When asked about financial planning as a profession, most advisors get introspective with observations like, "I don't know if our industry is a profession yet, but I know I'm a professional."

Why the reversion to a standard of personal conduct? Is it because defining a profession is less straightforward than we'd like to believe? Probably, yes. Professionalism does involve standards of personal conduct, of course, but it also seems to hinge on historical events, governmental edicts and self-regulatory efforts.

The accounting profession provides an example of how a discipline evolves to become a profession, and how that result was influenced as much by events within as outside of accountants' control. Some historians believe the practice of accounting goes back as far as 3600 B.C., the origin of stone tablets on which were recorded commercial transactions. By the mid-700s A.D., Muslim societies were known to use increasingly sophisticated and detailed accounting systems. And in 1494 A.D., Luca Pacioli-an Italian mathematician and Franciscan friar-published a description of the double-entry accounting system in use by Venetian merchants during the Italian Renaissance.

In the United States, the profession of accounting was largely founded in the 19th century by accountants who migrated here from England and Scotland. The profession gained a self-regulatory body in the form of 1887's American Association of Public Accountants-the organization that eventually became the AICPA (American Institute of Certified Public Accountants). In the early 20th century, state legislatures enacted laws providing for the examination and certification of public accountants and restricting the performance of opinion audits to CPAs, which resulted in the establishment of a state-based monopoly fundamental to assuring accountancy's status as a recognized profession.

A historical event known to all as the Great Depression only furthered accounting's legitimacy as a profession by giving rise to 1933 and 1934 federal securities legislation requiring CPA audits of publicly traded firms. During the 1950-70 period, the accounting industry witnessed the rapid growth of national firms through large numbers of acquisitions of local and regional firms. And by 1970, the competition for audit services was so heated that accountants began looking to other services, such as consulting, to replace lost audit income. By the 1980s and 90s, accounting firm consolidations further concentrated the industry from the "Big 8" to the "Big 5."

The takeaways from this example are, first, that accounting was recognized to be essential to commerce. Second, an unanticipated historical event-namely, the collapse of Wall Street and the banking industry in 1929-expedited the recognition of accounting as an essential profession due to the need for audited financial statements that might have helped prevent this crippling economic incident.

But where does that leave financial planning? If we arbitrarily date the inception of what we do to the year in which the College for Financial Planning opened its doors-1972-then this industry that will soon celebrate its 40th birthday still isn't perceived by the general public as "essential." And no twist of fate nor historical calamity has occurred that might have contributed to and hastened this perception.

Furthermore, says Jack Blankinship Jr., CFP licensee, veteran advisor and co-owner of Blankinship & Foster in Solana Beach, Calif., "Another thing we don't have is recognition by a sovereign body and criteria that would allow that body to license us. All other professions, as well as many trades, are governed-usually by the states. We don't have exclusivity. Anyone can put up a shingle, and that's why I don't consider us a true profession yet," says Blankinship.

"We don't have a government sanction, and probably never will," adds Harold Evensky, another CFP licensee and CEO of Evensky & Katz in Coral Gables, Fla. "We're still a 'volunteer profession' that must boot-strap its way to professional status with education, ethics and other standards."
Bert Whitehead, JD, MBA, and head of the planning firm Cambridge Connection, Inc. in Tucson, Ariz. and the Cambridge Financial Advisors network that trains fee-only advisors, has thought long and hard about this subject. Referencing a Harvard Business Review article he read in 2005 entitled, "Is Business Management a Profession?" Whitehead finds truth in the authors' pronouncement that, to be a profession, a discipline must demonstrate the following four traits:
a common body of knowledge resting on a well-developed, widely accepted theoretical base;
a system for certifying that individuals possess such knowledge before being licensed or otherwise allowed to practice;
a commitment to use specialized knowledge for the public good, and a renunciation of the goal of profit maximization, in return for professional autonomy and monopoly power;
a code of ethics, with provisions for monitoring individual compliance with the code and a system of sanctions for enforcing it.

The list suggests that, while oversight by a governing body is one element of a profession, just as important are traits related to our behavior as practitioners. "The first thing we have to do," says Whitehead, "is get rid of our sales mentality. Many people who come into financial planning are just looking for that seven-figure W-2 they get from making the big annuity sale. Financial advisors must be compensated as professionals and should make as much as other professionals with similar levels of education and experience."

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