1969 was a year to remember. We saw the first moon landing, the peaceful gathering of youth at Woodstock and the birth of the financial planning profession.
According to Denby Brandon and Oliver Welch, authors of The History of Financial Planning, on December 12, 1969, 13 men gathered at a hotel meeting room near O’Hare Airport in Chicago to discuss more effective ways they could help people make sound financial decisions.
The next 50 years have seen an evolution of that basic idea and a veritable revolution that has changed the way the public interacts with its finances. It was evident to those at the O’Hare meeting that clients benefit more when professionals help them integrate the various aspects of their finances—and not as much when professionals try to address the issues in piecemeal form through product sales.
Since then, we have seen the creation of the International Association for Financial Planning (IAFP); the College for Financial Planning; the CFP designation; the Institute of Certified Financial Planners (ICFP); the International Board of Standards and Practices for Certified Financial Planners Inc. (IBCFP), now known as the CFP Board; NAPFA; the Foundation for Financial Planning; and the Financial Planning Association.
There also evolved a code of ethics, practice standards, and disciplinary rules and procedures. Financial planning education programs were established in addition to the college. The International CFP Council, the Financial Planning Standards Board and the Center for Financial Planning were created, and a comprehensive certification exam was introduced.
A decade ago, the FPA successfully sued the SEC to maintain the line between advice and sales. Today, the real financial planning profession doesn’t even question the importance of a bona fide fiduciary standard of care.
It wasn’t all smooth sailing. Far from it. During my career, the “CFP Lite” fiasco in 1999 scarred the profession like nothing else. The way it was rolled out damaged trust and faith in the body charged with keeping standards high. The series of CEOs at the CFP Board that followed did little to instill confidence. The organization is still feeling the ramifications today as it tries to balance its need for confidentiality in many matters like disciplinary hearings and its need to engage the profession in dialogue on important issues.
Today’s Profession
Clearly, there is a lot for professional financial planners to be proud of today.