The following letters are in response to the article In Defense of “Faux Planners,” by John Robinson, which appeared on December 16, 2008. Previous responses to this article were published on December 23 and December 30. Mr. Robinson’s response to these letters appears in this issue here.
Dear Editor:
Based on my 33 years in the business, Mr. Robinson is spot-on regarding Dan Moisand’s opinion of the supposed importance of the CFP Designation. There doesn’t seem to be any study to support Mr. Moisand’s opinion. Moisand is certainly not the first person to express this opinion. I consider proponents of this type of legislation to be rather self-serving in that, as Mr. Robinson pointed out, proponents feel threatened by the scores of experienced, ethical, talented, and caring Financial Advisors and Planners. Most clients still refer to their Planner or Advisor as “my broker” regardless of their designation. Could it be that encouraging professionals to pursue the quest for the three little letters - and the expense of taking the course and then sitting for the exams - is another way to garnish revenue for another type of “special interest” group? Like Mr. Robinson, I hope that Moisand’s opinion stirs debate. Can Mr. Moisand cite a study that would support his opinion before the debates begin?
By the way, the material I receive from your organization is excellent. Please keep up the good work.
Thanks,
Stephen Molinelli
Wealth Management Partners LLC
Ewing, NJ
Dear Editor:
Dan Moisand has long been a true leader in the financial planning movement. I appreciate the spirited debate which Mr. Moisand stimulated on these issues, and hope that the diverse comments will continue with the same constructive manner which Mr. Moisand intended.
Due to the “financial crisis,” financial services regulatory reform is front and center at the federal level for 2009. It is highly likely that investment adviser and broker-dealer regulation will undergo significant chances, or some form of consolidation. Additionally, “financial planning” may become regulated itself, as a means of closing a “regulatory gap.” Reports indicate that the new administration desires to have its proposal to Congress by April 3rd. Before then, expect proposals for some version of “reform” to be floated by the CFP Board/FPA/NAPFA, FINRA/SIFMA, the state securities regulators (through NASAA), and other organizations. In addition to addressing systemic risks in our financial system, Congress will likely take action affecting the delivery of financial services to the retail investor.
I would like to share my personal opinions on these possible changes.
The CFP® certification has attained status as the most recognized designation, at least in the eyes of consumers, and has come to signify financial advisory knowledge, experience and expertise. This does not mean that other designations do not also share these characteristics. However, the CFP® certification process was never designed to be an “entry-level exam” for “financial planners,” nor a requirement for licensure as such. Still, the CFP Board has developed substantial resources which could be lent to the process of regulation of financial advisors, including expertise in establishing standards and devising examinations.
Should financial planners become regulated, there are many complex issues which need to be tackled in financial services reform, as they affect the delivery of investment and financial advice to individual investors. For example, how can functional regulation be restored? Rather than being regulated by the type of firm (BD, RIA, bank or trust company) where the financial advisor works, future regulation should seek to apply the same rules and standards of conduct to all those who perform the same activities.
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