History of Financial Planning Development,
by James Sim, CFP


The development of financial planning services as a profession revolutionised the financial services industry in the final decades of the 20th century. Created in the US, the financial planning profession is now gaining tremendous worldwide recognition through the global organisation Financial Planning Standards Board Ltd (FPSB).

Post WWII: Trend towards comprehensive financial planning
When World War II ended in 1945, the American spirit was one of exuberance and confidence. The landscape of the financial services industry in the US then was generally fixed, with governmental regulation of individual services and product types. Securities firms provided securities products and services; Insurance companies provided life insurance products and services; Banks provided their banking and deposit services; while Attorneys drafted wills and created trusts; and CPAs filed tax returns and gave tax advices.

From 1945 to 1970, the financial services field remained for the most part essentially fixed with a segmented regulation and provision of financial services. However during this period, creative thinkers and salesmen in both securities and life insurance fields kept thinking and experimenting with the concepts they felt might enhance their work and provide more comprehensive and integrated services to the consumers.

This movement towards what would become comprehensive financial planning services is exemplified by Colonel John D Marsh. From 1929 to 1942, Marsh was a successful life insurance salesman. In 1953, he formed Marsh Planning & Investment Company (MPIC) and began to add securities to his life insurance products, creating what would become known as variable annuities. Marsh's vision went beyond life insurance sales - he wanted to provide comprehensive planning that would meet more than one aspect of a client's needs.

Creation of the CFP credential
On 12 December 1969, a group of 13 people who shared Marsh's enthusiasm for integrated and comprehensive financial services met in Chicago to discuss their vision of a new profession. The meeting was chaired by Lewis G Kearns at the request of Loren Dunton. The other members were Robert Leshner, Herman W Yurman, Jerrold Glass, Hank Mildner, Lyle Kennedy, Gerald Zipper, Herbert Abelow, Walter Fischer, John Hawkins, Charles Weitzberg and James R Johnston. The meeting led to the creation of the Certified Financial Planner (CFP) credential and the establishment of two institutions that formed the foundation for the financial planning profession: a membership organisation named the International Association for Financial Planners (IAFP) and a new college named the College for Financial Planning.

IAFP and the College for Financial Planning worked together to organise in 1972 the first class of students for a course of study that ended with conferment of the CFP designation. The 35 graduates of the first CFP certification class formed the Institute of Certified Financial Planners (ICFP) immediately after their graduation in 13 October 1973. The work of ICFP, alongside the IAFP and the College for Financial Planning, generated great interest in the financial planning profession, and the numbers of CFP certificants grew each year. 
In 1985, oversight of the CFP certification was passed to a new enitity, the International Board of Standards and Practices for Certified Financial Planners (IBCFP), which was established to develop the CFP certification programme beyond an educational curriculum. By the time IBCFP changed its name to Certified Financial Planner Board of Standards, Inc (CFP Board) in 1994, it had established experience and ethics requirements that, along with a comprehensive examination and the educational curriculum, became known as the '4Es' of CFP certification. As a professional self-regulatory organisation, CFP Board benefits the public thorugh its administration of ethics and competency standards for CFP certificants in the US.
Interest in CFP certification grows
In response to growing interest in the CFP certification programme from outside the US, CFP Board established in 1990 an international assembly of financialplanning bodies, the international CFP Council. The Council was designed to promote the professionalism of individuals and organisations offering financial planning services and to ensure that such services are offered in an ethical and competent manner throughout the world. In 1995, there were 31,512 CFP certificants in the US and 1,155 CFP certificants outside the US, making up a total of 32,667 CFP certificants around the world. By the end of 1999, that number grew to 34,656 the US and 18,067 outside the US in 10 countries. From 1995 to 1999, the number of CFP certificants around the world grew by more than 60 percent.

The early years of the 21st century brought changes to the financial planning organisations in the US. In the year 2000, the membership organisations supporting the financial planning profession consolidated, with the ICFP and the IAFP merging to form The Financial Planning Association (FPA). In 2004, the administration of CFP certification outside the US was passed from CFP Board to a new organisation, the Financial Planning Standards Board Ltd (FPSB).

At the FPSB Council meeting held in October 2007 in Brazil, in which FPAS Chairman of Membership Board, James Sim, and FPAS Council Member, Kimmis Pun, had participated, CFP Board became a part of FPSB to support its work to benefit the global community by establishing, upholding and promoting worldwide professional standards in financial planning. FPSB now has a total of more than 105,000 CFP certificants in 24 territories around the world. The affiliate territories of FPSB are Australia, Austria, Brazil, Canada, China, Chinese Taipei, France, Germany, Hong Kong, Hungary, India, Indonesia, Ireland, Japan, Malaysia, Holland, Republic of Korea, Singapore, South Africa, Switzerland, Thailand, UK and US.

Sources: 1. A white paper, A History of the Financial Planning Movement, by E Denby Brandon and H Oliver Welch. 2. www.cfp.net. 3. www.fpsb.org.
The Wheel Of Wealth.com
Advertise For Wealth
Home   What is SOW?   Who are we?   WOW   Wealth Forum  
Advertise For Wealth   Disclaimer
   Terms of Use  
Privacy Statement   Newsletter   Testimonies   Contact Us
Member's Resources:
Wealth Resources By Country
Financial Capitals of the World:
Copyright © 2008. Strategy of Wealth. All Rights Reserved.