CFP Board Responds To Questions About NAPFA's Decision To Require CFP For Membership, But Continues To Ignore Questions About Its Consumer Disclosures For CFPs Affiliated With A BD And Acting As Fiduciary Hot

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CFP Board, a not for profit organization chartered to "benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning," took longer than a month to respond to the questions, which were emailed to its spokesman December 10, 2012.


While the holidays undoubtedly delayed CFP Board's response, CFP Board's answers are important in clarifying its vision of how to elevate the CFPs to professional status. Moreover, CFP Board has previously ignored questions from Advisors4Advisors about its consumer disclosures for CFP fiduciaries who are affiliated with broker dealers.

In bold below are the questions followed by CFP Board's response.


Regarding the announcement by NAPFA this past Tuesday about allowing only CFPs to become full members in the future. What’s CFP Board ’s stance on this issue?

We are partners with NAPFA. We applaud both them and the Financial Planning Association (FPA) for their CFP® designation-focus. NAPFA has been a strong strategic partner with CFP Board in advocating policies in support of competent and ethical financial planning. NAPFA’s endorsement of the CFP® certification as the standard for financial planning will provide consumers with a clear, strong and unified message.


NAPFA and CFP Board believe that Americans must have access to competent and ethical financial planning services and the CFP® certification continues to be recognized as the standard for the financial planning profession. We value this strong relationship with NAPFA and look forward to working with them in the years to come.


How does the CFP designation compare with other designations for financial advisors, like the CPA/PFS, CFA, CPWA designation?

Consumers need clarity around finding a competent and ethical financial planner. The Certified Financial Planner certification can provide this clarity and assurance to the public that their financial planner is competent and ethical.


In addition to meeting rigorous education, examination and ethical requirements, our more than 67,000 CFP® professionals are required to adhere to a fiduciary standard when delivering financial planning services. At the same time, we are business and compensation model neutral – and our CFP® professionals come from a variety of backgrounds and professions, including insurance, brokerage and investment advisory.


We strongly enforce our own CFP® designation, adhere to a fiduciary standard when providing financial planning services and we encourage regulators to do the same and ensure consumers are informed of what designations are legitimate and which ones are not.


Would CFP Board support an effort by the AICPA, CFA Institute, IMCA, and other professional designation bodies to seek regulation by the Consumer Financial Protection Bureau? Are there any discussions along these lines? If not, why not? Wouldn’t it make sense?


Anyone can call themselves a financial planner. This is why we and our partners in the Financial Planning Coalition are actively seeking regulation of financial planners as a way to protect the public from those who use the term solely for personal financial gain and/or to mislead the public. And with more than 140 financial services certifications and designations on the market, there is great consumer confusion around the ‘alphabet soup’ of designations.


The proliferation of designations is being addressed by the Consumer Financial Protection Bureau (CFPB), which is required to submit to Congress and the SEC recommendations for addressing fraudulent and misleading use of certifications and designations. CFP Board recently made several recommendations to the CFPB to address this issue, including the establishment of a ratings system for senior-oriented financial services designations.


CFP Board, NAPFA and FPA are working together to ensure that the CFP® designation is the standard of excellence for ethical and competent financial planning with CFP® professionals uniquely qualified to tie a person’s entire financial life together.


Is a CFP the best designation for an advisor to get if she intends to manage the financial affairs of ultra-high-net worth individuals with $5 million or more?

CFP® professionals are best prepared to provide comprehensive financial planning to their clients-including those of high or ultra high net worth. The required education and exam prepare a CFP® professional to provide advice across all the areas in which a client, regardless of net worth, would need financial planning assistance. The issues of insurance, estate planning, taxation, investments, along with the synthesis of pulling all of these different areas together with an oral and written communication focus make this an ideal designation to prepare individuals to serve the needs of a diverse population – including high net worth individuals.


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