CFP adds psychology to the mix

[mickeyd]

CFP education will now include mind-bending to the curriculum. Sounds logical to me.

To that end, psychology is being added to the educational curriculum – along with the longstanding topics like risk management, tax planning, and investing – required for advisers to get certification as a Certified Financial Planner, or CFP.

https://squaredawayblog.bc.edu/squared-away/psychology-added-to-cfp-certification/

 

[ProspectiveBum]

Seems logical, especially since the biggest financial mistakes people make tend to be emotional (going all to cash as markets drop, etc.). Most of the folks here are probably less in need of “talking off the ledge”, but for the average investor, it’d be a good skill for a CFP to have.

 

[disneysteve]

That's a great move. Psychology is a huge part of dealing with people in any regard and that's certainly true with money management. I've actually had that very conversation with our CPA. He was telling me how very much psychology is involved in his client interactions (but he has no formal training - he's just picked it up along the way).

 

[Time2]

And here I thought the psychology training was so they could manipulate there customers better!

 

[MRG]

And here I thought the psychology training was so they could manipulate there customers better!

No these are CFPs you're thinking of the "1%'ers".

 

[OldShooter]

And here I thought the psychology training was so they could manipulate there customers better!

Well, IMO there are two flavors; the bad kind and the good kind.

Bad kind is sales manipulation (and these are the 1%-ers BTW).

Good kind is what the behavioral finance people have discovered, led by Nobel winners Richard Thaler and Daniel Kahneman. Also what the neurology studies have shown, documented for investors by Jason Zweig. Among the many things to understand are loss aversion, recency bias, mental accounting, the endowment effect, and the neurochemical aspects of gambling and stock trading.

Thaler's "Misbehaving," Kahneman's "Thinking Fast and Slow," and Zweig's "Your Money & Your Brain" are the basic reading, though I'd be surprise if a CFP curriculum went three books deep. IMO a serious investor should definitely have read all three.

 

[Dtail]

And here I thought the psychology training was so they could manipulate there customers better!

My thoughts too. haha

 

[OldShooter]

My thoughts too. haha

Well ... we don't know if they are getting the bad kind of training or the good kind.

 

[gcgang]

I wish the field of Behavioral Econ existed when I was getting my Econ degree. Econ’s “rational man”, always making the best economic decision, may have been the way I thought and tried to act, but didn’t explain real world decision making.

Understanding the shortcomings of human economic decision making is vital to preventing making big money mistakes. Glad to know CFPs are incorporating this in their curriculum.