Editor's Note: This story has been updated from a previous version that gave the mistaken impression that the FPA is releasing a "new" strategy for title protection.
The Financial Planning Association will soon unveil the "next step" in its strategy for shoring up the title of “financial planner” so that people who use the title are subject to a set of standards, an association official said.
“Everyone agrees that there’s confusion in the public because anybody can hang a shingle out and call themselves a financial planner,” FPA 2024 President-Elect Paul Brahim, who managing director and senior vice president of Pittsburgh-based Financial Advisor Wealth Enhancement Group, said in an interview. “So, people can call themselves a financial planner without any training, or education or continuing education, experience requirements or ethics.”
Brahim said such an arrangement can be harmful to the public and creates the potential for abuse.
To combat that, early next year the FPA says it will unveil a plan on what the organization would like to see done to establish stability with the title. In June the organization’s board unanimously decided to make it a principle public policy aim for the year. Since then, the FPA’s national volunteer leaders along with its CEO, Patrick Mahoney, have been meeting with interested parties to address the situation, according to Brahim.
“We spent all our time [since June] meeting with … stakeholders in this idea,” he said. “Getting some perspective on what their view of title protection means and what the pros and cons are.”
"You will see this year we will begin to roll out our views on what our next steps are," he said. "It's been our belief from the beginning that this is probably a long effort that may be state by state."
Brahim said the standards should be broad-based.
“I don’t think it comes down necessarily to a certification, but rather a set of standards,” he said.
Financial planners should be the only ones allowed to create financial plans for their clients, Brahim explained.
“We want to be sure that we get it right and the aim is to elevate financial planning and to identify them as a unique and distinct profession,” he said.
He acknowledged that the drive for title protection is a long-term advocacy objective that will take several years to complete.
He pointed out that by elevating the position of financial planning, it can become a more attractive position to younger generations as well as women and minorities.
“I think it’s important for the future of our profession to make it attractive to younger people and to a broader and more diverse group of people that planning is elevated as a unique and distinct profession and if you’re not a planner, you can’t engage in financial planning,” he said.