Whether their needs are simple or complex, all Canadians should have a financial plan says Keith Costello, president and CEO of The Canadian Institute of Financial Planners (CIFPs) association. This conviction, shared by CIFPs members, is driving the association’s efforts to take financial planning to a new level in Canada, he says.
Interviewed in early May at CIFPs 6th Annual Conference held in Orlando, Florida, Mr. Costello says that while many people may profess to do financial planning, the reality is that often Canadians have no written financial plan at all. This is a serious issue, he says. “We think that it is a cornerstone of society that you need a financial plan. It is paramount that everyone has a financial plan.”
Raising public awareness about this need is a key component of CIFPs’ strategy, adds Mr. Costello. To help achieve this goal, CIFPs is looking at holding financial forums across Canada for members of the public.
“Our strategy is we’re going to get our good planners out in front of the public and teach people how and why they should financial plan. Our association thinks that is the biggest issue.”
Spreading the message about the need for financial planning will also help advance another key strategy of the association. Mr. Costello says many CIFPs members would like to be able to make a living strictly from fee-based financial planning. But, at present, most planners have difficulty sustaining a living exclusively in this field. “People are doing taxation prep, investment sales, and other activities to really subsidize financial planning…We feel very strongly that we’d like to turn this into more of an industry, rather than just a process.”
There is nothing wrong with working in other areas of the financial services sector at the same time as financial planning, he underlines. Many CIFPs members, however, would like to have the option of focusing entirely on fee-based planning. To make this possible, creating more demand among the public for this service is essential.
Mr. Costello adds that CIFPs’ annual conference offers an opportunity to further the association’s goal of taking financial planning to another level.
This year’s conference, which was held in Orlando to highlight the cross-border theme of Where will your clients retire? The Snow Bird Plan, attracted about 500 participants – a record number for CIFPs.
In addition to continuing education, the conference gives financial planners a chance to share ideas, best practices and network with their colleagues. “They’re not just here to get professional development or CE credits…If you look at our mission and vision, we’re trying to build a community.”
The conference also enables planners to meet colleagues with expertise that might prove beneficial if they have a complex issue with a client. This kind of networking will help them better serve their clients. “I think it bodes well for the public when you have planners getting together,” says Mr. Costello.
CIFPs presently has a membership of about 3,200 members. The association’s business plan objective is to have 5,000 members minimum. Before being accepted into the organization, CIFPs members must have the Certified Financial Planner (CFP) designation and be in good standing with the Financial Planning Standards Council and regulators.
The organization, presently, is at a stable level and in good shape financially, he adds. “So we’re in a situation where we can continue to grow correctly, from a quality perspective…We could have lots more members if we lowered our standards,” but CIFPs prefers to build “slow and sure,” Mr. Costello says. “I’d rather have 4,000 high quality members that are really doing financial planning than have a whole bunch of people in the tent who are not tied directly to our mission.”
He adds that the recruitment process is labour intensive. “It may take up to a year from where the conversation starts to the point where someone will say, ‘yes I’ll join.’ So, we see reaching the 5,000, but it will be a slow climb over the next few years,” explains Mr. Costello.
In terms of content, he believes this year’s conference was the best so far. “We’re very pleased…In talking with the delegates, they’re very impressed with the content and that ties in with our strategy because we want our voice to be heard.” Despite the warm and sunny weather outside, the conference sessions were well attended because CIFPs members are serious about financial planning, he adds. “They’re here to learn. They’re here to get the gold standard.”
The August edition of Focus on Financial Planning will include coverage of some speaker presentations from the conference in Orlando.
CIFPs 7th annual conference is scheduled to be held in Halifax from June 7-10, 2009.
Annual report highlights
In its annual report for 2007, CIFPs noted that the integration of its newly acquired educational arm, The Canadian Institute of Financial Planning (CIFP) was one of the main achievements of the year. In addition, to providing members with continuing education services, CIFP also offers a program of study to prepare students for the CFP exam delivered by the Financial Planning Standards Council.
In the report, CIFPs notes that one of its main financial objectives for 2007 was to pay down the acquisition debt incurred to purchase its educational arm. CIFPs acquired it from The Investment Funds Institute of Canada for $1.1 million last year. The association has made major progress toward its objective and is expected to retire the remaining debt of just over a half million dollars by June 2009.
In 2007, CIFPs had chapters in Vancouver, Edmonton, Calgary, Regina, Kitchener/Waterloo, and Mississauga. The annual report says that five new chapters are scheduled for development in the communities of North Bay, Ontario; Toronto, Ontario; Niagara Falls, Ontario; Halifax, Nova Scotia; and Fredericton, New Brunswick.
In the annual report, Miklos Nagy, CIFPs’ incoming chair for 2008, also discussed highlights from a strategic planning process. “Feedback from members…clearly points to their desire to see financial planning as a recognized profession, the need to encourage and help planners who wish to adopt a “fee-based” business model, and advocacy efforts to promote self-regulation of financial planners versus direct prescriptive regulation.”
The report states that members were also surveyed about the possible name change of CIFPs to a name that might better represent its mission and vision. “Results are being tabulated and this issue will be resolved by this summer.”