The Financial Planning Association has signaled its intent to leave the Financial Planning Coalition at the end of 2022, according to FPA board chair Skip Schweiss. Senior officials active in the membership association described the breakup as amicable.
One reason for the apparent move is that the FPA wants to pursue “title protection” and focus its resources primarily on that problem. Since the profession was formed in the late 1960s and 1970s, advisors and planners have found it highly problematic that any citizen can call themselves a financial planner.
The reality is that there are no real laws or regulations that prevent children or even cats from calling themselves a financial planner and dispensing advice. In contrast, hairdressers, barbers and numerous other tradespeople must be licensed.
The FPA’s move is producing frustration and displeasure among other organizations and individuals in the profession who believe a relatively small, young industry needs to speak as a single voice if it wants to have any clout in Washington, D.C., or the national conversation about the evolution of advice. The Financial Planning Coalition was formed about 12 years ago by the FPA, the CFP Board of Standards and the National Association of Personal Financial Advisors to marshal their collective strength to leverage their influence on regulatory issues.
When contacted by Financial Advisor, the CFP Board said, “CFP Board is disappointed that FPA has chosen to leave the Financial Planning Coalition. We believe the public and financial planners are best served when the leading national organizations representing the profession speak with a unified voice on policy issues.”
This disappointment may explain why the FPA intends to downplay its exit. “While we are not going to make a formal announcement, the FPA Board of Directors has decided that FPA will depart the Financial Planning Coalition at the end of the year,” Schweiss said. “We believe this will allow us to fully focus our resources on the legal recognition of financial planners through title protection.
“Whether CFP Board and NAPFA are supportive of our decision to pursue title protection is something they will need to determine for themselves in the best interest of their organizations and their stakeholders,” Schweiss continued. “Our decision to leave the coalition doesn’t mean FPA will not work with CFP Board and NAPFA on other issues and in other capacities. We respect them, consider them friends, and look forward to building on those relationships in the coming years.”
Schweiss said the FPA conducted a member survey this spring and title protection surfaced as the top issue. Fully 78% of the association’s members urged the FPA to pursue the issue and only 4% were opposed.
Schweiss said the profession needs to be better recognized and the FPA needs to put its resources behind the move.
Apparently, FPA officials met with leaders of the CFP Board and NAPFA in recent months and some FPA leaders voiced concerns that the coalition was ineffective. They immediately were subjected to skeptical questions. One official at another group asked how the FPA, with about 19,000 members, could wield more influence than a coalition with 93,000 CFP certificate holders, as well as about 100,000 professionals in total.