Trade Associations
What Does FPA's Partnership With The Accredited Financial Counselor Designation Mean To CFPs?
Wednesday, February 01, 2012 10:50

Tags: CFP Board | financial planning


The Financial Planning Association recently announced an alliance with the Association for Financial Counseling and Planning Education. AFCPE provides designations to financial advisors and you have to wonder if the partnership could affect the value of the Certified Financial Planner designation.

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“The joint efforts will provide significant value to the constituents of FPA, the nation’s largest membership group for personal financial planning experts and AFCPE, which is dedicated to educating, training and certifying financial counselors and educators,” says the January 23 press release issued by FPA.
FPA faces some serious challenges, and has experienced a slump in membership at FPA. Unlike other industry membership groups, such as the CFA Institute, the Investment Management Consultants Association, American Institute of CPAs, and AFCPE, FPA does not award a designation to its members. In an age of social networking, where advisors can connect without the help of a professional association, FPA’s business model could be outmoded. That’s why FPA’s alliance with AFCPE could be provocative.
FPA’s ranks have long been dominated by CFPs. If FPA is seeking to grow by putting its imprimatur on additional designations—those supported by AFCPE—it’s fair to wonder whether the importance CFP designation will be diluted.
AFCPE licenses the Accredited Financial Counselor designation. Its purpose is to “develop the profession of personal finance by promoting linkages among educators, practitioners, researchers, and with other relevant groups,” according to its website.
AFCPE looks like a credible young professional association. According to Form 990s filed with the IRS, AFCPE generated about $1.3 million in revenue in 2010 and it first filed a Form 990 in 2007. About $621,000 of its 2010 revenue was generated through its conference and course, while $489,592 was generated on educational activities, and $195,711 of revenue came from membership dues. Many members of its Board of Directors are educators.  
It will be interesting to see how FPA’s partnership with AFCPE affects CFPs.


Financial Services Institute Goes Head To Head With Financial Planning Coalition Over Fiduciary Standard
Monday, January 30, 2012 09:34

Tags: fiduciaries

The Financial Services Institute is made up primarily of independent broker-dealer reps. They're not fans of the Labor Department's efforts to enforce a fiduciary standard on all retirement plan advisors.

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The FSI's argument is that if everyone who provides 401(k) or IRA advice is required to sacrifice his or her personal interests, "unbiased, affordable advice" in the retirement market will disappear.



Despite some reports, a recent summit between the FSI and the Labor Department was not exactly motivated by the pro-fiduciary Financial Planning Coalition's efforts to promote a retirement fiduciary standard.


The FSI is not in the Coalition, which consists of the Certified Financial Planner Board of Standards, the Financial Planning Association, and the National Association of Personal Financial Advisors.


When FSI talks about a "coalition," they're talking about their own allies -- an entirely different group of industry organizations.


The Financial Planning Coalition appears to have written a letter to DOL last month and may be working hard behind the scenes to achieve its goals.


But until they tell us, we just don't know.


Financial Services Institute Holds Its Annual Meeting, Highlighting Its Growth As Financial Planning Association Struggles
Tuesday, January 24, 2012 10:03

Tags: broker-dealers | fiduciaries | financial planning


At Financial Service Institute’s (FSI) annual conference this morning, it was clear that the trade group has deftly steered a course toward growth and influence as the Financial Planning Association (FPA) has stumbled.

