It was 1998 and I was standing in my old office, talking on the phone with Tom Connelly, a CFP with a Master’s Degree in Financial Planning, a CFA charterholder, and founder of an $800 AUM RIA, Versant Capital Management.
Tom told me something that has influenced my work ever since. He said the financial planning world was a “small pond” in the ocean of knowledge that a professional needs to manage other people’s financial affairs properly.
At that point in my career, I had been writing about financial planning daily for 15 years, and Tom was telling me there was a whole other universe that I needed to learn about.
I knew that the financial services universe was separated by advisors who specialized in insurance, tax, investment, or financial planning. However, Tom’s words made me see that all of these worlds were drawing closer together and would eventually become one solar system. He specifically raved about the CFA Institute’s educational programs.
In 1998, CFA Institute was a world apart from the financial planning world I knew so well. It was dominated by research analysts at brokerages and institutional investors, and it was driven by a global vision for the CFA designation. Then the mutual fund scandals of the 2000’s led to a fundamental change.
Wall Street’s legion of analysts were suddenly unwanted because Wall Street research was a joke, larded with undisclosed conflicts of interests. Wall Street was forced to lay off a lot of CFAs serving as research analysts on Wall Street. Seemingly overnight, CFA Institute and CFA charterholders around the country had to figure out what to do for a living. The answer: advise wealthy individuals.
CFA Institute has reinvented itself over the past 10 or 12 years. CFA Institute’s Private Wealth section — 15 years ago a stepchild in an organization dominated by Wall Street and institutional investors — is now far more influential among CFA charterholders. The educational curriculum has changed to ensure CFA charterholders are qualified to advise individuals.
However, because CFA Institute’s knowledge base is largely derived from large institutions with virtually unlimited resources, the quality of its research, data, and best practice ideas for professionals is very advanced.
So there you have it. That’s why A4A is inviting CFPs to hear about their distant cousins, CFAs. I have come to see that the CFP world is provincial in thinking that it owns the higher moral ground or best ideas in financial advising. And the CFP world's provincial outlook is rivalled in its myopia by the worlds of CPAs, CIMAs, ChFCs and other serious professional designations. They all seemingly pretend the others do not exist. They fail to capitalize on each other's strengths because they are competing with each other. So A4A is doing things a bit differently by bringing you voices from all of these different spheres.
And Horan happens to a brilliant guy. He's one of the top executives in CFA Institute and previously ran the private wealth section. He holds a Ph.D. in Finance and Economics from SUNY at Buffalo, and Certificate in Investment Performance Measurement as well a CFA designation.
I wrote about the CIPM
recently because I believe transparency will come to be more important to RIAs serving UHNWIs in the years ahead, and CIPMs can help RIAs create a track record compliant with the Global Investment Performance Standards (GIPS). Steve Horan will talk about how CIPMs can help RIAs create a GIPS-compliant track record that can be used in marketing and advertising materials.
Point is, connecting A4A members, who are predominantly financial planners, with best practices from outside the CFP world, makes me happy. Let me know if it has the same effect on you.
Stephen Horan’s webinar on Friday
will be eligible for continuing professional education credit for CPAs, CFPs, CIMAs, and other financial advice designations. If you’re an A4A member ($60 annually), you can see all sessions 24/7 and receive many other benefits.
Because of the glowing praise I have lavished on CFA Institute, I want to point out that CFA Institute is not perfect. CFAs have no annual professional education requirement and that’s something CFPs will want to ask Horan about at the session Friday. He will also be speaking about CFA Institute initiatives for all kinds of advisors—including those who are not CFA charterholders.