Is the CFP Board “Mission” Yours?

Article Dated: 4/2004

Paul M. League, QFP, CFP^®

www.IAQFP.org / info@IAQFP.org

New CFP Board Chair David Diesslin’s April 2004 Financial Advisor Magazine article titled “CFP Board Has A Mission,” contains suggested CFP Board accomplishments and a “Mission”. Unfortunately he left out facts and issues that are critical to determining what their actual “Mission” may be.

In the same Edition, Letters to the Editor section, is a submission titled “A Poor Position to Unite Profession”, by Harold Evensky, that wrongly criticizes constructive observations of what myself, IAQFP.org, and many others see as critical ongoing misdirection’s by the CFP Board, and FPA. Nonetheless, we thank Harold for his opinions as a private party ostensibly no longer representing the CFP Board, while understanding that he is not without conflict of interest.

For example, they claim they are “unifying the profession” when promoting the CFP^® designation as the sole designation of Financial Planning. The other sixty percent of the nation’s equally qualified Financial Planners, identified by the designations QFP, ChFC, PFS, MSFS, and MS, are thereby being excluded and disenfranchised. It appears they want everyone to just forget about these 60,000. The FPA supports the disenfranchisement as evidenced by their home page website statement “FPA believes that…when seeking the advice of a financial planner…the planner should be a CFP^® professional”, and in their statement “the FPA advances the financial planning profession” (http://www.fpanet.org). What about the Nation’s other duly credentialed Financial Planners? How can the FPA honestly claim to be “advancing the profession” while it ignores these other 60,000?

IAQFP, in contrast, offers its QFP, Qualified Financial Planner designation, as a universal identifier that includes all of these 60,000 Financial Planner designees, plus the 43,000 CFP^® “certificants” (/qfp_designation.html). Additionally, we provide an open forum and Vote structure where our Members issues can be heard and acted upon (/register.html). IAQFP is the only organization tangibly unifying the profession, thus proving Mr. Evensky’s comments to the contrary misrepresent the facts.

Diesslin says the CFP Board looks at CFP^® Certificants as their “valued clients”, who are “vital to our (their) purpose” (Para #11). As such, don’t certificants have the right and option to question, challenge, critique, and in the end to also select a different direction? And, isn’t it also our right to openly state the reasons why without being derided by the CFP Board through such pejoratives as “well meaning observers (who) perpetuate misconceptions” (sub heading to the title of Diesslin’s article), or threatened for purportedly disregarding Ethics by persons like Evensky (Para #2 of his Letter)? It is important to revisit some history so that the problems we critique in the CFP Board “Mission”, and the other things they say and do, can be fully appreciated.

FPA members listened intently in 2000 as CFP Board members Bob Goss and Patricia Houlihan attempted a damage control tour of FPA meetings following the “CFP-lite” controversy, where they claimed the CFP Board had taken on a whole new attitude of openness towards CFP^® certificants. Part of the literature to support this claim included a brochure titled: “Why You Should Choose a “CFP PRACTITIONER”. When it came time for questions I asked, “What is a “CFP PRACTIONER”, to which they replied “nothing more than a mere descriptive term”. I countered that the brochure stated it was a pended trademark, to which both of them repeated the “descriptive term” and then quickly moved on to other questioners. CFP^® designees know the controversy that flowed from that misinformation as documented at /cfp_practitioner_historical_controversy.html, a pattern to which I alluded in the March 2004 Letters to the Editor section of Financial Advisor magazine titled “A Better Alternative: IAQFP” (Para #2) at: http://www.fa-mag.com/past_issues.php?id_content=3&idPastIssue=81&show=letters). These and subsequent CFP Board actions showed a complete contradiction of their “openness policy” and cannot be easily whitewashed away as attempted by these parties, though their motivation in trying to do so can be easily understood.

For examples of current misleading statements and policies by the CFP Board, and where lack of full and open disclosure provides fuel for yet additional controversy, one only has to review the header to their monthly CFP BOARD REPORT titled, “News From Financial Planning’s Professional Regulatory Organization”. This same claim is found on designation certificates they have issued dating back to at least 1989. Examination of the headline, and words like “certification” help to illustrate; one, they represent only forty percent of the nation’s Financial Planners, leaving 60,000 who they do not represent or “regulate”; two, they have not been appointed SRO/PRO; three, selling a trade mark Financial Planning designation does not confer “regulator” status upon anyone (as in the broader sense of governmental or legislative body appointment); and four, their rights to supervise usage of their trade mark stops there, and provides them no force of law as “regulator” of Financial Planning itself or the other designees thereof. If they added “of CFP^® Certificant Financial Planners” the charge of misleading could be countered somewhat, but without it a stronger case could be made for intended misinterpretation.

