A bill has been introduced in the New York State Assembly requiring financial planners giving advice to the elderly in the state to be certified financial planners (CFPs).
Under terms of the bill, certification means "having fulfilled all ethical, educational, and certification exam requirements set forth by the Certified Financial Planner Board of Standards or a nationally recognized accreditation agency acceptable to the superintendent of banks."
The term financial planner refers to those planners who live in New York state and who "sell or promote" investment planning and other products and services to the elderly, considered someone 60 years of age or older.
"Our concern is that it is overly broad. Would it include accountants, estate planners and attorneys whose clients are over 60?" said David Goldfarb, managing partner of law firm Goldfarb Abrandt Salzman & Kutzin LLP in New York, which specializes in elder law.
A delegation from all eight New York chapters of the Financial Planning Association, representing approximately 200,000 client households in the state and overseeing assets of $140 billion for the elderly, went to Albany and met with members of the Assembly and Senate. While there, they were asked for their thoughts on the bill. FPA-NY members are taking a look at the bill and want to work with the sponsor to help protect seniors.
David Mendels, CFP, president of FPA's New York City chapter, and director of planning at Creative Financial Concepts LLC in New York City, spearheaded the cooperative movement among the eight state chapters.
"It's about full disclosure and conflicts of interest. It's really about the interests, standards of care, and putting elderly clients' interests first," said Mark Brownstein, president of the FPA's Greater Hudson Valley chapter, and member of the delegation. "The Dodd-Frank bill didn't get passed in the format we had hoped."
"A certified financial planner has the skill set to look at the entire future planning perspectives for the elderly," added Brownstein, regional field support manager of CPS Elite Advisors Insurance Services in Mamaroneck, N.Y. "Elderly clients want objective advice from a competent, ethical certified financial planner who will help them make smart financial decisions."
Brownstein added the group is hoping planners in other states will follow suit.
Phillips Hinch, assistant director of government relations for the FPA, said, "We're studying the bill. We're looking at it at this point."
-Bruce W. Fraser