What Does MQFP® Mean?

In honor of my passing the Military Qualified Financial Planner® (MQFP®) exam last week, I thought I’d take this opportunity to explain what the MQFP® certification is and what it means to me.

A Selective History of Fee-Only Financial Advice

Circa 2015, “fee-only” financial planning (where the planners only receive fees paid to them directly from clients, and don’t receive commissions, kickbacks, etc) was still quite new. Previously, most “financial advisors” were really insurance salespeople who happened to also manage clients’ investment assets. This is slowly changing; organizations like XY Planning Network (XYPN) and National Association of Personal Financial Advisors (NAPFA) support fee-only financial planners in building and managing their businesses, and they also help potential clients find fee-only planners that are right for them. However, there are still many multiples more of insurance salespeople who called themselves “advisors” than there are fee-only advisors.

Why does fee-only matter? Fee-only advocates believe that receiving commissions creates an inherent conflict of interest. Consider an advisor who could manage a family’s investments assets for a 1% fee per year, but they could also sell the parents two whole life insurance policies and receive several hundred to a few thousand dollars in commissions each year the policies remain active. Additionally, the insurance company makes money for each policy sold, so the company encourages their agents to sell policies and trains them to do so. With all that pressure and training to sell policies, it only makes sense that agents encourage their clients to buy said policies. After all, when all you have is a hammer, everything looks like a nail.

In contrast, fee-only advisors are paid only through fees paid to them by their clients. This sounds more expensive, but in reality, it’s less expensive over the long-term for the clients, and clients typically receive advice that is less biased and more relevant to their financial situation. Fee-only advisors only recommend that clients purchase insurance policies if they truly believe the client needs it, because the advisor isn’t incentivized in any way to sell policies.

The MQFP® Designation is Born

In 2021, a group of fee-only financial advisors, financial coaches, and financial bloggers got together to figure out how financial professionals who work with military clients can 1) distinguish themselves as being highly knowledgeable about military-specific financial issues, and 2) be more easily found by military clients who want to hire financial professionals who intimately understand not just the pay and benefits, but also the unique lifestyle the military requires. They created a non-profit organization for this purpose, and decided to create an industry designation, which came to be known as Military Qualified Financial Planner® (MQFP®). They spent a couple years creating the learning objectives, deciding on pre-requisites, and writing an exam for this new designation. 

The Advisory Committee decided they didn’t want to test financial professionals’ overall financial knowledge- they only wanted to focus on the military-related aspects of personal finances. This is why they require an applicant to already hold one of the following designations:

• Accredited Financial Counselor (AFC®)

• Certified Financial Analyst® (CFA®)

• Certified Financial Planner® (CFP®)

• Chartered Financial Consultant® (ChFC®)

• Certified Public Accountant (CPA)

• A licensed attorney

This is a fairly common practice for an “add-on” or “level up” certifications - one of the above certifications shows a competence in personal finance in general, while the MQFP® is “added on” to show a specialization in military finance.

Importantly, the MQFP® designation requires that all certificants are fee-only (hence my lengthy brief history of what fee-only is). The Advisory Committee feels strongly that fee-only compensation structures are in the client’s best interest, and they want to promote fee-only business models. They require MQFP® professionals to be fee-only because they’re truly invested in helping military clients get the best advice possible with the least amount of conflict of interest.

Additionally, the MQFP® certification requires that every certificant have military experience as a current service member, a veteran, or a military spouse. This ensures that MQFP® professionals don’t just have book knowledge on what an LES is or what pay entitlements you get during a PCS- they have lived the military life personally and understand the unique stresses (and opportunities) that the military provides. 

What the MQFP® Designation Means to Me

These marks are important to me for a few reasons. One, the financial welfare of military servicemembers is a topic that is near and dear to my heart. I’ve heard horror stories of military families hiring financial professionals who “knew” military finance, but then gave poor advice or made costly mistakes in the families’ plans. This designation proves that I have a strong knowledge of military and veteran pay and benefits, and the fee-only requirement shows my commitment to avoiding conflicts of interest.

Two, both of my bosses at the financial planning firm I previously worked at were part of the initial group to create the designation. They both spent 20+ years in the Navy and have spent their post-military careers helping military families improve their financial situation through tax planning, tax preparation, financial planning, and several non-profit initiatives with those same goals. They supported me in my career, and earning the designation they’ve created is one small way I can support them in return.

As another mentor of mine frequently says, “A rising tide lifts all ships.” Earning the MQFP® designation helps me distinguish my knowledge of military pay and benefits, but it also helps the overall MQFP® initiative. The more financial professionals who earn this designation, the more visible it will become, and the more recognizable it will be to potential clients who are looking for our exact expertise. 

Three, I view MQFP® professionals as a community-within-a-community, and I’ve met many of them at various conferences. They are all smart and dedicated people with good hearts who want to help military families improve their financial stability. The number of MQFP® professionals is small but growing, and I’m honored to be among the first few waves of MQFP® certificants.

If you know someone in the military who could benefit from working with an MQFP® professional, please share this post with them!

Had you heard of the MQFP® designation before reading this post? What are your opinions about fee-only versus commission-based fee structures? What's your process for finding a professional (of any type!) to support you and your family?