The Future of the FPA, the CFP Board and the Organizations that Run the Planning Profession

Last month, I asked readers of Advisor Perspectives to help me think through some complicated issues regarding the future of the profession. Should the professional associations (like the FPA and NAPFA) consolidate in order to create more scale and unity, or should we maintain a healthy competition between them? I noted that the last merger didn’t go so well; the FPA has many fewer members than its predecessor organizations (ICFP and IAFP) had, combined, back in 2000, despite an 18-year increase in the ranks of financial planners.

I asked the same question about designations. In a world where people can get a lot of random designations with a weekend of study, do we need to rally around one designation? Or is the current system, with the CFP, CPA/PFS and CFA as well-respected credentials, and a lot of minor ones, a better way forward for the profession? I noted that most professions eventually settle on a single designation (MD for doctors, CPA for accountants), but the CFP and PFS have irreconcilable differences in their standards and how they view financial planning (i.e., as a standalone profession or an expert subset of accounting).

Many advisors weighed in with their perspectives. The article generated two important postings on the APViewpoint discussion forum, first from Jean-Luc Bourdon, of Brightpath Wealth Planning in Camarillo and Santa Barbara, CA. Bourdon is active in the AICPA PFP section, and was speaking about both associations and designations when he said he believes that the public generally benefits from competition and choice, rather than monopolies. “A profession faces great risks when it is tied to one organization ruled from a large single ivory tower,” he wrote, adding: “We all know the value of diversification.”

Carolyn McClanahan, who happens to know something about professions (she’s a licensed MD in addition to her primary career as a financial planner), took a more nuanced approach. She said that the planning profession needs a “main” designation in order to provide public recognition, but that shouldn’t preclude other designations from remaining in the field. MD, she points out, is the standard in the medical field, but there are also DOs and multiple ancillaries like chiropractors, optometrists, nurse practitioners and physician assistants. “They all add a different flavor to medicine and provide valuable services,” says McClanahan.

Her preference would be the CFP becoming the MD of financial planning, but that we maintain the vibrancy of competition of associations, with the AICPA, CFA Institute, NAPFA, FPA and the Investments and Wealth Institute (formerly IMCA) free to support the profession from different angles.