Who Certifies a CFP?

[00:00:00] Speaker A: Hello and welcome everyone to the Annuity Straight Talk podcast, episode number 163. My name is Brian Anderson, founder and creator of AnnuityStraightTalk.com second to the last podcast of the year. Going to talk about something that has been nagging me for a little while, like what you hear. Please like subscribe or comment on any of your favorite podcast platforms or on YouTube. Please share it with your friends. Someone who could use a different perspective. Anyone out there who could challenge me and tell me I'm off base would be great because steel sharpens steel and I'm ready for a challenge at any point in time. I'm going to talk about the certified financial planning designation that everybody thinks is so important right now. But before I get into that, I'm wearing this hat again for Montana Marbled Meats in Polson, Montana. It's a ranch to butcher shop organization. Family grown, family owned. And I mentioned it several episodes ago. They will ship overnight. But I think in that podcast and the video editing the phone number got cut off. And so what I'm going to do ahead of the Christmas season, I'm going to say the number again. 406-883-MEAT M E A T. Hopefully you know how to spell it. If you can't, then you don't deserve it. Anyway, if you call them and tell them that I sent you, the first 10 people will get free shipping to wherever you are. Now I should have thought about this a couple weeks ago, but I didn't. They do incredible Christmas prime rib, but maybe you can get it in time for New Year's or I personally think that prime rib is acceptable on any occasion. Prime rib is the occasion or anything else they do call them. 406-883-MEAT M E A T. I will pay shipping. Just say Brian Anderson told me I could order whatever I want and he will pay for shipping. You got to pay for what you buy. Get some rib eyes, get some of the good stuff they bring. They've got all sorts of good products. It's very clean, very homegrown. All the best. I will pay for shipping first 10 people. And this offer is good until January 15, 2025. Keep it in mind. And I'm going to keep bringing it up because I think everybody should enjoy the best things in life. And one of the best things in life is Montana. Marble me in P Montana. Now let me share my screen and we'll talk about this. If you want to make an appointment with me, you can do so on the top right corner of Any page on annuity straight talk.com schedule a call and we're going to show it right here. See, right here, if you're looking at the YouTube video, top right corner, it says schedule a call. Plug it in, fill out the fields. I will call you. Okay, so topic of this episode is who certifies a cfp? Certified Financial Planner. Certified by who? Right. It's considered to be the gold standard of financial services certifications. This is. This designation is granted by the Certified Financial Planner Board of Standards. Chicken and egg kind of thing. I think the certification, if you look at it, it was sometime in the early 70s. And the board to administer and regulate the program was started as a nonprofit in 1980. So maybe they're keeping themselves in check, I don't know. But it's kind of like the Pentagon being asked to audit itself. We have investigated ourselves and found no evidence of wrongdoing. I'm not. It's not a bad thing, but I don't think it's that great either. And I'll tell you where it's good and where it's not so good. So before going any further, I need to mention there are a lot of guys that I've made contact with through this website and throughout my career that are CFPs. And I've got a lot of respect for many of those people. Mentors, colleagues, and even regular followers who chip in and offer a perspective or an opinion. But they've inspired me to continue doing what I'm doing. They've challenged me to become better at what I do. So lots of these guys have verified my research or offered new perspectives to help me refine what I share to make this website as good as it is right now. And I'm truly grateful for their contributions. I'm not picking on any of those people. The reason they were beneficial to me is not because they were designated as a cfp. It's because they are good people with DES experience in the business. It did not take some initials to make them good at what they do. It's my whole contention. So over several years, I've seen that consumers have been advised in financial publications and otherwise only seek advice from a certified financial planner because apparently those are the only people who know what you should do. And if that's the case, you best believe there's money behind it and somebody is getting paid to do it. Now. Recent reports, more than 100,000 certified financial planners nationwide and an annual fee. Got to pay a fee. It's all about money, right? Got to pay a fee of $455 a year, index to inflation. So it goes up. There's tens of millions of dollars available every year for this nonprofit to do whatever type of work they do now. I'm sure they send emails, and if I did it, I'd get regular communication from them and maybe I'd get an opportunity to pay a little extra money for my continuing education. That's a requirement to keep the designation. I've never witnessed them doing advocacy work in the industry or taking responsibility for the recommendations made by their certified professionals. There's a little bit of a rub there for me. So I will admit that it's a good education if you get through the coursework. But after, like, I'm going on 22 years, I got it all the hard way. It wasn't that easy for me to come out of pocket for a few thousand bucks. I think back in the day, I had to travel somewhere, take a weekend of classes. It was a plane ticket and a thousand bucks and this