CFPs Multiply but Still Enjoy Demand

There are nearly 25 times as many certified financial planners in Northwest Arkansas than there were in 1984. Back then, Steve Stewart and D. Patrick Kunnecke — CFPs at Arvest Bank Group Inc. — were the only game in town.

Now, 47 others have the same designation from Fort Smith through the six main cities just up the Boston Mountains — Fayetteville, Springdale, Rogers, Bentonville, Bella Vista and Siloam Springs. Thirty-five of the 49 total are in Benton and Washington counties, including 15, or about 30 percent, in Rogers alone.

All of the local CFPs are in good standing with the Certified Financial Planner Board of Standards Inc., according to the Denver organization’s Web site.

A search of the board’s database showed 191 CFPs registered in Arkansas, meaning that about a fifth of them operate in Benton, Washington and Sebastian counties combined.

CFPs take a “big picture” approach that includes tax management, cash flow, adequacy of insurance, estate planning, fringe-benefit planning and investment advice. By the end of the 1980s, there were only 14 CFPs giving clients a holistic approach locally — and 10 of those were in Benton County.

Stewart — a CFP, CPA and senior vice president/financial adviser at Arvest Private Banking — credits that trend to the vision of Arvest’s ownership. He said executives at the Bentonville chain such as Burton Stacy and Carl Baggett encouraged trust officers to earn their CFPs so that Arvest could give customers with financial management needs “a total solution.”

Arvest even helped employees obtain the education component required for CFPs, and from 1985-1989 the bank brought in John Terry as a consultant to work with 42 of its employees. A former professor of economics at John Brown University in Siloam Springs, Terry, 82, is the author of “Dictionary of Business and Finance” and “The International Handbook of Management.”

Stewart said although there wasn’t much of a market for CFPs during the 1980s, the profession gained great acceptance after national accounting firms and wire houses (brokerage firms) embraced it during the 1990s. Stewart is also a registered principal and offers securities through Raymond James Financial Services Inc., a member of the National Association of Securities Dealers and the Securities Investor Protection Corp.

“There was a cartoon I remember in Forbes that pictured a monkey with an organ grinder, and across the monkey’s chest it said, ‘financial planning,'” Stewart said. “But nearly all of the national CPA firms have planning departments now, and some of their best tax people are typically assigned to that area. The driving force has really been the customers’ desire to have one person who can quarterback a team and coordinate all of their financial affairs, rather than having several good professionals working in isolation.

“We [CFPs] see ourselves as freedom fighters who work to free up customers from the hassle of having to go from point to point to point to reach their financial goals.”

Rick Adkins is CEO of the Arkansas Financial Group, a fee-only financial planning and advisory firm in Little Rock. He’s also international chairman of the Certified Financial Planners Board of Governors, an organization with 41,000 “certificants” in the United States and another 40,000 in 17 other countries.

Adkins said although some professionals who simply sell financial products market themselves as “financial planners,” the CFP designation tells clients they’re dealing with a “certified” adviser. So he doesn’t worry the rapid accretion of CFPs in Northwest Arkansas will saturate the market.

There are 270 million Americans, Adkins said, and only 41,000 CFPs. By comparison, there are nearly 300,000 certified public accountants nationwide.

“By and large, financial planning is a service for high net-worth people,” Adkins said. “We would like to see a day where anyone could go to a financial planner to get holistic advice that’s affordable. We’d also like to see the day when you can’t call yourself a financial planner if you’re not a CFP.”

The latter is one step closer to fruition in the form of House Bill 2192, which has been approved by the Arkansas House of Representatives and Senate and awaits the signature of Gov. Mike Huckabee. The bill, proposed by the Arkansas Department of Insurance, includes language that would make it illegal for insurance agents who only sell products to represent themselves as CFPs.

All professionals who give investment advice for compensation are already required to register with the Securities and Exchange Commission, or if they have $25 million or less under management they can register with their state’s securities commission.

In addition to education requirements, the road to becoming a CFP also includes professional experience and a 10-hour comprehensive exam based on case study applications.

There are two registered CFP university programs in Arkansas: the Walton College of Business in Fayetteville and Southern Arkansas University in Magnolia. The University of Arkansas at Little Rock also offers a distance-learning program that can meet the CFP education requirement.

Adkins, a former UALR professor, said it’s nearly impossible to assign a value to the financial planning sector because there are different fees for different services. The average asset management fee, for instance, might be about 37 basis points.