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With 641 attendees, most of them senior operations, marketing and management executives at independent broker/dealers, the conference attracted 50 more attendees than last year and set a new record. But at a breakfast this morning for reporters from trade magazines the growing strength of FSI seemed inevitable.
FSI now has 34,000 members, compared with less than 24,000 at the FPA. Since 2005, when FSI had 2,737 members, it has grown more than 1200%.
The numbers are slightly skewed, however, because many FSI membership fees are being subsidized by B/Ds. The group has cleverly recruited new members by encouraging BDs to pay the first-year’s membership fee in 2012, and about half the group’s 34,000 members benefit from subsidizies. Still the growth is impressive, and FSI’s leaders say the group is focusing on member engagement and advocacy to minimize attrition.
Dale Brown, CEO of FSI (at center in picture above) , says the group’s budget soared 25% from $4 million to more than $5 million, with about 65% of the increase going to hire more staff, largely focused on expanding the group’s lobbying effort. 
FSI’s growth stands in stark contrast to the struggling FPA, which experienced a membership loss in recent years and is particularly intriguing considering that FSI was spawned by the FPA.
FSI was the B/D division of the FPA until 2002. The B/D division was jettisoned by FPA because the B/D’s advocacy priorities were thought to be different from its membership’s.  
With the leadership of the FPA in 2002 moving toward a professional model that today is manifested in its support of a strong fiduciary standard, it made less and less sense for FPA to share the podium with B-Ds.
Making FPA a planner-centric organization sowed the seeds for the rise of the FSI and the weakening of the FPA. With successful practitioners who supported the professional movement in control of the FPA, the group asked B/Ds to leave in 2003. FPA paid FSI $1 million to help FSI get started.
The professional issues separating the two groups back then define the two groups today and make them rivals. No one at the time envisioned that the B-Ds would create a rival membership organization for registered representatives. Yet that’s exactly what has happened.
Now, FSI is throwing its weight behind FINRA to become the self-regulatory organization for RIAs who have more than $100 million under management and are regulated by the SEC. The FPA opposes FINRA as SRO. FSI’s position on adoption of a fiduciary standard for financial advisors, also puts it at odds with FPA.
By 2015, Brown says FSI’s five-year plan calls for the group to have a budget of $7.5 million and 40,000 members.
FPA supporters say that in order to create make financial planning a profession, the group had to make the difficult decision to separate from the broker/dealers and their registered reps.  But the results so far have not been impressive and you have to wonder about the wisdom of that decision to empower a separate B/D group and registered rep trade group.
It’s an astonishing turn of events.


CFP Board Looks To Move Bankruptcy Cases To A Disclosure-Only Basis, Freeing Up Resources For Other Enforcement
Wednesday, January 18, 2012 15:08

Tags: CFP Board

The CFP Board is calling for comments on a proposed change in the way it discloses CFP declaring personal bankruptcy. The move will let certificants who have filed for bankruptcy in the last five years avoid discipline, but they will still need to disclose their credit status.

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Removing declarations of personal bankruptcy from its caseload will "allocate more of CFP Board's resources to investigate other matters such as fraud, misrepresentation, and misappropriation of funds," says the CFP Board, the licensing body of CFPs.


Bankruptcy was a factor in 36% of the 25 actions in the CFP Board's most recent disciplinary report.


Given the more than 60,000 planners falling under the non-profit CFP Board's oversight, planners don't get into trouble very often.


But when they do, the Board wants to make sure its Disciplinary & Ethics Commission has the time to catch them before they sully the good name of the profession as a whole.


As Michael Shaw, the CFP Board's managing director for professional standards and legal, notes, "CFP Board is the only financial planning designation that enforces its rules and standards through a process that may result in sanctions including suspension or revocation of the CFP marks."


Disclosing practitioner bankruptcies ensures that planners who fail to practice what they preach will be publicly noted.


"The proposed policy change continues this commitment of benefiting the public, being transparent and ensuring that consumers are aware of pertinent information about CFP(R) professionals and candidates," Shaw adds. "We believe that this proposed

change provides a better process, allowing for greater consumer protection since we will be disclosing bankruptcy filings for all

CFP(R) professionals."  


The proposal is here. Comments can be sent to  This e-mail address is being protected from spambots. You need JavaScript enabled to view it  over the next month.





Brokerage, Insurance Groups Eager To "Help" The Labor Department Rewrite The Fiduciary Rules
Tuesday, January 17, 2012 09:30

Tags: fiduciaries

The Labor Department has gone to the biggest trade groups in the financial industry for guidance on whether its proposed fiduciary rules will have an impact on their business. The giants have jumped at the chance.

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In a joint letter, the industry groups thank the DOL for giving them input into the new fidicuary standard for retirement plan advice. 


As a group, they are not known for their fierce advocacy of the fiduciary code, shall we say.


The Financial Services Roundtable represents the 100 biggest integrated financial conglomerates: the money center banks, the wirehouses, the true giants.


The Financial Services Institute represents the independent broker-dealer channel and has taken a vocal position against a flat fiduciary standard for all plan advisors.


SIFMA and the American Council of Life Insurers are also at the table. Purely fiduciary-oriented groups like the Financial Planning Coalition are not.


The trade organizations have protested that the proposed DOL rules would force commission-based advisors out of the plan business, making it impossible or very expensive for the typical worker to get retirement advice.


At this point, the odds that they're going to get some kind of exemption look pretty high.


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