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Certified Financial Planner (CFP®) or College Football Playoff (CFP) Thumbnail

Certified Financial Planner (CFP®) or College Football Playoff (CFP)

One day after work I was watching the great Michael Wilbon and Tony Kornheiser on PTI (“Pardon the Interruption”) on ESPN. My wife, Catilin, walked into the room and looked at the upcoming sports topics on right of the screen. She exclaimed, “CFP®!”, referring to CERTIFIED FINANCIAL PLANNER™ and wondered what that was doing on the screen (for those who do not know, the CFP® designation is the top wealth management designation). Laughing I explained CFP in this context meant the College Football Playoffs (CFP). Then I thought, “Are there any parallels between the two CFPs?”

1. Optimists

Every college football coach, player and fan thinks about what needs to go right for their school to make the College Football Playoffs. This year only four teams out of the 133 FBS division 1 schools will make the College Football Playoffs.  Despite this challenge, we continue to see teams coming from a separate subdivision of division 1 college football, ‘the FCS’, where 24 teams get a shot at the playoffs, to join the FBS. While there are financial incentives to make the leap to the more prestigious FBS, the teams also believe that they can be successful in the FBS at the highest level. This includes our local Virginia school, James Madison University, who is currently undefeated this season and ranks 18th nationally ahead of schools like Notre Dame and Tennessee in just their 2nd FBS season. 

Long-term optimism is present in investment management. Wealth managers remind clients how the market has continued to exceed previous all-time highs and to remain confident in the market’s resiliency. We further remind that market resiliency and growth occur because business profits continually grow over time as businesses benefit from global population growth, geographical expansion, as well as productivity growth through advancing employee skills and knowledge, technological innovation, and business mergers. As optimists, we expect this to continue and translate into investment growth in the long-term.

2. Execution

If a college football team is going to claim one of the four playoff spots, then they must execute their gameplan at a high-level week after week. We see the eventual playoff teams each year commonly do things well like have a better turnover margin, protect the quarterback, stop the run, fewest penalties, etc. This year, Michigan, who is the second ranked team in the country, is 6th in turnover margin, 16th in sacks allowed, 12th in rushing defense and 1st in fewest penalties out of the 133 teams! 

Likewise, wealth managers work with their clients to execute a gameplan. Successful gameplans will have higher savings rates, sufficient cash reserves, low fixed-rate debt, and the ability to allow investments to compound over time. Liquidity, a suitable asset allocation, and the realization that volatility is the price we pay for market growth over time all work in tandem to allow for compounding to take place and work wonders. After all, Charlie Munger once said, “the first rule of compounding is to never interrupt it unnecessarily”. Your wealth planning and investment management must be aligned to execute this.

3. Performance in the clutch

Bringing my wife back into this (sorry, Caitlin), have you ever heard from your spouse less interested in sports that only the final two minutes matter? While I disagree with this statement, there is no doubt that crunch time performance is critical. Ohio State, the third ranked team in the country, played Notre Dame early this season and was losing 14-10 in the final minute. Ohio State went on to score the winning touchdown on the very last play of the game with a run from the 1 yard line where the ball carrier just got over the goal line. If Ohio State fell short in that moment, then their playoff odds plummet. 

The crunch time in investing is during market drawdowns. We have had two in the last four years! During COVID, we saw the S&P 500 fall 30% from roughly 3,300 to 2,300 peak to trough in the span of 5 weeks. The market then recovered significantly over the next 20 months until 2022’s bear market where the S&P 500 dropped 25% from roughly 4,800 to 3,600 peak to trough. Today we stand at 4,500 on the S&P 500.

If investors panicked during COVID and sold, it is very unlikely they got back into the market for the recovery given the rapid ‘V-shaped’ recovery we experienced. Losing out on this market progress is detrimental and can unravel years of sound execution. As wealth managers, we design an asset allocation with volatility expectations that our client’s can tolerate. Bond portfolios have delivered positive performance 85% of the time when equity performance is negative, providing the stability, or diversification, needed for so many investors to perform in the clutch.


While there are more parallels, I think a major difference needs to be highlighted. In college football, there is only one champion at the end of the season and there is only one goal to be a champion at the start of the season. However, in financial planning, everyone can win.

Further, there is not a singular goal at the start of a financial plan. Some clients want to live their retirement life to the fullest while ensuring they don’t run out of financial assets while others want to give away all they possibly can afford during their lifetime. Some clients want to do both. There are plenty of achievable goals to choose from! It’s a wealth managers job to inspire continual optimism, execution and performance in the clutch to increase the odds we all become financial champions. 

Cody James

Wealth Analyst