Expanding The Vision

At last month‚s Financial Planning Association conference in Philadelphia, association leaders continued to define a vision of their changing role in a world that is evolving at an ever-faster pace. The conference took place against the backdrop of the expanding mutual fund/market-timing scandals, which gave attendees cause for both conversations and concerted brainstorming about how the advisory profession could avoid the rash of scandals that have hit virtually every other segment of financial services.

FPA president David Yeske passionately and correctly urged attendees to embrace fiduciary responsibilities and to continue to raise the bar, partly to help the public differentiate between those who conduct financial planning and others who call themselves planners as a means to increase product sales. But Yeske didn‚t stop there. Noting how fortunate many advisors have been to participate in this emerging profession, he asked attendees to seriously consider public service and engaging in pro bono work.

If the message possessed a missionary tone, it was well-received and could not have been better timed. Most advisors in Philadelphia were caught off guard by the extent of the mutual fund industry‚s scandals. Several conversations centered on whether to move fund groups and, if so, where to move them. The scandal, which began with only four or five funds, soon mushroomed to impact more than 20 fund groups.

Since the scandal shows no sign of approaching a conclusion, many advisors worried that if they moved funds to another investment company, it would be charged next. Most attendees agreed that mutual funds were still a viable vehicle for most of the investing public, but they argued whether new regulations would be sufficient to reduce self-dealing. Some argued only a spate of criminal convictions could change behavior.

Yeske‚s call for pro bono work met with a positive reception, albeit with a little quibbling. "Advisors in the FPA can be of great value when there is a tragedy like 9/11 or the California brush fires, but most of us aren‚t trained to address the biggest problem affecting most Americans–credit and debt problems," one leading practitioner noted.

The new philosophy at the FPA was evident throughout Yeske‚s talk. Basically, his theme was, we have done well by doing good for our clients, and if we can share some of that good with the public at large, it will be a win-win for everyone. This new tact helps explain why this was the last FPA national conference to be named Success Forum. Next year‚s event simply will be named FPA Denver 2004. It‚s a mark of how far this profession has come that the focus can be shifted from success (15 years ago it was survival) to more global concerns of the public at large. Some wondered if the profession is all the way there yet, but Yeske has the courage of his convictions.

Some advisors understandably are still absorbed in more immediate issues. After all, it‚s been a rough three years for most Americans, even if they don‚t work in this business. The worst stock market crash in 70 years, the worst foreign attack on this nation in its history, the worst accounting scandal ever and the worst deception by more than a few mutual funds in their history should provide enough material for a bad decade, not a bad three years.

But when one realizes how well this profession survived this turbulent period, it‚s natural to feel gratitude and take a step back to look at the big picture.

Evan Simonoff, Editor-in-Chief