For CFPs To Be Regarded And Regulated As Professionals, Financial Planning Coalition Must Build Bridges, Not Walls; CFP Alignment With CFAs, CPAs, CPWAs Is In Consumers’ Best Interest Hot

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It was a mistake for NAPFA, which has always set a high standard for excellence in the advisory profession, to declare that it would no longer accept anyone but CFPs as members.
 
In a story last week, I said the net effect of the change in NAPFA’s membership requirement is to no longer accept the CPA/PFSs as members unless they challenged the CFP exam. I was wrong. It’s bigger than that.
 
NAPFA has long required members hold a CFP or challenge the CFP exam to qualify as NAPFA-Registered Financial Advisors. Thus, CFAs, CPAs, CPWAs, CIMAs, ChFCs, CLUs, and Ph.Ds in business or economics as well as licensed attorneys and others must challenge the CFP exam to become CFPs to gain NAPFA membership. But is such a policy in the best interest of consumers?
 
If NAPFA were solely concerned creating a brand that’s differentiated, it would justify making CFP certification a condition of membership. But NAPFA’s concern has always been serving a consumer’s best interest.
 
Not only is it narrow-minded to think that only CFPs are qualified to be wealth managers, it narrows the market of those qualified to advise on wealth matters, and not in a way that benefits consumers.
 
NAPFA Registered Advisors are already differentiated by their fiduciary pledge and fee-only status. Those are crucial differentiators that benefit consumers. Adding the CFP requirement is counterproductive.
 
To gain credibility with the public as a profession, CFPs must be aligned with similar designations, not at odds with them. CPA/PFSs are already considered professionals because they were CPAs before they were financial planners. If you accept that CPAs are professionals, why not embrace their status and join with them?
 
CFAs are another obvious choice for inclusion in any group promoting professionalism among private wealth advisors, financial planners, and investment advisors. CFA Institute is global, and half of its 100,00 Charterholders are in the U.S. CFA Institute administers the Global Investment Performance Standards (GIPS), a recognized standard-setting body for measuring investment advisor performance. The CFA curriculum provides a comprehensive framework for investment decision making. The three-level CFA exam tests proficiency in ethical and professional standards, fixed-income and equity analysis, alternative and derivative investments, economics, financial reporting standards, portfolio management, and wealth planning. And CFA Institute’s fastest growing membership segment is its private wealth advice section.
 
This past weekend, while writing a story honoring Sheryl Rowling for her contribution to RIA practice management for designing a more affordable rebalancing tool optimized for tax efficiency, it occurred to me that Rowling is a CPA/PFS designee. Why would a professional membership association for financial advisors erect barriers to her becoming a member?
 
If you would like to see investment fiduciaries regulated separately and recognized as a profession, a way to make that happen is for CFPs to align with CPAs, CFAs, CIMAs, CPWAs, and others — not exclude them.  For CFPs to be regarded as professionals, the NAPFA and Financial Planning Coalition should build bridges, not walls, between CPA/PFSs, CFAs, other credible professional designations. That will best serve the public and the profession.

 

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