CFP Board or FPA as SRO? – A Better Alternative

August 2002

By Concerned Planners Group (the predecessor organization to IAQFP.org)

Both your “editor’s Notes” and your review of the “FPA white paper” in your July 2002 issue promote the idea of the CFP Board becoming the SRO for financial planners. Considering the Board’s history and their current activities, is this wise?

The Board is a group of intelligent and well-meaning individuals but their track record calls for careful examination. Remember when the Board quietly provided complimentary designations to over three hundred IAFP members and tried to pass it off with an explanation, which was proven wrong? Remember their attempt to railroad the initial practice standards into immediate application until they were stopped by a local ICFP president’s efforts who proved the standards to be dangerously drafted and flawed? Then, of course, there was the scandal of the “CFP lite” debacle. As they reluctantly dropped the known “lite” trademarks they let stand the “CFP Practitioner” trademark application until it too was discovered and exposed by an alert Certificant. Interestingly, in spite of their complimentary gifted designations to the IAFP members, they refuse to do the same for the more meritorious case of ChFCs whom they acknowledge have completed “equivalent” education, exams and experience when compared to CFP(tm) designees.

Add to these embarrassing facts their history of closed-door politics. The fact that they have been proven to have made and continue to make false statements to garner support for harmful and dangerous decisions and programs. Their refusal, to date, to discuss issues of contention including their current misleading and demeaning definition of “practitioner.” Their denial for years that they are pursuing the SRO position, a misrepresentation that a fellow CFP Board member exposed at a 2001 FPA meeting in Los Angeles when he pointed out that Practice Standards were being developed along with the new certification courses and exams as part of a program in order to qualify for the SRO. Further, the recent misguided decision to require all applicants, after 2007, to have a college degree, will not guarantee an improvement in the caliber of certificants but will, once again, help attract the bid for SRO. Unfortunately, the more major impact of this will be to unfairly eliminate many applicants who could otherwise be of great service to the public.

One of the most offensive, and still current, examples of bad judgment is the fact that their Board consists of many unqualified (not educated in comprehensive financial planning) and significantly biased individuals. At various times from 20% to 40% of the CFP Board is comprised of individuals who are not CFP(tm) Certificants. Most of these individuals have never acquired credentials indicating any competency in the field of financial planning while others practice financial planning without at least our credentials and in direct competition to Certificants. They all help make the dangerous type of decisions mentioned above thus handicapping designees with rules and regulations that they themselves do not have to follow. Such individuals should be on an advisory panel, not on the CFP Board.

The CFP Board has never run truly open nominations and/or elections for their Board, nor do they involve their Certificants in any meaningful way in any of their decision making unless, as in the case of Practice Standards and “CFP lite”, etc., they have been forced to or face a major loss of dues from members who have finally had enough and are threatening to drop their designations. At this moment some have already dropped the designation many are considering doing so anyway because of the Board’s unreasonable and uncooperative approach to nearly all matters of concern and interest to Certificants including such things as customer allegations, methods of financial services compensation and other issues being decided by a Board that includes unqualified and/or competitive members.

The fact is that, at this moment, both the CFP Board and the FPA, neither of which allows open voting on anything, are operating in their own vacuum. Democratic procedures are being completely ignored as is the experience, training and wisdom of CFP(tm) Certificants. It appears that the Board and the FPA are either unwilling or afraid to open themselves to the opinions of this most knowledgeable group because of their own often hidden and questionable agendas.

Many CFP(tm) Certificants, and others in the broader qualified financial planning community, are currently appalled, frightened and firmly against the CFP Board, or the FPA becoming the SRO of anything.

Your review of the FPA “white paper” points out various methods for the Government to regulate financial planners. There is another option, which is probably the best alternative because it can provide features that no Government agency seems able to , including an SRO. What is needed is one organization that is open, transparent and that basis all of its actions on the fully informed input and consent of its constituency. One group where all those who have completed equal levels of education, examination and experience and where are all are subject to common ethics requirements etc., regardless of their designations, join forces to strive for perfection in serving the public in the most effective manner. One location that provides the public with a single source to identify qualified financial planners. A professional society that rises to the unofficial position of public respect based on performance. The Concerned Planners Group(sm) is already developing that body of professionals and they will continue to work for the support of professionals and the public alike so that government intervention, or an SRO, isn’t needed.