Wait? There has been enough waiting. I can’t remember a time when there wasn’t regulatory uncertainty. As I told Tracey Longo of this publication back in February, “If true financial planners had waited for government to raise standards, we wouldn’t be using ‘financial planning’ and ‘profession’ in the same sentence today.”

Perhaps the most important thing CFP Board did not do is they didn’t cave to pressure. Read the public comments from SIFMA, Ameriprise, Wells Fargo, LPL, RBC, Morgan Stanley, UBS, FSI and ACLI and you will see a recurring theme. They all include a line like this one from Ameriprise, “Our firm is committed to acting in the best interests of our clients.” They then follow with the assertion that complying with the fiduciary duties and practice standards would be burdensome and could result in firms banning their personnel from using the marks in their marketing. That’s like a fat guy saying he believes in eating healthy while he devours a jumbo bucket of KFC.

I don’t know if a lot of CFPs will relinquish their rights to use the marks or not. I suspect a few will and some of them need to go anyway. They went after the CFP marks simply to trade on its credibility and sell more stuff. They don’t view financial planning as a profession. Good riddance.

But, frankly, there really aren’t many of these CFPs left. Most people that go through the considerable requirements to become a CFP certificant see the value of doing real financial planning.

Nonetheless, there will be victims. The people that are most likely to get screwed by all this are those CFP licensees that work for companies that follow through on their threats. These certificants, many of whom are already doing the right things and are part of the profession, may have a very tough choice to make. The more tied up to their firms they are, the lower the chance they will be able to stay certificants. I feel genuine pain when I think about those CFP licensees that are already doing good work and might be bullied like this but the problem is with their company, not CFP Board. 

Every weekend I see scores of commercials from big traditional sales-oriented companies touting planning. Well, CFP Board has provided a litmus test for who really is onboard with professionalizing financial planning. The only way a new requirement can be a burden is if one isn’t already engaging in the behavior. Those that won’t support the marks are admitting they aren’t really a source for financial planning or wanting to be part of the profession.

Some companies will indeed probably make this choice. Note: To get the 5th circuit to cut down the DOL’s fiduciary rule, they literally proved they don’t give advice, they just sell. So, it is not a stretch that they could bail on the CFP marks in similar fashion.

While I feel bad for their personnel that are adversely affected by such a choice, I think such a stance could end up being good for the profession and therefore the public. It may become clearer to the public, where they can get competent and ethical financial planning advice, which is what matters most for their financial security.

I don’t know if the SEC will be at all embarrassed by CFP Board’s actions. I hope not. Rather, I hope they will be inspired to join the movement. If you can’t get behind regulating planning as a distinct profession, at least use existing law to protect consumer interests. Enforce the solely incidental part of the ’40 Act better and make switching hats to a non-fiduciary standard require more than a disclosure. Better yet, ban hat switching all together.

The SEC is floundering as it seeks to protect the broker dealer’s ability to present themselves to the public as advisors but not be held to an advisor’s fiduciary duty. The new proposal from the SEC only bans “financial adviser(or)” titles for people that are not registered to give advice at all and still leaves the less ethical hat switchers free to use the bait of advice and switch to a less than fiduciary standard of care.