Immediately following this Memorial Day weekend, it will only be a matter of hours before I attend my 2nd mentorship session in the CFP program and my first session where I will be expected to have prepared material and an exam on said material.

The deal is they will begin each mentor session with an exam on materials assigned for that session and will use the exam to assess the candidate's commitment to the program.  There are approximately 300 pages of material that has been assigned for this upcoming session.  The exam will comprise the first ten minutes and the remaining fifty will be for coverage of the material and answering any questions, though truthfully that only amounts to less than 15 seconds to cover each page so I am already questioning whether there'll be time for anything other than the most superficial teaching of the subject matter.

Each session will be conducted in this manner.  If it is determined that the results of the exam show a lack of commitment on the part of the candidate, that candidate is on probation.  If subsequently a second exam is failed in this way, then it will be expulsion.  Once expelled, the candidate will no longer be allowed to pursue the course work for the CFP.

So there's a lot riding on this week's events.  Everything will depend on how much detail will be on the exam.  For 300 pages, if there are more than just surface-level questions, my tenure in this thing may indeed be very short-lived.  I was told it should take about 3 hours to study the assigned readings.  I am quite a proficient reader and have already spent twice that long just on a first pass.  I will be doing a second pass before I go in.

All of this is by way of introducing this weekend's article, "Telling Clients No," in which Barry Ritholz makes the entirely reasonable case that one should steer clear of financial advisers who say "yes" to everything a client wants since it is all too frequent that clients really do not know what's in their best interests.  I thought this was all quite relevant in view of the path I am on this week.  By Wednesday afternoon, I'll have a better idea of whether my future has any remote possibility of ever including the credential of Certified Financial Planner.


Telling Clients No - The Big Picture

Telling Clients No

May 29, 2016 9:30am by Barry Ritholtz

My Sunday Washington Post Business Section column is out. This morning, we look at whether financial advisors should always say “Yes” to their clients.

The short answer is, no, they should not. Indeed, providing “best interest” advice often means politely explaining to clients exactly why what it is that they want to do is against what they should do. The advisor should explain why doing ____ is not in their best interest.

What is ____ ? Here’s an excerpt from the column that explains it:

“Everybody in finance who is paid by clients will eventually encounter one who will insist on a service that an adviser knows defies common sense and works against his or her long-term interest.

What sorts of things? These:

• Taking on more risk than is prudent.

• Buying the hot new thing.

• Participating in an expensive, underperforming private investment (e.g., hedge funds, venture capital).

• Using excess leverage.

• Following the advice of pundits or talking heads.

• Overtrading.

• Pursuing the latest media fixation.

• Speculating in commodities.

• Allowing emotions to steer investments.

• Buying low-quality, high-yield “junk” fixed income paper.

• Buying nonliquid investments (private equity, gated private investments).

• Market timing.

• Buying IPOs.

• Cherry-picking portfolio allocations.

Our answer to all of the above is no. We politely decline to engage in what all of the academic research suggests is at best a statistically bad bet.”

The full column is a bit inside baseball, but if you are an advisor it is important.

Source:
Say ‘yes’ to the financial adviser who will tell you ‘no’

Barry Ritholtz
Washington Post, May 29 2016
http://wapo.st/1WT6sb7