and that. I don't know what it was or how it's changed, right? But I remember probably seven or eight years ago, I thought, hey, maybe I'll just like put those initials on my tag. Because college coursework. I got a finance degree was supposed to be part of it, so. Well, you have a finance degree, then you can bypass the coursework part. Just take the test. I've taken practice tests. They're not that hard. It's a lot of information, but again, I got it over 20 some years in the business, but I didn't like. I just never really thought I had the time or the money to do it when it was something I wanted to do. And it amounts to a lot of book learning that I already had. And it's not anywhere close to what real world experience will provide. The combination of the two is what is extremely important. So just the designation doesn't give you what you need as a consumer. You need that along with a lot of real world experience. Those are the guys I know, the guys that I trust, the guys that I believe in that will help me refine everything that I do. It's the designation, the education, Right. So it's just the same as the continuing education that I talked about last week. Sure, I learned about the rules, technical definitions, regulatory changes, but it didn't do anything to help me analyze products and strategies. That's where the problem really comes in. When I developed the knowledge that I have, the information was not available anywhere online. So I had to go find it myself or create it. And that's why I've created a lot of the strategies or philosophies I have. And that's again, probably why a lot of these CFPs, the older guys that are more experienced are coming and seeing, hey, maybe I'm a little bit younger and I this is new perspective. I recognize their benefit to my business, they recognize my benefit to theirs. There was no one available to teach me. So if you're telling me that I have to get more formal education just to add some credentials to my name, thanks, but no thanks. So this would not be news or anything I feel important enough to share if I hadn't seen several cases of CFPs displaying abject incompetence in retirement planning. Just last week there was a trust company and a bank in somewhere in Georgia who said, well, we're CFPs and we know what they're doing and I can tell you I'm not going to share the case, but they were absolutely doing the wrong thing and not disclosing all the information to the client. They were CFPs, so they had the formal education. They didn't have the real world experience to do the right thing that they were supposed to do. And again, there are really good people with the CFP designation, but there are a lot of idiots as well. And this is a sad part of this business. The attrition rate, 99% in the first five years if you make it through. There's a lot of guys that'll like work in a bank for 20 years and they'll take over a book and they have no experience in the management of money or the navigation of financial services aside from banking functions. So there's a lot of that stuff that happens. And it's not the certification that makes us good at what we do, it's the experience and personal dedication to a work ethic that sets us apart. So I know a good one when I see one. And those guys recognize me as well because it's been years and years of working hard. Now I can only speak for myself when I say that getting to this point in my career required a substantial amount of sacrifice. I'll bet that several of these other guys have also, but I don't know that for sure. And at this point, paying some nameless, faceless corporation to bless me as trustworthy seems absolutely ridiculous and a certain waste of money. So the fiduciary standard is something that is important to a lot of people and it gets kicked around a lot and that says that an advisor must act in the consumer's best interest. Now I think that is a load of bull because no other person besides you can truly know what's in your best interest. People ask me if I'm a fiduciary. Well, I try to be, but I'm not on a sales pitch. Guys that say I'm a fiduciary like to assume that their opinions won't be questioned. Well, I'm a fiduciary, so this is in your best interest. The only true fiduciary is you. You are the only one that knows what's in your best interest. Risk tolerance, income needs, right, assets income, Medicare, parts ABC claim, Social Security. You are the only one that knows what's in your best interest. I'm the only one giving you education so you can figure that out. It's a lot of money at stake. It's the rest of your life. The most peaceful, peaceful part of your life. You better start educating yourself. So the best example I have is in a newsletter that I wrote almost six years ago. I'm going to take a second, I'm going to look at this right? You can go to the newsletter page. I'm going to link this in the newsletter. But CFP search and I'll get it. I can't believe a CFP designed this plan. This is really interesting to me. Now I've got this whole thing here and there's an entire newsletter on the case study. But this couple, they were in their mid to late 50s, they had a $1 million portfolio and they wanted to spend $60,000 annually. So a 6% spend rate and I think there was, they wanted an inflation adjustment planned into it. Damn sure needed some growth. So they got me in 20, late 2018, early 2019. So there's a newsletter on here and that was dated January 22, 2019. All right, the whole case study. So they put the plan into place in 2016 when rates were really low. So they're almost nothing. This is when money markets were a quarter of a %, and the CFP recommended 1/3 of the money it was out of 1 million. It was $340,000 in cash going into cash and the rest of it going into three different annuities. So none