Worrisome examples of how they apply “designation regulations” abound, but are best exemplified through the imposing extremes to which they have taken that argument in the JJ MacNab, QFP, CFP^®, CLU incident. As reported by Ms. MacNab the “Regulator CFP Board” demanded that she fix the printed version of Senator Grassley’s oral testimony in which he introduced her to a Senate Panel as a “certified financial planner” (note, with no trade mark ^® symbol, no caps, and not followed by one of those infamously required noun modifiers like “certificant”). Realistically, how could she address such obtuse concerns, suggesting to a Senate Panel that they make such corrections? Yet, the CFP Board persisted in reprimanding her, and threatened to rescind her use of the CFP(R) designation. Is this, or similar examples, not enough to justify opposing SRO/PRO governmental appointment of the CFP Board?

Diesslin misleadingly suggests these kinds of actions represent higher “standards” (Para’s #7 & 14) that engender the support of designees, need protecting, and while “inconvenient” (Para # 12) should willingly be endorsed by designees. He also says the CFP Board has “elevated the CFP^® marks to the status of true certification…created the CFP^® certification examination in a comprehensive format that…sets (them) apart…(and that these are all examples of) advances designed to benefit the public” (Para #4,5,7,). What many say is that all of this activity is not to help the public, or stakeholders, but is instead purposefully done to support their late admitted attempt to become anointed by the government as SRO/PRO, and to protect their tax entity status [years later they finally verbally admitted (though still not reduced to writing), that they actually pursued the trade marking, and “certification” matters, specifically to qualify for the SRO governmental appointment, a fact denied for years but finally revealed in verbal presentation by past President Rick Adkins at 2002 FPA member-wide meetings as witnessed locally here in LA, CA by FPA President Frank Gleberman, prior President Nigel Taylor, IAQFP Co-Founder Gib Kerr, and about 40 other attendees). It is misleading statements such as these that qualify as Ethics violations.

Additional misleading statements by Diesslin’s include “the CFP^® certification has value because both the public and CFP^® certificants understand the need to distinguish between planners who meet our standards and those who don’t” (Para #7). To the contrary IAQFP.org has found that the public has been equally well served by each of the many Financial Planner designees who we both accept and recognize under our unifying QFP designation. Our Member QFP are also held to arguably a higher standard than that of the CFP Board, with continuing education requirements that cover the full spectrum of the methodology, and a Code of Ethics & Professional Conduct that does not require a special two hour CEU course because it is clear enough to be understood by public and professionals alike (see: /code-of-ethics.html & /register.html).

Call the CFP^® “certification” what it really is; namely, a trade marked designation done so by the CFP Board for two central purposes: one, so that they could qualify for the federal governmental SRO in a concerted deliberate move to take over of the Financial Planning movement and the profession; and two, to ensure that designees would be forced to continue paying designation usage dues, or lose their designation. Had the CFP^® designation been left to stand as an educational designation, dues could not be enforced. You can imagine the effect to their power had they lost these revenues!

The fact that they have created a bureaucracy around “certification” and trade marking really only matters to them, for, as IAQFP.org has seen, creating an easily recognized, universally identifiable designation of Financial Planning does not require trade marking. So, we are not complaining about trade mark requirements. We are merely pointing out that “certificants” are forced to accept burdens that they do not agree “benefit the public” (Para #15), serve them, or the profession. Trade marking is unnecessary, and it represents an outcome over which its stakeholders back in 1985 were not asked to give input, were not provided disclosure, and were not given a vote.

Yet Diesslin, like his predecessors, persists in the misdirection when stating “some people now mistakenly believe that the CFP^® certification is our mission” (Para #8), downplaying the facts in the errant SRO/PRO history and other controversies by use of the word “initiatives” as in, “dredging up of past initiatives” (Para #14). And, he adds, “people are taken aback by our interest in such areas of education and international standards” (Para #8). Few are astonished by what they are doing in the areas of education, or regards their actions at internationalizing the designation, since the educational effort is a requirement to maintain their tax-exempt status.

Remember, it is the CFP Board who argued that the process of earning a CFP^® designation had to be converted from an “educational achievement” to a “certification” event. Diesslin states “this sets us apart from organizations that allow their candidates to test on a piecemeal basis” (Para #5) as if there is something lesser in modular course testing as used by Accredited Colleges and Universities the world over. Read between the lines of his statement closely: remember, they have recently announced that all post 2006 applicants for the CFP^® designation will have to have a bachelor’s degree before they can sit for the CFP^® “certification exam” to earn the designation. Is that really a “higher standard”? Many see it as just another way for them to further expand and secure power. The actual effect of this move will be to further bar thousands of capable individuals from employing the Financial Planning process as CFP^® practitioners, and will reduce the numbers of available CFP^® practitioners to meet the needs and demands of a deserving public.

