What Does FPA's Partnership With The Accredited Financial Counselor Designation Mean To CFPs?

Wednesday, February 01, 2012 10:50
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What Does FPA's Partnership With The Accredited Financial Counselor Designation Mean To CFPs?

Tags: CFP Board | financial planning

 

The Financial Planning Association recently announced an alliance with the Association for Financial Counseling and Planning Education. AFCPE provides designations to financial advisors and you have to wonder if the partnership could affect the value of the Certified Financial Planner designation.

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“The joint efforts will provide significant value to the constituents of FPA, the nation’s largest membership group for personal financial planning experts and AFCPE, which is dedicated to educating, training and certifying financial counselors and educators,” says the January 23 press release issued by FPA.
 
FPA faces some serious challenges, and has experienced a slump in membership at FPA. Unlike other industry membership groups, such as the CFA Institute, the Investment Management Consultants Association, American Institute of CPAs, and AFCPE, FPA does not award a designation to its members. In an age of social networking, where advisors can connect without the help of a professional association, FPA’s business model could be outmoded. That’s why FPA’s alliance with AFCPE could be provocative.
 
FPA’s ranks have long been dominated by CFPs. If FPA is seeking to grow by putting its imprimatur on additional designations—those supported by AFCPE—it’s fair to wonder whether the importance CFP designation will be diluted.
 
AFCPE licenses the Accredited Financial Counselor designation. Its purpose is to “develop the profession of personal finance by promoting linkages among educators, practitioners, researchers, and with other relevant groups,” according to its website.
 
AFCPE looks like a credible young professional association. According to Form 990s filed with the IRS, AFCPE generated about $1.3 million in revenue in 2010 and it first filed a Form 990 in 2007. About $621,000 of its 2010 revenue was generated through its conference and course, while $489,592 was generated on educational activities, and $195,711 of revenue came from membership dues. Many members of its Board of Directors are educators.  
 
It will be interesting to see how FPA’s partnership with AFCPE affects CFPs.

 

Comments (9)

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vguettlein
It's clear FPA is desperate. Whether this will be meaningful or not is dependent on whether this new accrediting body has real designations, or whether they are just offering more alphabet soup. The other designations you mention in this post all require some serious effort and experience to achieve. Many of the meaningless designations can be had in a weekend and a little bit of cash. I haven't looked into AFCPE, but I think the quality of that body will say volumes about this alliance.
vguettlein , February 01, 2012
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bramsay
While the AFCPE appears to be coining the term "financial counseling" to describe services provided by their designation, it appears that their members provide advice only on debt and cash flow to financial struggling individuals. Of the folks listed in their testimonials section, I did not find one of them licenses or registered for investments or insurance.

This site from a member seems to describe the emphasis.

http://www.brossmoney.com/overview.html

That is a portion of our society that is pretty much not advised by CFPs- we refer folks to legit credit counseling organizations.

I don't think the use of "financial counselor" is a very good idea since their members might feel that they can or should provide advice on issues that require licensing and or registering. Something like "Debt and Cash Flow Counseler" would be preferable.
bramsay , February 01, 2012
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vguettlein
2 courses, $900 bucks. Good for continuing eduacation and professional development, but...
vguettlein , February 01, 2012
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bramsay
Here's the joint press release

http://www.prnewswire.com/news-releases/fpa-and-afcpe-join-forces-on-new-initiatives-137905043.html

It states

"AFCPE is excited to team with FPA to advance the profession of personal finance as we develop the complimentary relationship between financial counseling and financial planning"

So AFCPE indicates that their members are not financial planners, still not feeling great about the term financial counseling. I don't know that I'm going to tell someone in debt trouble that they need a "financial counselor", but maybe it will grow on me.

Here's a local Raleigh credit counseling non profit that has AFCPE certificants.

http://www.visioncredit.org/contact-us/

I might actually get in touch with them and invite them over to our office. It would be nice for us to know some capable people at a respectable credit counseling organization.
bramsay , February 01, 2012
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agluck
Even if the AFC designation is different from the CFP, it could confused consumers and wind up competing.
agluck , February 01, 2012
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bramsay
Andy, I agree on the potential confusion, though I doubt even a small percentage of AFCPE's members are currently licensed or registered for providing investment and insurance advice and/or sales, so I don't think there is currently any overlap in clientele.

Yes they could theoretically wind up competing, but it would take a push to become licensed from the AFCPE (and/or its membership) for that to change, and its difficult for me to see a credit counseling office putting in place the infrastructure to move beyond their current services, much less the public feeling good about going to a credit counseling office to help them build significant net worth.

I also don't think its likely that a lot of CFPs will make credit counseling a large part of their business.

Have you thought about contacting Marv Tuttle to get his take?
bramsay , February 01, 2012
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vguettlein
As I see it, FPA is further relegating themselves to the ash heap of history. If we are trying to build our professional recognition, this seems a step in the opposite direction, to me anyway, and does not create any inspiration to re-join FPA. Primerica reps did a lot of this debt counseling, etc.
vguettlein , February 01, 2012
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agluck
Hopefully, Marv will comment and let us know. He's an A4A member. But I think you're wrong about AFCPE being only about credit counselng. From their home page: "Our goal is to build, support and ensure the integrity of the Personal Finance profession."
agluck , February 02, 2012
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mtuttle
I appreciate the interest in our collaboration with AFCPE. The CFP mark is the recognized standard of excellence for personal financial planning and FPA has pledged its support of it countless times. We see the AFCPE relationship as supporting our efforts of creating better financial planning practitioners by providing them even more opportunities to access education programs and professional communities that support the financial planning process at all stages.

For an understanding of this collaboration, here's an update we recently sent to members (http://www.fpanet.org/professionals/AboutFPA/FPANews/AFCPE/).

Look forward to hearing others’ perspectives…
mtuttle , February 03, 2012

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