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My Financial Planning Career Has Only One “License”: CFP Certification

Korean Financial Planning Professional Sunho KimBy Sunho Kim, CFP

I didn’t know anything about life insurance until I began working for a life insurance company in1986. After I did the company training course, which involved me going to the Korea Insurance Institute, I became aware of the importance of insurance, and especially life insurance.

Life insurance was the area I really wanted to pursue. This was for two reasons. One, it was an industry that was advancing capitalism in a proper way. I still remember very vividly an expression of the development of capitalism in terms of the financial industry: “Capitalism lays down its roots into the soil through banks, grows into a full bloom through securities, and bears fruit through insurance.”

The Harder I Worked, The More the Consumer Benefitted

The second reason was because of the regime called “companies” that was the engine for the development of capitalism: only the insurance companies treated the interests of shareholders and consumers equally. Most of the products sold by insurance companies, at that time, were dividend-related products, which are almost non-existent today. Relative to non-dividend products, dividend products assessed risks more conservatively, but when profits were made, they returned them to consumers. The more profit the companies made, the more dividends the consumers were able to receive. In contrast, other kinds of businesses only delivered consumers with good-quality products and services, not dividends.

Insurance Companies Changed in the 1990s

I liked the fact that the more I contributed to the profit-making of my insurance company, the more benefits and gains the consumers, who I did not know in-person, ended up receiving in a direct way. Unfortunately, the character of these “mutualized” insurance companies, that treated the firms’ and the consumers’ interests equally, started to dissipate with a new liberalism in the 1980s. The “de-mutualization” in life insurance companies began in the 1990s and transformed big mutualized companies, such as Prudential, MetLife, and John Hancock of the United States, into shareholders’ corporations. In Korea, it resulted in dividend products disappearing from the market with non-dividend products filling up the vacuum.

Now What?

When the character of insurance companies transformed, my passion subsided dramatically. By 2000, I began to ponder upon an alternative career choice. In 2001, I discovered financial planning. Because Korea underwent a financial crisis in 1997 that led to an IMF-led rescue, it had been changing rapidly. The notion of spending your lifetime with one company disappeared, as restructuring was prevalent everywhere. The volatility of financial markets became very high with financial products growing more complex. The time span for creating incomes was shortened, while the lifespan of people was increasing. An unprepared future for individuals and their households appeared to be approaching in a dismal way. Against this backdrop, financial planning came to me as the kind of work that would help consumers harmonize money and life by assisting them in making plans for the uncertain present and future.

The Beginning of My Financial Planning Career

At the time when I was still just considering financial planning as my next career, the Korea Financial Planner Association (KFPA) had been set up a year prior, to impart financial planning to the public. My vague aspiration and expectation for financial planning started to take a concrete shape when I started writing CFP exam textbooks for KFPA. Being humbly recognized for my small contribution to its “grand fathering” of the first textbooks, I received the CFP certification in 2002. Ever since I acquired the CFP certification, I have been conducting work closely related to a financial planner’s job, including textbook development, education program development, writing, and translation. Since 2010, I have been practicing financial planning as my second calling with my interest expanded to the financial planning business, financial education, and consumer protection.

Only One “License”

A financial planner in the field usually owns three licenses. They will achieve an AFPK or CFP certification to practice financial planning better; a fund or securities investment consultant license to work as an investment advisor or agent; and an insurance planner license to sell life, property, and other insurance products. Of these licenses, a financial planner normally has at least two, while some have all.

As a financial planner, I only have one. I don’t even have a driving license which is why I joke that the CFP mark is my only license. While I have been conducting financial planning work for the past ten years, I have never done a financial planning consultation. Even though, I have never performed a consultation service, my touchstone has always been the very first rule in the Code of Ethics for the CFP professionals: that clients’ interests are the very first priority.

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