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"Overcoming Economic Slump with Self-improvement … Now is the Age of 'CFP' Study"
19 February 2009
30% of applicants successful
Indispensable factor in securing VIP clients
CFP certification is booming in the insurance business.
To do business with VIP clients, this certificate is essential.
According to an announcement by the Korea Financial Planner Association on the 15th, there were 2,496 applicants to the 14th Certified Financial Planner (CFP) test conducted last December. This is a 4-fold increase over the 584 applicants of the 1st test in 2002.
Among the successful applicants of the 14th test, there were 182 bank employees and 181 workers in the insurance business. Considering the results of the 1st test when there were 62 bank employees and 21 workers in the insurance business, it is obvious that the pass rate in the insurance business has increased drastically.
An FP Association official said "Until last year, bank employees accounted for 50% of the successful applicants because they have more time and better conditions for the test than the insurance planners. However, the successful applicants in the insurance business are steadily increasing, and right now their pass rate is similar to bank employees."
The reason for the increasing pass rate of CFP in the insurance business is the importance of CFP certificate in improving insurance planners’ business competitiveness in securing VIP clients. Recently, due to the increasing interest in investment techniques and preparation for retirement, middle-income clients also prefer planners who can give financial planning services.
Due to the unlimited competition in all financial businesses resulting from the execution of the Capital Market Consolidation Act, one can only survive by providing comprehensive financial planning for overall life such as insurance, funds, inheritance, and donations.
In light of this, not only regular planners but executives of insurance companies have tried to obtain CFP certification. Though insurance companies said CFP certification does not affect monetary rewards, it is generally regarded as having an influence on promotion and business management.
Despite the growing importance of CFP certification, insurance companies aren’t providing aggressive support. They only reimburse application fees and tuition for successful applicants or provide online lectures.
There are some branches that have conducted lectures and camp training for their planners to reinforce business competitiveness, but they are in the minority.
On the other hand, the CFP certification boom in the insurance business is causing a problem of planners breaking away from their companies, which remains as an obstacle to tackle for insurance companies.
Financial planning is not simple ‘investment techniques’ to increase money but financial preparation for all situations throughout life, so financial planners must uncover the exact financial status of clients.
Also, they must understand the client’s values to make a portfolio that considers the priorities of his/her life such as inheritance or retirement.
In this process, certified planners must have a special relationship with clients because they must learn about very private matters like marriage and health. Exclusive planners; on the other hand, can only recommend their company’s products.
An industry insider said, "A Financial Planner belonging to an insurance company must recommend the company’s products. So after achieving CFP certification, more and more planners go to an independent agency or professional financial planning agency."
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