By the Letter: The Benefits Behind Financial Education

By the Letter: The Benefits Behind Financial Education

I’ve worked in a few industries. When I first graduated high school, I moved to Sudbury where I would thrust myself into emergency medicine. I graduated from Cambrian College and started a career as an Advanced Care Paramedic with the City of Greater Sudbury. Through my time there, we had to maintain “CE (continuing education) Credits”. From Sudbury, I moved to Lethbridge, AB, where I worked as a paramedic in the oil fields north of Grand Prairie. On top of the CE credits I was obligated to maintain through the Alberta Health Services, I also had to maintain certification in oil and gas specific credentials. These took up time and money, but whenever I went to one of these courses, whether it was H2S (hydrogen sulfide) training, or wilderness training, it always seemed to be, what we referred to in high school, as “Bird Courses”.

A “Bird Course” is essentially a course that has no meaning or is “for the birds” as it were. They often took an evening or a weekend and consisted of someone standing at the front of a class and “teaching” us all about how we shouldn’t do things that most people wouldn’t do anyway. The snooze-fest of a day was capped by a short quiz to prove you showed up.

So why do I bring up CE credits?

Let’s just say that ‘the birds’ are flying in a different direction.

Though there will always be educational requirements to maintain licensing and there will always be courses that seem like they are around simply to slow down the process of starting or continuing a career, I wanted to go into the specifics of why CE credits, or continuing education as a whole, can be important.

Continuing Education in the Financial Industry

I recently passed my CFP (Certified Financial Planner) exams. It consisted of four long courses and three two-hour exams. When I tell clients that I passed my CFP, they start by congratulating me, but then ask, “What does that let you do?”. That’s a valid question.

Historically, there have been a lot of designations in the financial industry. For example, Rick Tomalty, my father and one of the partners at my firm, has a multitude of letters after his name (CFP, CLU, CH.F.C., CHS, MFA, CEA, CKA). To be honest, if you asked me what those “let him do”, I would have no real answer for you. What I do know, is that he has been able to use those designations to help people navigate their financial dilemmas. For example, one of those sets of letters represents a course that allows him to be the professional executor or trustee of a will. When clients had specific questions about how to deal with their parent’s passing, he was able to step in and give more than the generic, broad-based answer most financial advisors would give. He may not use that designation every day, but it made a huge difference in that moment.

When I was a paramedic, we were trained to be a “jack of all trades, but a master of none”. We were supposed to know enough about every body system to keep people alive until they got to the hospital. That’s very similar to how most financial advisors practice. They know investments and/or insurance, but only scratch the surface of what’s “need to know” about other aspects, whether it’s tax planning, estate planning, power of attorneys, trusts, incorporation and corporate structure, ect.

This is where designations like the CFP come into play.

The CFP designation does not give me any special superpowers, but it allows me to speak as an expert of matters outside of general investments or insurance. The course specifically connects investments and insurance to the other aspects of peoples lives. FP Canada, the regulatory body for Financial Planners, wants to breed advisors who will look at their clients through a holistic lens. Where 15 years ago, most of those letters behind Rick’s name had a very impactful meaning, the big one that has moved up is the CFP. Soon, within the next few years, having your CFP will be a “table-stakes” designation to be a financial advisor. In the same way accountants have different accreditations to distinguish themselves, the CFP designation (and QAFP, Qualified Associate Financial Planner) differentiate advisors from your traditional ‘investment/insurance salesmen’. When you go to see your accountant, you will have more confidence seeing the “CPA” designation compared to your average H&R Block representative.

Just like other industries, the financial industry has required CE credits for each year, but these are simply because we live in an ever-changing world. The last two years has provided more evidence of that than we need. My clients trust me to stay on top of the investment market and to provide them with confidence that they don’t have to maintain up-to-date knowledge themselves. The CFP brings about another layer of trust that my recommendations are more encompassing than what is happening in that moment.

An ending note:

My opinion of continuing education prior to entering the financial services was quite negative. In the medical field, there were rarely ever new findings that constituted radically changing our perception of how the body functioned. CE credits really turned into a yearly refresher of knowledge and tactics we already used daily.

This industry has changed my perspective because the credits serve a new purpose. It seems as though every time I look at the news, there is a new outlook or case study that gives us better insight into how to work with our clients.

So however you get your financial advice, know that the letters make a difference.

Some people have the benefit of years of experience, while others (like myself) have invested time and energy into learning what experience has yet to teach them. Unfortunately, I have seen many cases of people taking financial advice from friends, who got it from their friends or from their advisor. Suddenly, it becomes second or third hand advice, and as seen in the game “telephone”, that often leads to a twisted echo of the original message.

I would hesitate to get advice on how to build a home from a plumber. He would be an expert on that specific part of the building, but he wouldn’t know the intricate detail it takes to add electricity or windows. That’s where a contractor will come in and be able to look at the home for what it is. Building a home takes knowledge and understanding of a multitude of components. The contractor is able to use his body of knowledge to advise and piece all the parts together so you aren’t left with a poor foundation or inadequate power.

If you start to look at your financial “home” the same way, suddenly it becomes obvious why a contractor, or someone who knows how to connect all the intricate parts of your life, becomes valuable.