Diesslin’s claim that the one thousand fold growth in CFP^® certificants “is an effective measure of how the standards are viewed by the public” (Para #7) is again misleading at best. Professionals are not stupid, and so many chose the CFP^® designation over other available Financial Planning designations because it was clear the momentum was there. The real credit for the growth in the popularity of the CFP^® designation is due those who bought into and acquired the designation, and is not the result of any so-called CFP Board “standards”, or how they are marketed to impress laypersons or governmental bodies.

Many CFP^® designees conclude that the flow of dollars leads more to the coffers of the CFP Board & FPA, than to designees, and further that the CFP^® designation hasn’t contributed to meaningful retention or influx of new clients for them. When contrasted against the multi-millions these parties have received it pales in comparison to the minute amount they have expended on effectively promoting the designation itself. To many the CFP Board appears to act more like a for profit business than a non-profit, though somehow they obtained and maintain a 501(c)(3) non-profit, tax-deductible status.

Resources for these entities looks something like this: for the CFP Board, at $150 a year in designation usage and recertification renewal fees, times an estimated 43,000 US certificants (Para #7), gross revenues are $6.45 million, plus at $595.00 per exam times an annual average of 6,750 exam takers gross revenues of $4.01 million more (not accounting for millions more in added gross revenues from their CFP^® Board-Registered educational programs); and two, for the FPA, annual dues of $275 times an estimated 20,000 members, equaling gross annual revenues of $5.5 million (not including advertising revenues or grants from their directly affiliated 501(c)(3) Foundation for Financial Planning org.).

Where is all the money being spent, and are those expenditures effective in terms of advancing the profession and knowledge of what Financial Planning is all about? Do policies of these parties benefit the public? Planners can conclude that the CFP Board and FPA appear less committed to promoting the Financial Planning movement than they claim. I suggest that they redirect the bulk of these resources into promoting knowledge of what Financial Planning is, rather then into trade mark enforcement, or into meeting requirements for them to qualify as the SRO/PRO. Financial Planning is all about educating Planners to employ the most unique tool of the methodology; namely, its comprehensive, integrative thinking and perspective. The purpose of all of which is to aid laymen in making informed decisions of how to best order their financial affairs. It is time they put resources into clarifying that purpose, rather than into directives that mislead and a “Mission” that is not well defined.

Diesslin & Evensky say none of them served on the CFP Board for “personal gain or self aggrandizement” (Para #14), but only as “unpaid dedicated professionals” (Para #1 of Evensky Letter). Truth be told, they profited, and still do, some by healthy expense allowances, but each of them by direct effect and benefit to their personal practices. Moreover, many of them have been granted positions of authority affording them, as in cases like Mr. Evensky and wife Deena Katz, the honored position of “Contributing Editors” for Financial Advisor Magazine.

Problems, such as those noted here persist because the CFP Board remains closed, contrary to the posturing by Diesslin who calls for critics to “contact” the Board in “open discussion” (Para #15). The types of problems discussed here are systemic to the CFP Board, and serve as examples of how the CFP Board has no intention of openness or of listening to its stakeholders.

One final example of the problems brewing within the CFP Board is understood by examination of the real reason Lou Garday, CPA may have so abruptly left the CFO position on the CFP Board. I believe it was due to the Board’s unwillingness to support him in bringing people like Nigel Taylor, and others, onto the Board of Governors, all of who had a history of challenging, creative ideas. Garday was doing an excellent job of managing the Board’s financial affairs, but was seeking a way to invigorate a stagnant CFP Board. Unfortunately for all, he failed, an experienced shared by many, which resulted in his literally being driven out.

Well, herein is the open discussion and contact Diesslin heralds. Will any of them respond in a constructive manner, or will they instead continue to name call (as in the quoted writings noted here) in an attempt to marginalize an increasing number of us who continue disclosing what they try to keep hidden (e.g. the true reasons for trade marking, certification, and their designs on the SRO/PRO)? These parties need to “respect dissension”, as David claims they do (Para #13), while understanding that well meaning critics do so intentionally and with clarity of purpose, and as such these parties would be better served to direct their slander at their own creations. Any “Mission” that distracts from the truth of what has been disclosed herein is one that increasing numbers of Planners tell us they cannot and will not support. To the CFP Board, FPA, David and Harold IAQFP Members say, join with us to truly unify and advance the Financial Planning profession in ways that are helpful, open, fully transparent and that create a “Mission” we can all support.