Is a True Financial Planning Coalition on the Horizon?

January 28, 2005

By Paul M. League, QFP, CFP® – IAQFP.org Chairperson & President (January 28, 2005)

A January 2005 InvestmentNews article reports that the FPA (the organization that exclusively supports the CFP® designation), and the AICPA (the CPA society that supports the PFS designation) appear to now be “vying for PFS designees”. FPA board member Kacy Gott is therein quoted as saying “we want to be the community for all who promote Financial Planning”. Did you hear that? The FPA, after years of being CFP® – centric, now wants to be “the community for all”, now isn’t that a rather peculiar departure?

What’s behind this apparent change? Clearly, the FPA is pressed for holding onto its members and must have determined that in order to maintain and expand their numbers, and influence, that they must appeal to a far broader base. What this most likely indicates is that the CFP Board, the FPA, and the AICPA may, and I emphasize may, have finally struck a deal of sorts that possibly foretells reciprocity between their competing designations that will finally result in them being treated as equivalent.

IAQFP is pleased to learn that these parties finally appear to accept what IAQFP already has; namely, the equality of these two designations, and still 3 other designations (ChFC; MSFS; MS), as representative of one who is educated and trained under substantially the same qualifying criteria, and one who therefore is also qualified in the application of its methodology, discipline and integrative perspective.

The CFP Board & FPA (Financial Planning Association), in particular, have been opposing this for years, while IAQFP, after making several approaches to both, but only being ignored and/or refused, decided to recognize the equality of all 5 (CFP®, PFS, ChFC, MSFS and MS –the latter two with a concentrated study in Financial Planning). IAQFP has long welcomed each of these designation earners to be covered under its QFP, or Qualified Financial Planner designation, the single unifying designation created to represent all Financial Planning and its professionals. IAQFP further codified this by allowing all 5 of these designees FREE registration into its public Registry resource so that the public can both easily verify and locate said professionals (the IAQFP – QFP Verification Registry of Qualified Financial Planners at: www.iaqfp.org/qfp-registry).

While the above has been developing, IAQFP has led in exposing repeated hidden and controversial initiatives by the CFP Board, assisted by the FPA, the longest being their desire to become the PRO or SRO of the Financial Planning profession. In a November 2004 IAQFP Member-wide deliberation, and vote call, Members voted 82% against the need of a Self-Regulatory Organization (SRO), or Professional Regulatory Organization (PRO), to regulate the profession or the activities of planners. When it came to the question of what would happen if the government, or other body, were to appoint one anyway, and whether or not that appointee should be the CFP Board, FPA or any party related to them, IAQFP Members voted a resounding 91% against.

Several months later we learn through another InvestmentNews article (1/2005) that the FPA has set up a committee to “consider planner oversight”, this on the heels of a Probe Newsletter article by Ed Morrow, Chairman of IARFC, that makes a strong case against the need of an SRO/PRO for either planners or public benefit. That article also strongly cautions against support for either the CFP Board or the FPA as SRO/PRO, citing as an example their rather problematic handling of referrals that are only made to CFP® certificants who are also required to be FPA dues paying members, while restricting access to all other planners bearing other equally qualifying designations. How is it beneficial to consumers when the CFP Board & FPA collude to disenfranchise the majority of equally qualified Financial Planners who hold other valid Financial Planning credentials, simply because they don’t also hold a CFP®?

Further, who selected the CFP® credential to be the “chosen one”? CFP® stakeholder designees themselves were not even given a voice, opinion or vote on this. Clearly, the CFP Board & FPA have made that determination, but again they have done so without the vote or consent of either their own stakeholders or of the far broader community of 100,000 Financial Planners.The CFP Board and FPA have presented no evidence that consumer confusion is eliminated or lessened as a result of holding the CFP® designation over any other. The question still has not been answered: “How do we distinguish the Financial Planning process itself from the various vehicles and products used to fund such Plans?” Obviously, just holding the CFP® designation, or any other, is not enough. The answer is that this is already being done by Financial Planners themselves, helped in some cases by the entities that issue their credentials and/or the advocacy organizations they support, such as IAQFP.org.

Now, by also designating itself as the best candidate for PRO, or SRO, and the CFP® designation as the one designation to represent all of Financial Planning, the CFP Board and/or FPA are trying to cement a monopoly hold over the entire Financial Planning field…a hold that IAQFP Members, and others as herein noted that represent a clear majority, have strongly voted and spoken against.

Rather than more infighting and increased turf wars, the Financial Planning community needs to unite, and in doing so, to create solutions that truly have the potential of actually being beneficial to planners and consumers alike. If we, as a profession, are truly concerned with distinguishing what we do as planners from the products we use, and of providing consumer protection and reducing consumer confusion, then now is the time for all Financial Planning professionals, and the entities from whom they obtain their credentials, and the organizations they support, to unite.

Any solution must be inclusive of all those currently qualified, representing a true coalition.

IAQFP.org was formed to be that unifying coalition organization. IAQFP.org has sought to uncover perceived consumer concerns and to address the common goal of eliminating public confusion over who is and who is not a qualified Financial Planner through the introduction of the QFP designation. IAQFP researched in depth the designations of those who claimed to be Financial Planners and determined that five designations, from four entities, met the minimum criteria. IAQFP took all of these steps because these 4 entities, and the organizations that support them, were, and largely remain, dedicated to acting alone…with the apparent current exception that the CFP Board and AICPA may now have brokered some kind of a unification deal. Whether this is for real, or beneficial to planners and the public, remains to be seen; however, if any such unification also causes further pursuit of the SRO or PRO position, then all Financial Planners, along with the public, remain at serious risk for at least the single reason that no one appears to want either.

Renewing the IAQFP effort to bring all of these entities together is an idea whose time has certainly come. However, for this to have the greatest chance of success, members of these entities must also register at www.IAQFP.org/register.html and immediately begin using the unifying QFP designation. Such actions take nothing away from the other 5 designations of Financial Planning, their issuing entities, or the organizations that support them. The four entities who offer designations maintain them, with their designees simply adding their qualifying credentials, which just serves to bring extra credit to each and every qualifying designation and entity, with all of them together being unified as QFP – Qualified Financial Planners.

IAQFP already stipulates that its QFP adhere to certain pro-consumer standards and disclosures, and has a disciplinary & complaint process in place to enforce overall credibility and compliance. Through such a coalition uniform protections and standards become fully shared, which effectively not only extends public protections and safeguards, but also better serves the planner community.

The opportunity to join this coalition is open and free.

The potential exists, but can only be fully realized when the eligible 100,000 equally qualified Financial Planners begin using the unifying QFP designation that IAQFP.org has already authorized them to use, and then to register their use in the QFP Verification Registry for all the public to see.Finally, these 100,000 must also formally request that their respective organizations be an active and positive part of the coalition.

A unified coalition & profession obviates the need of an SRO or PRO for planners and public alike.