The Hypocritical Assertions of CFP Lobbyists CFP Lobbying Organization Calls Out RIAs

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

The article below is provided in response to views expressed by the executive leadership of the three member organizations of the Financial Planning Coalition.  For the record, the author of this piece fully respects the qualifications of individual CFP certificants to practice financial planning.

 “I’m good enough, I’m smart enough, and doggone it people like me.” In a reprisal of the Saturday Night Live classic skit featuring comedian and former Senator, Al Franken (D-MN), I stand in front of the mirror repeating Stuart Smalley’s daily affirmation.  The source of my angst is a letter I received last week from the Financial Planning Association trumpeting the findings of a “research study” commissioned by the Financial Planning Coalition to help advance its political agenda. 

The subtext of the letter effectively informed me that I am not ethical enough or smart enough to be a financial planner.

For reference, the Financial Planning Coalition is a Washington D.C.-based lobbying organization comprised of the trinity of the financial planning universe – The CFP Board of Standards, the Financial Planning Association (FPA), and the National Association of Personal Financial Advisors (NAPFA).  A primary aim of the Coalition is to promote the Certified Financial Planner designation (which are owned by the CFP Board of Standards) as the regulatory standard for the financial planning profession to the exclusion of all other non-CFP financial planners.  

The letter, signed by the CEOs of all three organizations (none of whom are CFPs), reported that the research study found that demand for true holistic financial planning guidance runs high. However, it stated, “Consumers are confused and misled by the many titles of financial service providers,” and are “harmed by the lack of regulation of those who hold themselves out as ’financial planners.’” It also concluded from the research that, “lack of regulatory standards for financial planners encourages many advisors – in part as a result of perceived economic incentives – to hold themselves out to consumers as financial planners without meeting any competency or ethical standards or, in many instances, even providing financial planning services.” 

To solve this problem, the letter’s authors proposed, “Reasonable regulatory standards, as embodied in the CFP® certification” to ”reduce harm to consumers by requiring financial service providers who hold themselves out as financial planners to meet basic competency standards and to provide their services under a fiduciary standard of care – which requires them to put their clients’ best interests ahead of their own.

While the letter and its accompanying self-serving “research” (more akin to political polling) are likely generating the desired attention its media-savvy crafters intended, an informed reading of the FPC materials reveals a campaign that is at odds with the ethical preaching of its three member organizations.