McClure, who authored his masters of financial planning thesis “Profession and Practice of Personal Financial Planning" in 2014, said that eight years later, financial planning is still a trade, not a profession.
“Bottomline, for all professions, they have to be licensed at the state level. I think the CPA [certified financial planner] model and the engineer model are really good models to go with, and they’re both regulated at the state level,” McClure said.
One possible obstacle to title protection that is the CFP Board of Standards itself, the advisor added.
“The CFP Board earnestly wants to hang on to this, because it’s their source of income and identity. Turning it over to state boards as other professions have done would make the CFP Board like the AMA [American Medical Association]—a voluntary membership organization. Frankly, that would make it like the FPA,” McClure said.
Despite a number of assurances that the FPA and CFP Board are still friendly, the FPA has said it will exit the decade-old Financial Planning Coalition, which will leave the CFP Board and the National Association of Personal Financial Advisors as the coalition’s only two remaining members.
“It’s been reported that FPA decided to exit the coalition due to differences over the title protection initiative,” Schweiss said. “I can tell you I was in the [FPA] boardroom for the discussion and cast a vote and that really wasn’t the driving force.
“We’re still going to work together, we’re still friends, but FPA is really going to apply its resources now to the title protection initiative. One of the things we’ve heard from our members is that it’s time to focus on one issue and not a whole host of issues and that is the direction we’re going,” Schweiss added.
Rostad, who has advocated for tougher fiduciary standards for planners, said the FPA’s new goal of developing new minimum standards “makes it seem as if the past 15 years with [the CFP Board] doesn’t exist.” The group’s latest “Code of Ethics and Standards of Conduct” went into effect in 2019, after years of deliberation and rewrites.
While the CFP Board is on the record saying they do not believe state licensing would work, Rostad said “the whole notion that anyone serious would want to go back to Congress or the SEC has slept through the last 15 years, because they’re not seeing the destruction to advice and fiduciary at the hands of the SEC.”