1969 was a heck of a year. We saw the first moon landing, the peaceful gathering of youth at Woodstock and the birth of the financial planning profession.
According to Denby Brandon and Oliver Welch, authors of The History of Financial Planning (Wiley & Sons, 2009), on December 12, 1969, thirteen men gathered at the O’Hare Hilton in Chicago and declared the task of covering multiple personal financial issues and how those subjects interacted to be a unique service and more effective way to help clients make sound financial decisions.
The next 50 years have seen an evolution of that basic idea and a veritable revolution that has changed how the public interacts with its finances.
It was evident to those at the O’Hare meeting that clients benefit more from professional assistance integrating the various aspects of their finances than trying to address those issues in piecemeal form through product sales.
Since then, we have seen the creation of the International Association for Financial Planners (IAFP), the College for Financial Planning, the CFP designation, the Institute of Certified Financial Planners (ICFP), the International Board of Standards and Practices for Certified Financial Planners Inc. (IBCFP) now known as the CFP Board, NAPFA, the Foundation for Financial Planning and the FPA.
The evolution also saw the creation of a code of ethics, practice standards, disciplinary rules and procedures, the establishment of financial planning education programs in addition to the College, the creation of the International CFP Council and FPSB, the introduction of a comprehensive certification exam, the Journal of Financial Planning and the Center for Financial Planning among other things.
A decade ago, the FPA successfully sued the SEC to maintain the line between advice and sales. Today, the real financial planning profession doesn’t even question the importance of a bona fide fiduciary standard of care.
It wasn’t all smooth sailing. Far from it. During my career, the “CFP Lite” fiasco scarred the profession like no other. The way that was rolled out damaged trust and faith in the body charged with keeping standards high. The series of CEOs at the CFP Board that followed did little to instill confidence and the CFP Board is still feeling the ramifications today as it tries to balance its need for confidentiality in many matters like disciplinary hearings and its need to engage the profession in dialogue on important issues.
Today’s Profession
Clearly, there is a lot for professional financial planners to be proud of today.
There has never been more CFP certificants in the U.S. and abroad. Never more presence in academia with more research into all aspects of financial planning and more registered programs and financial planning degree programs in colleges and universities educating new practitioners. Never more countries affiliated with the FPSB. Never more pricing models and never more clients being served.