FINANCIAL PLANNING
- 

The Birth of a Profession : Financial Planning

It has been estimated that 50 million families worldwide have been affected by personal financial planning services delivered by qualified professionals. This total does not include those reading articles, watching or listening to talk shows. Organizationally we can trace the birth of financial planning profession to a single meeting.

The meeting began with 13 men gathered on a Saturday morning, December 12, 1969, in a room at the O'Hare Inn in Chicago. In December 1969, the economic climate was not good. Why had they gathered in Chicago at the dawn of a recession, right before Christmas? They were not looking to sell their products or transact business agreements. They had spent money out of pocket just to be there. They were tired of leaving their financial fate to the roller coaster economy and sitting idly by without a prayer.

All the financial product and service salesmen of the United States were experiencing the same worries. However, it was these few that were driven to find a solution. It had to be done. They did not know one another, they were in different businesses with vastly different backgrounds and their ideas about how to overcome this mounting problem were miles apart. Someone had to bring them together. Something had to be done and needed to be instigated immediately.
 

The Initial Chicago Meeting

At the head of the table, one of the 13 rose to pass out the agenda for this auspicious gathering. Had you never known this man you would not have considered him a vigorous leader, yet you would have felt at ease under his leadership. Even if you knew his background as a salesman, you would not have felt threatened by him in the least.

Loren Dunton was a conceptual salesman, one who believed the key to the sale was sales training. He had been an extremely successful salesman of tangible products, such as silverware and books. He had recruited and trained sales representatives, learning how to replicate his efforts. He created manuals, books, films, training programs all in the interest of the salesman. He advocated the much needed lesson: Forget your product's 'new' improved' features and sell benefits addressed to the specific customer's needs. But Dunton had never sold a financial product. What he had done was trained others on the process of professional sales techniques.

During a sabbatical trip around the world with his family, Dunton was asked about the prosperity of the U.S. and why we were so dependent on a government bureaucracy, Social Security, for the retirement security of our population. The answer was to admit that Americans weren't planning for their retirement. His conclusion was that what was needed was a new profession -- dedicated to personal financial advice and services. The mission of this organization should be nothing less than true financial planning service.
 

Getting it Organized

In June 1970 the first issue of 'The Financial Planner' announced a five-course curriculum for what was first called the 'International College for Financial Counseling." That fall it was changed to the College for Financial Planning and the IAFC altered its name to the International Association of Financial Planners. 

1971 and 1972 were exciting years for the two organizations, but finances remained a constant plague. Dunton was now devoting all his time to the two organizations. 

The commencement exercise for the first 35 graduates of the College in 1973 marked a turning point. In 1974, despite a mounting recession, membership gradually increased and more than 500 members of the IAFP congregated in San Francisco for the first convention. While the College, the IAFP and the new 'alumni' group (the ICFP) were still to encounter problems, they weathered the storms and flourished. Dunton never received full payment for all the cash outlays and services -- but that's not unusual for pioneers.
 

Where We Are Now

From the genius and hard work of Loren Dunton came the institutions we know today.

The College for Financial Planning has become a fully accredited institution of higher learning, now part of the National Endowment for Financial Education. It has educated over 40,000 Certified Financial Planners and now awards a Masters Degree and a growing variety of diploma programs in different specialties of financial services.

The early graduates of the College founded the Institute of Certified Financial Planners to provide on-going professional relationships and continuing education for those having the CFP designation. The ICFP now has 75 local societies and hosts educational retreats for the benefit of its nearly 12,000 members.

Another outgrowth of the College for Financial Planning has been the Certified Financial Planner Board of Standards. This has become the certifying body for the CFP designation and the educational component may now be completed on about 75 accredited college campuses, in addition to the original College for Financial Planning. The CFP Board imposes continuing education and ethics requirements for those holding the CFP designation. 

Most of the other college and universities which now offer financial planning curricula gained support and direction from the College for Financial Planning. Their goal is to provide comparable programs with local classroom instruction. The CFP Board of Standards monitors the rigor of each school's academic program and the national exam assures the intellectual quality of the learning which has been achieved.

For general members of the financial services industry the IAFC (so named in the 1969 meeting) became the International Association of Financial Planners, subsequently to be modified as the International Association for Financial Planning (IAFP). In year 2000, IAFP and ICFP merged to be the biggest financial planning group around - the Financial Planning Association (FPA).
 

Financial Planning in Malaysia 

The IAFP Malaysia Chapter emerged on May 10, 1999 with 23 initial members from a broad range of financial disciplines. At the same time, Tunku Ya'acob Tunku Abdullah of MAA Assurance had already been in touch with the CFP Board of Standards. In late June 1999, the ProtemCommittee of the IAFP Malaysia Chapter, comprising of Edmond Cheah, Wong Boon Choy, Steve Teoh and Paul Chan invited Tunku Ya'acob to participate in the overtures to develop the financial planning industry in Malaysia.

With his visionary and dynamic leadership, Tunku Ya'acob drew in nine founding members to form the backbone of the eventual Financial Planning Association of Malaysia (FPAM). The founding members represented a good cross-section of the financial services industry - unit trust, insurance, banking, legal, stockbroking, accounting, asset management and financial marketing communications.

Malaysia was invited to present its case as a potential new CFP affiliate at the International CFP Council meeting in Paris in early September 1999. Led by Tunku Ya-acob and supported by Wong Boon Choy, James Beltran and Paul Chan, to present to the members of the International CFP Council and secured the bid to be a new CFP affiliate.

The success in Paris set the stage to establish the new entity and FPAM was registered on December 13, 1999. Thereafter, an active membership drive was initiated to invite financial institutions to be charter members to support the development of the financial planning industry.

On August 14-15, 2000, the Advisor to the Ministry of Finance, Datuk Mustapa Mohamed, officially launched FPAM in conjunction with the opening of the 1st International Financial Planning Annual Conference, IFPAC 2000.The conference was a runaway success, attracting more than 1,000 participants including 30 exhibitors who introduced their various innovative financial products and services.

Effective January 5, 2004, all financial planners in Malaysia are required by the Securities Commission to be licensed, and must have the recognised qualifications -- Certified Financial Planner (CFP) being one of them.

The rest, as they say, is history!