program over a degree.
The CFP Designation now requires completion of the CFP Certification Program plus a degree plus at least 3 years experience.
However when CFP was first set up in the late 90s, the CFP Designation only required completion of a simple diploma course which was well below degree standard. This was done as part of a dodgy deal by the then FPA to bolster membership numbers by allowing planners to obtain a professional designation without completing studies at a professional level. Thousands of planners who were awarded the CFP Designation under that dodgy arrangement have been allowed to continue using it in perpetuity as part of “grandfathered” arrangements. That is why CFP has a tainted reputation. It’s also why FPA/FAAA has low credibility.
Nailed it, you did. 100% agree.
You can tell any story you want with numbers.
That might convince some younger advisers to get their CFP, but as someone who has had it for 20 years, it doesn’t give me a single reason why I should keep paying for it each year instead of looking at a move to the AIOFP who seem to be only industry voice that I hear talking who say what I’m thinking when it comes to the inaction of the Government on much needed reform.
Is a “Qualified Adviser” more qualified than a CFP?
How many CFP had that designation before they ever had a degree or even a diploma. Please take a moment here while the wider profession CRINGES
Most licensees no longer allow CFPs obtained from the old DFP1-8 courses and insist on evidence to the contrary.
Those without a CFP will invent any excuse to explain why they lack the discipline to study. Oh, please don’t forget to shoot the messenger (IFA).
How is it relevant now? Any new entrants will do the degree – in the public eye degree qualification holds most weight no one has heard nor cares about CFP and as to the lack of discipline to study tell someone who cares!
I too, have a Masters and the CFP was significantly harder. Most of the general unadvised public are too stupid to realise they need advice. The few that seek advice, believe their union super fund has the solution. Amongst advisers, we know the difference and can spot it a mile away. Don’t take away from the merits of education – our profession and our clients deserve the very best…. even if this means getting an obscure, to some, CFP qualification.
I had a choice of a Masters Degree or a CFP. I took the Masters on the basis it was a real degree and not a shiny piece of paper that didn’t really mean anything other than increased fees for the remainder of my working life to the FPA/FAAA. No excuses, just a decision to get a “real” qualification
I got both
I have a full CFP and am also a supervisor for professional year candidates
What I will say is the CFP program of the 5 units I did post my university and ADFP studies were significantly harder and more practical than the Grad Dips available now. The CFP program in my view readies the advisor for real life advising
It’s a real shame then, that the FPA felt it was worth 10 points out of 100 towards a degree in their FASEA submission. According to their very own submission to FASEA the CFP course therefore is 10% of a degree.
CFP program does not carry any AQF level standing whatsoever. They might say it’s like an AQF level but it’s from a private institution. FASEA taught us to be very careful as to what study we do as a lot of Advisers got burnt.
What a load of rubbish. Nothing further to say. Can the IFA publish better material then the dribble coming out of the FAAA? No one cares.
So easy to slag off anonymously isn’t it?
so easy to reply anonymously isn’t it too? Did you get your CFP qualifications in a corn flake box? Or wait you spent a lot of money and your very own organisation in an attempt to sell education courses said it’s worthless. Or, Let me guess it’s your only qualification and you need it desperately to promote yourself to create some illusion you’ve got some form of basic education.
My financial planner is a CFP Professional and I highly value the advice, service and assistance they have provided over many many years. I strongly believe the CFP designation does signal a higher level of professionalism and commitment to the profession of Financial Planning.
Sorry, the lazy advisers will insist that you cannot tell the difference.
Nice try Mr CFP. Members of the public rarely say anything positive about Advisers. Nor use the words CFP Professional.
I do not hold the CFP Designation and am long retired and close to 70 years of age so please don’t make correct assumptions. If you did the research you would know CFP is a worldwide recognized qualification and the term CFP Professional is used around the world.
Did you write this yourself CFP?
I do not hold the CFP qualification- a long retired and close to 70 years old.
Really…..they are suffering from the proverbial “bubble” syndrome!!
Media rhetoric. I would say the opposite. Also can the IFA allow freedom of speech and post up uncensored comments?