CFP Restructures To Boost Diversity in Financial Advisement

The CFP Board is creating a new entity to advance financial planning as a career; separately, Broadridge’s Fi360 is funding 100 investing certifications for women and people of color.

The Certified Financial Planner Board is splitting itself into two nonprofit entities with the goals of increasing diversity in professional finance and serving the growing demand for financial planning and advice in the U.S.

The Washington, D.C.-based nonprofit that sets and administers the widely used certified financial planner certification said Wednesday the board has decided to oversee two entities in part to accomplish its mission of widening the umbrella of financial professions in the U.S.

The first organization will focus on the financial professional workforce will be called CFP Board Standards, with missions to advance “competent and ethical financial planning and expand CFP professional diversity for the benefit of the public,” according to the announcement. The second will be the CFP Board Center for Financial Planning, which will focus on developing and administering CFP certification. The CFP Board will oversee and have voting rights for both.

“As more Americans seek financial advice, firms large and small are embracing financial planning as a core service,” read a statement from Daniel Moisand, CFP board chair, and Kevin Keller, the CFP Board’s CEO. “However, with tens of thousands of financial advisers expected to retire in the coming decade, our country faces a dearth of competent and ethical financial planners.”

The board’s current structure as a 501(c)(3) entity limits the CFP Board’s activities in terms of how it promotes financial planning careers, according to the announcement. The new CFP Board of Standards will be a 501(c)(6), which the nonprofit noted will allow it to promote the benefits of a financial planning career. The CFP board noted that while the move will create some internal changes, it will not change the CFP certification requirements or process for creating standards.

Growth, But From a Small Base

The CFP board made the announcement shortly after releasing its latest diversity statistics for the CFP profession on January 19. In that release, the nonprofit noted that the CFP designation reached an all-time high for new women and racially and ethnically diverse financial professionals.

Of new CFP designations in 2022, 763 went to racially and ethnically diverse financial professionals, or nearly 15% of the 5,214 overall new designations, according to the nonprofit. Meanwhile, 1,519 of new certifications went to women, accounting for almost 30% of the total pool. These certifications represented the most diverse certificate class in CFP board history, the organization said.

Despite these gains, women made up just 23.6% of all CFP professionals in 2022, an increase of 4.4% over 2021. Meanwhile, racially and ethnically diverse professionals stood at 8,715, representing about 9% of the total 95,137 CFPs nationally. The growth rate among this group did come in at 8.5%, representing 2.5 times the overall growth rate for CFP professionals, the nonprofit stated.

Broadridge To Fund Investment Training

On Monday, Broadridge Financial Solutions Fi360, which provides fiduciary training, technology and analytics to the financial industry, announced it will fund training for its Fi360 Accredited Investment Fiduciary designation to an initial group of 100 women and people of color. New York-based Fi360 said the program will be sponsored by Envestnet, a systems provider for wealth management and financial wellness, as well as Choir, a diversity-tech platform and conference diversity certification provider.

“Through this initiative, we hope to play a role in increasing the likelihood that underrepresented individuals will stay in financial services, and [we hope to] help them be recognized for career advancement opportunities,” says Fi360 head John Faustino. “Financial advisers from diverse demographic groups generally have a higher percentage of clients from those groups, and more AIFs in that equation will help increase access to advisers acting in the best interest of investors.”

The AIF designation training provides those responsible for managing, or advising on, investor assets with an understanding of the principles of fiduciary duty, the standards of conduct for acting as a fiduciary and a process for carrying out fiduciary responsibility, according to Broadridge. The training costs vary from $1,595 for an online-only course to $1,950 for being led in person by an individual instructor.

Envestnet is sponsoring the provision of Broadridge’s AIF designation training for 100 individuals from underrepresented populations. The candidates will be identified with the help of Choir, which aims to lift the voices of the underrepresented in the financial services industry. Choir will offer the program to candidates who sign-up for Choir’s Voices platform, or interested candidates can apply directly through Envestnet.

“This partnership makes us hopeful about the future of financial services,” Liv Gagnon, co-founder of Choir, said in a statement. “In order for this industry to represent the world we live in, it’s going to require intention and action from organizations like Broadridge and Envestnet, who are committed to change at a systemic level.”