of it yielded much of the time. So there was no room for growth in the portfolio and 6% spend out rate in 2016 when rates were low. They sure as hell needed growth to meet the income goal and inflation. So I want you guys to sit here and think they put a third of their money into cash. That was Yielding nothing and two thirds of their money into deferred annuities that were built on low rates. Not all of them are bad. A couple, one or two of them were kind of, oh, geez. Right. But can you imagine if you hadn't had any in the mar. Any money in the market since 2016? Whatever they would have left in the market would have tripled since then. So this again, like I'm an annuity guy. I would have taken the same situation. I'll tell you what I did with it, because I got an exact same case study from an identical couple at the same point in time. So maybe the CFP board revoked his certification, but they might be too busy golfing somewhere. I don't think they get into regulatory stuff. Right. They're just there collecting fees. I don't know. Maybe they have a private jet. It might be in the Cayman Islands. I'm not sure what they do. Somebody's making a lot of money on it. And is it really in your best interest? I don't know. You be the judge. So I look back at it when I met this guy in 2019. As luck would have it, I put a plan in place for Bob and Lynn at about the same time in 2016. A portfolio and goals that were nearly identical. Same retirement, same age, same spending goals. All I did then was replace their bond portfolio with an annuity, which turned out to be great because rates rose and they dropped, and then they rose substantially. Now their bond portfolio would have got crushed over the past eight years. The annuity would allow them to access cash in early years of retirement, regardless of how the market performed. They were nervous about the market, and I said, you might be nervous. Just put some aside. It's always going to be there, inaccessible. But leave it for growth. At some point, it's going to pay off. Now they retired a few years later, so probably 2018, 2019, 2020. And the annuity had done okay. Not great, but it was good. It was there. Market performance was solid. So whatever they left in the market had grown to what they started with in the first place. So they had market assets plus the annuity. They bought another annuity. They said, yeah, well, now we would like to have, like, a guaranteed baseline income on top of Social Security. Right. They got that. They left another big chunk in the market. Now I'll probably have my, like, a review with them. We'll talk to them sometime next spring, because I think we got one of their contracts coming due. I don't worry about them too much because they've got, I would guess maybe three times what they started with. By now you guys know what the market did. It's no secret. And they've got a guaranteed source of income for the next 20 some years. And they've got a big pile of safe cash that's growing consistently. So which was better? And I wish the guy that I met in 2019 who got some crazy, ridiculous, insane plan from the CFP, hey, how about you don't grow any of your money. That's. And that's one guy. I don't know who the CFP is. I like it's one guy. And they're not all like that. But again, the designation doesn't give you the competence, so we'll see. But my guess is they have two and a half times what they started with, along with some guaranteed income and a really safe, solid, safe pile of cash for life's emergencies. Isn't that what we're all after? Right? So I didn't figure out how to do that by taking a multiple choice test. Just like that test isn't to blame for the other advisor's recommendation to do all cash and annuities. It's about the competence of the person, not the certification that some nameless organization organization provides, however valuable it may seem. The CFP designation certifies an educational element but says nothing for competence. The good ones I know are not good because they took a test. They are good because of their work ethic and years of experience. Now go ahead and seek advice from a cfp, but you're taking a shot just like you are with anything else. And I would say might not be a bad guy, a bad idea to get a second opinion. So this has been episode 163. I wish you all a Merry Christmas. I'll be back maybe before the new year and maybe we'll do it after the new year. But don't forget, call Montana Marble meets order. Order whatever you want. You tell them I sent you. I will pay for shipping, I will send it ups overnight, whatever you want. Might be too late to get prime rib and next year I'll do it a little bit earlier and the first 10 people will get it. Okay? So thank you for joining me for episode 163. I will be back when I'm back in the next couple of weeks. Please like subscribe or comment on any of your favorite podcast platforms or on YouTube or Schedule A call top right corner of any page on annuitystraighttalk.com and we'll get after it. I'll help you solve your problems. You guys have a great day. Merry Christmas, and I'll talk to you soon. Okay, Bye. [00:18:37] Speaker B: You have been listening to Annuity Straight Talk. The preceding information is for informational and educational purposes only and does not represent tax, legal or investment advice. The views expressed by guests on this program are their own and do not necessarily reflect the views of Annuity Straight Talk or its partners. No information presented today should be acted upon without meeting with a qualified and licensed professional. It is important that you read all insurance contract disclosures carefully before making a purchase decision. Decision guarantees are based on the financial strength and claims paying ability of the insurance company.