Is A Showdown Looming?

A showdown of sorts appears to be looming between the CFP Board of Standards and the Financial Planning Association, supported by many longtime licensees who devoted a great deal of energy to give the mark the status that it has today. It's not the first time the two organizations have clashed, but it is one of the stranger confrontations between the two groups.


The issue that has triggered the latest conflict is the CFP Board's revision of its practice standards and code of ethics. Some who had served as volunteers and directors of the CFP Board questioned the need for revising practice standards, given that the last series of revisions took place only five years ago.

In the view of former CFP Board Chair Rick Adkins, who played a leading role in the development and adoption of those standards introduced at the turn of the millennium, the most recent proposed revisions "gut" the previous standards. He isn't the only one saying that the new practice standards essentially have become best practices guidelines.

One of Adkins' chief criticisms is that nothing in the new proposed standards addresses how practitioners should apply the six-step financial planning processes in a manner consistent with the enlightened practice of financial planning. Some are wondering whether the new set of standards were conceived and written by folks who rarely, if ever, provided individuals with financial advice-and whether they were devised and relaxed with an eye towards expanding the number of CFP licensees and perhaps cutting deals with big wirehouses. The nation's largest securities firms have been losing market share to independent advisors, many of whom possess the mark that the CFP Board itself has dubbed the gold standard of financial planning.

But today's CFP Board could learn some lessons from the tone with which Adkins overhauled standards in the 2000-2001 period. It came at a time when the universe of licensees was in open rebellion after the board proposed its ill-starred and subsequently aborted Associate CFP designation in an imperious "down your throats" manner.

Adkins spent a lot of time meeting with all the board's most outspoken critics as well as more rational, but still suspicious, skeptics. In doing so, he defused much of the resentment that had been slowly building among licensees.

With the comment period likely to be extended beyond September 25, there is still time for the current board to listen to thoughtful licensees and salvage the process. According to some sources, CFP Board Chair Bart Francis wants to do that. But the process so far bears many of the hallmarks of a return to the "down your throats" era.

The CFP Board appears to be obsessed with looking at how best to play all the political and economic angles from Wall Street to Washington, while exhibiting disinterest about what's best for the public, the CFP educational programs and the profession. The recent announcement that the board is considering making a bid to conduct a survey for the Securities and Exchange Commission about whether consumers understand the difference between a broker and a fiduciary is hardly encouraging. It cannot claim to be an unbiased observer.

Evan Simonoff