High deductible plans are becoming an increasingly popular subset of the so-called consumer directed plans, which were up 6% in 2010, according to a survey by Towers Watson and the National Business Group on Health.
Copyright © 2011 Dow Jones & Co. Inc.

CFP Board Puts Spotlight On Bankruptcies
With the Certified Financial Planner Board of Standards Inc. this spring rolling out a national public awareness campaign to promote the message that CFP-certified financial planners should be the advisors of choice for the investing public, the organization will stress the need for certificants to live up to the billing.

"I think our primary focus in 2011 will be on education," says Ed Mora, who in January begins his one-year stint as chairman of the CFP Board's Disciplinary and Ethics Commission (DEC). He said that means more webinars and speaking engagements to get the word out to certificants to make sure they understand the rules and process, especially in light of the new public awareness campaign.

"My understanding is that the campaign will highlight the fact we have high ethical standards and we vigorously enforce them," Mora said.

Mora is vice president and senior relationship manager for Bank of the West Wealth Management in Newport Beach, Calif. He replaces Trish Coriden, chief fiduciary officer at Central Trust & Investment Co., as the DEC chairperson. He has served on the DEC since 2008.

The nine-member DEC--seven are CFP professionals and two are public representatives--meets tri-annually to hear cases of possible infractions by CFP practitioners of the organization's conduct and ethics codes. The CFP Board says it has 400 active ongoing cases on average. Mora says the three main types of cases seen these days involve bankruptcy, Ponzi schemes and securities violation-type matters such as misappropriation of funds and poor record keeping.

Mora says bankruptcy cases have risen "dramatically" in recent years due to the economic downturn. "Most we see are personal in nature, not necessarily the practice going under," he notes.

A person can't be awarded the CFP marks if they've had a bankruptcy within the past five years, but Mora says the individual can appeal and the DEC will hear their case. "But once a person is a certificant we take bankruptcies very seriously because you want a CFP to manage their finances effectively if they're going to advise others," he says. "Bankruptcies come in many different flavors, and we look carefully at each situation on a case-by-case basis."

Addition Through Subtraction
A study of 15 wealth management firms with more than 15,000 advisors total found that all of them trimmed the number of small household accounts (less than $100,000) they serve by 3% to 14% in the one-year period ended August 2010, and that advisors boosted their annual revenues by $7,700 for every 1% reduction in these types of accounts.

PriceMetrix, the Toronto-based software company serving the financial advisor industry that conducted the study of North American wealth managers, concludes that household accounts of less than $100,000 don't justify the expense of servicing them in a traditional way because small households are 108 times more likely to leave an advisor than grow into a larger account.