The Florida Financial Planning Association supports licensing financial planners to promote credibility in the profession and to protect the public, says Chris Draughon, Florida FPA director of advocacy and 2015 president-elect.
But any licensing or regulation of financial planners probably would have to be done on a state level, rather than a national one, Draughon says.
The Florida FPA is working with national financial organizations to increase awareness of the need for a licensing procedure, says Draughon. Philip Herzberg, incoming president for Florida FPA for 2015, and Michael J. Zmistowski, Florida FPA chairman, say the Florida organization, which includes nine regional FPA chapters, is in the forefront of the efforts to license financial planners.
Members of the Florida FPA meet with state legislators and regulators regularly to help make them aware of the need for regulation. No legislation has been drafted yet, Draughon says.
“Licensing is integral to increasing the public’s trust of financial planners,” says Herzberg. “I think any action would have be started on a state level and I think the Florida FPA can provide leadership through advocacy.”
Draughon feels there is no appetite for having financial planners regulated on a national level. To do it on a state level, there would need to be model legislation so each state does not have to start from scratch, and there would need to be reciprocity because so many planners work in more than one state.
“But right now anyone can call themselves a financial planner,” says Draughon.
The national Financial Planning Coalition on Oct. 20 issued a statement advocating licensing for financial planners because it said the public is being confused by the many different terms used in financial circles, including financial planner, financial advisor, wealth manager and investment advisor.
The FPC also says there is no assurance for the public that the person they hire is acting in ethical manner.
“It becomes clear that common sense regulatory standards for financial planners are needed to protect consumers,” the FPC said in a press release.