Staff Reporter
In a brand new money column, Peter Dougherty explains that, despite being one of just three officially regulated foreign financial planners, investing and saving in Spain is unique and elusive
ON July 9, 2021, I sat through a gruelling six-hour exam in a stuffy hotel conference room in central Madrid.
My 29 fellow examinees were all called Francisco or Javier and came from all corners of the peninsula. My name is Peter.
That’s the day I qualified to become one of just 1,015 European Financial Planners (EFPs) now officially registered in Spain.
It may come as a surprise, but in that entire list, you’ll find only three of us with foreign names: Milenka Ivanova, Zhanna Fenenko, and me, Peter Dougherty.
The three of us make up a mere 0.29% of the EFPs, the highest accreditation of the European Financial Planning Association of Spain (EFPA España).
My finance credentials don’t end there. I also hold two master’s degrees – one in taxation in Spain and an MBA in finance in America, and worked for two decades at a trio of well-known investment banks on Wall Street.
I have also written two books explaining cross border financial issues between Spain and the US, one in English, the other in Spanish.
Yet, despite my extensive training in the field of finance, Spain’s financial sector remains unique and elusive to me.
Unique
How do we explain the stark contrast between the number of financial planners in Spain, on the one hand, and in the UK and the US on the other?
1,015 is a small number. Financial planners registered in the UK – counting Chartered Financial Planners, DipPFS, and Certified Financial Planners – total more than 43,000. While in the US, the number of Certified Financial Planners (CFP®) alone now exceeds 100,000.
One reason may be the head-start that both the US and the UK have had versus Spain in the financial planning field.
EFPA España certified its first EFPs in 2010, 38 years after America’s first CFP® recipients (1972) and 15 years after the first CFP® holders in the UK (1995).
Another possible explanation is that compared with its English-speaking expats, Spaniards typically do not discuss money.
Often not even with close friends or family.
It’s a cultural difference, one of the many that sometimes make living in Spain as a British or American expat both refreshing and frustrating at the same time.
Can you imagine the difficulty of being a Spanish financial planner working in a country where the culture of your compatriots is to not talk about money?
How do you even start conversations with prospective clients?
Still others believe the answer lies in how Spain’s financial infrastructure has evolved.
To prepare for Spain’s entry into the European Union in the 1980’s, several Spanish banks consolidated and merged in an attempt to gain equal footing with the larger size and sophistication of their European rivals.
Later, they were able to grow in a way many rival banks couldn’t: by expanding in Latin America, where Spanish banks share a common language and culture.
The financial crisis of 2008 produced another strong wave of Spanish bank consolidations. Currently, the three largest banks (Santander, BBVA and CaixaBank) are what remains of what had been 29 separate banks or ‘savings’ banks at the start of 2008.
All of which puts decision-making in the hands of a few very big banks. And to date not one of these large banks has yet embraced financial planning in a meaningful way.
Elusive
As an expat, if we ask any three ‘experts’ the same question in Spain, we’re likely to hear four different answers.
That may be because far more ‘grey area’ – open to legal interpretation – exists in Spanish rules and laws than in the UK or the US.
Or it may be because Spanish law doesn’t explicitly address cross border financial or other circumstances that may arise.
The theory to explain this that I like best, though, is that Spain’s long-running tourism slogan was right all along.
‘Spain is Different’ it boldly claimed. They were certainly right.
For more information, please visit the website www.financial-planning-in-spain.com
