A Timely Discussion With the CFP Board

During a recent interview with PLANADVISER, Kim Hayes, director of corporate relations for the Certified Financial Planner (CFP) Board, took time to reflect on the past 18 months, as the United States and the world have faced tremendous challenges—some caused by and others merely exacerbated by the coronavirus pandemic.

As Hayes observes, the pandemic hit working women especially hard, as women account for nearly 3.8 million net jobs lost since February 2020, according to data from the U.S. Bureau of Labor Statistics (BLS). Fast forward to August 2021, Hayes observes, and the gender disparities in the pandemic’s impact remain.

The government statistics show that nearly all the women who returned to the labor force in June were unemployed and looking for work—that is, they were not merely sitting on the sidelines and waiting out the pandemic. They wanted to and needed to work but could not find employment before securing a new job in June.

Given her role in promoting the goals and objectives of the CFP Board, Hayes says she sees these statistics as a real wake-up call for the financial services and investment advisory industry.

“Where should women pursue stable, post-pandemic employment?” Hayes asks. “Well, those of us in the advisory industry know how meaningful a career in this sector can be, and we know the enduring power of financial advice.”

Hayes points to survey data her organization collected recently that shows more than half of female CFP professionals indicated strong career satisfaction. Additionally, they were more likely than their male counterparts to report high personal satisfaction with critical skills, including confidence in working with clients and the ability to earn client trust.

At the same time, Hayes notes, her organization’s survey data shows CFP professionals reported a 78% increase in the volume of client inquiries as the pandemic progressed. Americans have been seeking financial advice amid the pandemic and recovery uncertainty, she explains, creating opportunities for more individuals, including and especially women and people from more diverse cultural backgrounds, to join the profession.

“We have all also seen the statistics about turnover in the financial advisory industry, with as many as 40% of advisory professionals expected to retire within the next five to 10 years,” Hayes says. “With respect to my organization, we feel that the CFP designation can really be an important part of the transition to a younger and more diverse adviser industry.”

On this point, Hayes can speak from direct experience, as prior to joining the CFP Board, she was the director of financial planning at Waddell & Reed Financial Inc. in Shawnee Mission, Kansas, where she led financial planning activity and coordinated training efforts for advisers. Hayes previously served as a financial planning consultant at the firm and worked in financial planning and education planning service roles at other firms in Kansas.

Hayes earned her CFP certification in 2003 and has since been actively involved with the financial planning profession. She says financial planners who attain the CFP designation have many options, including starting their own business or joining a large service provider or a small independent firm. Increasingly, part-time and fully remote positions allow for flexibility that might be attractive to broader groups of people.

“When I started in this industry, so many people thought the only way to do business was as a sole practitioner running your own firm all by yourself, more or less,” Hayes observes. “Now, we have moved a lot more toward a team-based structure, in part because a person working by themselves just cannot scale and maintain their practice in today’s highly competitive environment. So many teams are adding new financial planning capabilities, even if that is not what the lead adviser or advisers are doing with their time. This balanced approach should help to make the industry more inclusive.”

Hayes says there’s a very strong demand in the industry for the CFP designation, and she sees two primary reasons why.

“The first is that busy and growing firms are looking for people who are willing to make a significant professional investment themselves,” Hayes says. “Going through the rigorous amount of study that it takes to earn the CFP designation really proves you have that depth and breadth of knowledge needed to serve clients in an evolving industry.”

The second, she notes, is the aforementioned concern about adviser industry turnover and a lack of sufficient succession planning.

“Firms are stepping on the gas pedal so that they can create good succession structures and keep their clients’ assets in-house,” Hayes says. “We have seen a lot of firms adding more services to meet growing client demand, such as virtual advice centers and call centers that are staffed and supported by CFPs.”

Hayes says the Regulation Best Interest (Reg BI) framework now being enforced by the U.S. Securities and Exchange Commission (SEC) has also had a growing influence on the industry.

“The demands of Reg BI really emphasize the planning aspect of the adviser-client relationship,” she says. “Being able to prove how you got from point A to point B, from the client’s situation to the actual piece of advice given, is crucial, and CFP professionals can be very helpful on that front.”