The financial planning profession has never been needed more. Personal finance just gets more complex and more responsibility for financial stability falls on the shoulders of the public.
One hallmark of a true profession is addressing a society-wide need. Helped by financial planner advocacy, financial literacy programs are mandated in more school systems in more states than ever. This reflects the importance of financial decision making as a societal issue. More planners are engaged in pro bono efforts, another sign of the professionalization of financial planning.
As more and more consumers understand what professional financial planning is all about, demand is soaring and causing the financial planning profession to innovate more service and pricing models and changing the financial service industry as it attempts to shift to a planning orientation.
There has also never been more responsibility on the shoulders of planners. Those of us who seek to professionalize financial planning have long advocated that a bona fide fiduciary standard was the only standard that makes sense for the profession and that those practitioners that were not under a formal legal fiduciary obligation by virtue of their regulatory status should at a minimum conduct their business as though they would be held to a fiduciary standard anyway.
Today, the CFP Board’s new standards certainly make the statement that they see it that way. Most practitioners I know don’t have a problem with a fiduciary standard, but many have employers that do. Sadly, the Securities and Exchange Commission seems to be focused on helping sales organizations fight the movement toward fiduciary advice.
The SEC’s rewrite of the English language through Reg BS, sorry, Regulation “Best Interest”, is atrocious. The name of the rule itself and the new CRS will cause consumer confusion. Their new videos for consumers do a decent job covering differences between brokers and advisors but they suggest both are held to the same standard of care. Worse, their latest interpretation of solely incidental defies logic, common sense and the intent of Congress when the ’40 Act was passed.
What’s next?
Future: A profession In Peril
We have come a long way, but this is a scary time for the profession. The public needs the profession more than ever but there are forces that can keep the two apart and the profession has some profound needs.
We need more real financial planners from all parts of our populace to serve the growing needs of the public. The diverse potential client base is best served by a diverse array of practitioners. Meeting the public’s need for help starts on campus.