Should a good financial planner know CAPM?
June 1st, 2010
I have asked every financial planner in town if they know the Beta on the New York Stock Exchange or S&P 500, and none of them have known the answer–which means that they don’t understand the Capital Asset Pricing Model. I thought it would be reasonable to expect financial planners to know CAPM and ECMH. Is it? Are the financial planners in my area just stupid, or are they par for the course? And if they aren’t expected to know CAPM, why should I entrust my money to them?
Most “financial” planners are sales people and didn’t major in finance. Most financial people will not know the technical financial stuff that a fund manager or a financial analyst will.
I do think it is important to know these things though, but a financial planner wouldn’t use capm or any of the other things in their day to day life…they basically sell the products that are already provided to them and have all the research done for them
I am a college senior at a good university majoring in finance and I think im gonna become a financial planner…so i would definitely know the capm and other things…but 80% at least will have no clue
and thats not saying they are bad planners…just that they didn’t major in finance or a business degree