The following letters were received in response to the article last week by John Robinson, In Defense of “Faux Planners”:

Editor’s note:  We spoke with Dan Moisand regarding this article.  Mr. Moisand declined the opportunity to be interviewed or respond in writing, but he said that Mr. Robinson misrepresented his views in numerous instances.  For example, one of Mr. Robinson’s central points is that the use of the term “financial planner” would be the “exclusive domain of CFP certificants.”  In his article, The Financial Planning Act of 2008, Mr. Moisand extended this definition to include ChFC and PFS certificates, as well as to those who have “attained the necessary education requirements established by the Board.”

Dear Editor:

While Mr. Robinson makes many valid points, I am in total agreement with Dan Moisand's position on the CFP designation.

You need to start somewhere.  Currently, anyone can call themselves a financial planner and the industry is full of non-qualified advisors.  Requiring planners to earn the CFP mark will greatly add to the credibility of the profession.

If the CFP mark is that easy, then people like Mr. Robinson should have no trouble passing the exam and proving their qualifications.  If they cannot pass, they only prove that Dan Moisand is right.

Thanks!!

Scot Hanson, CFP
Educator’s Financial Services, Inc.
Shoreview, MN

Dear Editor:

I am and have been a CFP off and on since 1985. Since that time, I have seen many market turfs carved out and later destroyed. Remember the “Merrill-Lynch Rule?”  For that matter, do you remember Merrill-Lynch? With the kind of market consolidation (or is it “creative destruction”?) going on, to try and impose another turf grab on financial professionals seems out of place right now.

However, the largest single impediment to anointing the CFP as the only true financial planner is the poetical, but ill-defined and judicially unsound, fiduciary standard that encumbers the holders of the CFP mark. There are many financial services entities, educational institutions, law firms, accounting firms, divorce consultants, property-casualty companies, bank and bank-holding companies, life insurance and annuity companies and RIAs, just to name a few, that actually do (and know how to do) real financial planning through their agents and distribution organizations.  They already have their own industry standards, regulatory organizations, associations and well-seasoned case law. Many of these entities have already concluded that the ambiguous legal liability imposed by CFP fiduciary standards adds nothing to the services they provide and is not worth the risk.

The FPA has seriously overplayed its hand and should be quiet for a while.

Kimble M. Johnson, CFP
LPL Financial
Louisville, KY

Dear Editor:

I am both a dual-registered Investment Advisory Representative and a Certified Financial Planner® Practitioner (and very proud of both).   I work with some of the finest ethical and superbly-qualified people on both sides of this issue.   I can agree with some of what both Mr. Moisand and Mr. Robinson say in their discussion of Financial Planner qualifications.  I came up through the ranks of the brokerage and insurance industry and obtained my CFP® certification in 2005.  I was extremely disappointed in the curriculum, as it does not test your real knowledge and what happens (or needs to happen) in the real world (e.g., only a cursory mention of Medical Savings Accounts but a litany of memorization of the types of Homeowners Policies).  The curriculum is designed to enable one to "pass the test."  Many newly licensed CFP® certificants are still "wet-behind the ears" and are too busy espousing "Modern Portfolio Theory" that they "cannot see the forest for the trees." Can any certification really replace 30 or 40 years of "real-world" experience?   I think not!

Until the insurance and brokerage industries revise their fee structure and deemphasize bonuses and high upfront commissions (many up to 15% with no "trails" for ongoing compensation), this will always be a flawed form of compensation that needs improvement.  I am currently working with a fee-only advisor who does not sell annuities and he asked me about some annuity provisions.  He recently inherited a client who had been sold 13 different annuities with long surrender charges, and it was clearly not suitable for the client.  This advisor’s conduct borders on ethical (unsuitability) and legal (malpractice) issues, but the advisor who sold the annuities is still selling them to other unsuitable seniors. 

But the "holier-than-thou" fee-only crowd needs to get off their "high-horse" too.  Both forms of compensation have merit.  There are ethical and unbiased advisers in both camps of Financial Planners.  Let's quit criticizing each other and just help people accomplish their financial goals and objectives.

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