Ray Ferrara has performed a service by articulating and describing the agenda of what he might call the modern-day CFP Board.
As far as "the numerous inaccuracies" in my original blog, I have only one regret that needs to be clarified. From the way words were originally juxtaposed, one could have interpreted it to imply that Kevin Keller’s advisor, who served on the CFP Board, was interested in giving him a raise partially so he or she could have more assets to manage. The implication was inaccurate, unintended and, yes, offensive.
Keller’s salary in 2012 was not determined by Ferrara, who was not chair at the time.
The big question many CFP licensees are asking is where did the rest of additional $13 million in CFPB revenues go after their certificant fees were doubled? In my original blog and in subsequent comments, I tried to make clear that Keller’s total compensation is in line with many other non-profits and should not be the issue, although the timing of his increase and the increase in member fees looks more than coincidental to the average certificant.
As a non-profit, CFPB must spend the bulk of its annual income or risk losing its tax-exempt status. so when revenues doubled in a few short years, the organization found itself awash in money it had to put to work. It's a nice problem to have and might even be funny if it weren't your money. it's a bit like the Richard Pryor movie "Brewster's Millions" in which the character had 30 days spend $30 million if he wants to inherit $300 million. With double the budget, CFPB had to figure out what to do.
Though he doesn’t break out budget line items, Ray Ferrara provides a detailed description of several aspects of their new agenda. Some might call it expansive and unnecessary; others might call it admirable.
Ferrara also writes, “But most offensive are Mr. Simonoff’s misguided and inflammatory charges that the Board of Directors is not fulfilling its oversight obligations.” What prompted that blog, which I grant is opinionated, were phone calls I received from several people who taught the ethics class and complained that the CFPB had indicated the teachers would not receive the revised ethics guidelines on April 1 as they had been promised. Subsequently, I made a few more phone calls and learned that a revision of practice standards was aborted—at least temporarily.
All these advisors had volunteered hundreds of hours to the CFPB and they considered ethics guidelines and practice standards to be essential functions of the board. While revising practice standards can be an arduous process, ethical guidelines should be relatively straightforward.
Some voiced concern that the CFPB’s ambitious agenda was distracting the organization from fulfilling its intrinsic mission of serving as custodian of the CFP mark and protecting the public. Others believed that the expanded agenda was a serious mistake and that the CFPB was overstepping its bounds. Whatever you think, it is worthy of a debate among certificants, not just the board, even if they are the ultimate decision-makers.
Let’s look at what Ferrara describes as the many accomplishments of today’s CFPB.