Window Of Opportunity

Everywhere you look these days, the balance of power is shifting. Times of turbulence, recession and global unrest are rarely good for the status quo, so this shouldn‚t be surprising.

Last month‚s news that the American Institute of Certified Public Accountants (AICPA) is considering discarding its Personal Financial Specialist (PFS) designation due to lack of interest is typical of the times. In about 10 years, the 300,000-member AICPA was only able to recruit 3,000 PFS licensees. Already, loyal PFS certificants are trying to form their own Association of CPA Financial Planners and are initiating an effort to take over the PFS credential from the AICPA.

For the financial advisory business, this presents a rare, if narrow, window of opportunity. As staff writer Ray Fazzi reports on page 18, just under 60%, or 1,700, of the PFS mark holders also hold the CFP designation. When Louis Garday was appointed CEO of the CFP Board of Standards 20 months ago, he expressed a strong desire to grow the ranks of CFP licensees. A CPA himself, Garday stated unequivocally that he believed some of the most fertile ground for attracting new CFPs would be among CPAs.

As a group, CPAs have demonstrated their aptitude for financial planning by passing the CFP exam with more success than practically any other professional group. Garday told Fazzi he hadn‚t approached the AICPA or the Association of CPA Financial Planners but was open to possible talks.

The CFP Board should move on this, but do so very gingerly. In the past, the CFP Board has comported itself in a way that has often been undiplomatic. The CFP Board‚s past lust for power had often infuriated its own licensees, and it hasn‚t won many friends in the rest of the financial services community.

Fortunately, its current chair, Rick Adkins, is truly a skilled diplomat and something of a visionary. More than most CFP Board types, he is largely immune to being seduced by the delusions of grandeur that high-level CFP Board appointments sometimes confer on decent, well-meaning individuals.

Even if the CFP Board can‚t work out a deal with the AICPA, it needs to continue to find ways to unify the profession. In the past few years, the number of CFP licensees has climbed from about 36,000 to 41,500, impressive growth in light of the recent economic environment. But greater numbers will give the profession more clout at a time it desperately needs exactly that.

Challenges abound, not just for the CFP Board but for the entire profession. Last month we reported that the Securities and Exchange Commission was reviewing the regulatory status of the advisory business and that there was a possibility that the National Association of Securities Dealers might fill the breach. Many advisors are apoplectic about that prospect. But even if the NASD doesn‚t get the call, more regulation probably is on the way.

It‚s up to both the CFP Board and the Financial Planning Association to find allies on Capitol Hill who understand the sometimes inscrutable independent advisory profession and make it clear to them that advisors had practically nothing to do with any of the scandals that they are currently investigating. And the guess here is that the CFP Board may take several steps in the next few months to show they are not a rubber-stamp regulator of the profession. For once, their timing could be propitious.