Trade Associations
NAPFA Must Do The Right Thing With CPA/PFSs If It Wants To Retain Its Special Role As An Advocate For Consumers edit
Saturday, February 08, 2014 19:15


It's been over a year since the National Association of Personal Financial Advisors (NAPFA) decided to accept as new members only those holding the Certified Financial PlannerTM (CFP®) designation. I was not happy, to say the least, about this decision and need to get this off my chest.
As a CPA/PFS (Personal Financial Specialist), I thought I would adjust to the new rules, especially since my membership in NAPFA was grandfathered, thus, allowing me to retain my NAPFA membership.  After attending the AICPA's Advanced Personal Financial Planning Conference a couple of weeks ago, however, my unhappiness with NAPFA’s decision came to the surface once again.

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Why is NAPFA — a group I respect and care about so much — saying that only a single designation, the CFP, is acceptable for membership? According to the original press release, the NAPFA National Board made this decision to minimize public "confusion" and build "consumer confidence." Why CFP®? According to NAPFA Chair Lauren Locker (who is, coincidentally, a CFP®), "the CFP® designation hits the mark as a strong, baseline standard.” 
Really? A baseline standard? What does that mean? I think it means that NAPFA is against recognizing a higher standard because of its alliance with the CFP Board and the fact that there are greater numbers of CFP® holders than PFS designees.
Notably, NAPFA’s brief press release cited the relationship between NAPFA and the CFP Board several times. "NAPFA and the CFP Board have a long history of collaboration ..." "NAPFA has been a strong strategic partner with the CFP Board." Did the AICPA not adequately ingratiate itself to the NAPFA Board?
The sheer number of CFP® members of NAPFA made this decision easy to push through. During a merely two-week comment period, "responses were overwhelmingly in favor of supporting the CFP® designation as the baseline educational standard for NAPFA-Registered Financial Advisor membership."  (Again, the word baseline!)
But NAPFA members should have known better. These practitioners, who have long been considered the conscience of the financial advice business and who have become quite good as marketing themselves on that basis, should have asked themselves whether they are doing the right thing by breaking with NAPFA’s longstanding policy of treating CPA/PFS designees the same as CFPs.
For NAPFA, a group that has set itself apart from the rest of the financial advisor industry by supporting consumers, the decision to no longer accord CPA/PFSs the professional respect theys deserve, is more than just a slight, a display of badd manners. It is a betrayal of the public trust. It diminishes NAPFA. After all, why would NAPFA members want distance themselves from a financial planning designation with more stringent requirements than imposed on CFPs®?
Requirements Of NAPFA Members Versus CPA/PFSs
Must hold CFP® designation
Must be a CPA prior to becoming PFS
Must have a bachelor's degree
Must have a bachelor's degree + 1 year
Courses in PFP or equivalent knowledge
Courses in NINE PFP areas; minimum of 75 hours
Pass CFP® exam
Pass CPA & PFS or CFP® or ChFC exams
Three years if experience (or two as apprentice)
One year as CPA plus two years in 9 PFP areas
Ethics requirements & pass ethics exam
Ethics requirements & pass ethics exam
Renewal education 30 hours over two years
PFS renewal education 60 hours over three years plus CPA renewal education requirement of 80 hours over two years
According to NAPFA's website, "NAPFA's requirements exceed those of any other financial industry association." But as you can see from the chart above, it’s just plain untrue!
NAPFA is such a great organization in so many ways, and I respect its members so very much. That’s why I waited a year to say anything. I wanted to give it time to see if I would come to understand the decision. Then, attending the recent AICPA PFP conference stirred me to go public with my views because I care about NAPFA and would like to see my colleagues there reverse this policy. 
If NAPFA wants to continue to have the public’s trust, which it has earned for doing the right thing for so many years, it must always do what’s right for consumers.
CPA/PFSs hold themselves to the highest ethical and professional standards. It is wrong to discriminate against us just because some of us choose not to give the CFP Board money only to add more letters to our titles.


CFA Level 1 Exam Prep Now Being Offered By The American College, Reflecting The Growing Popularity Of The CFA Designation edit
Monday, December 02, 2013 13:16

Tags: CFA | CFP Board | profession

If you're interested in completing the CFA Level 1 Exam, you can now study online 24/7 through The American College’s prep site. Level II and III packages will be available in the fall of 2014.

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This is an interesting move by The American College OF Financial Services, which is the nation’s largest non-profit educational institution devoted to financial services. The College, which was founded in 1927, is best known to financial planners for awarding the CLU, ChFC, and other professional designations popular in the insurance segment of the financial advice market. But The College also offers educational prep courses for the CFP exam. Its foray into the CFA field reflects the growing popularity of the CFA exam in the financial advice industry.


“The College entered the CFA market just three weeks ago, and already, the program has garnered interest from candidates in all 50 states,” according to Dr. Larry Barton, President of The College.  “For many years, those studying for the CFA had only a few options for exam prep. The time for monopolies has ended, and as the largest non-profit College devoted to financial professionals, we spent thousands of hours to create a seamless study protocol leading to exam success,” Barton adds. offers CFA candidates an interactive dashboard with progress and performance statistics, video solutions for application exercises, live webinar classes, and extensive interaction with instructors and peers. Candidates can e sign up for a free trial without any commitment to purchase. 
The College’s CFA package leverages eBooks, video, printed materials and mentor support for the Level I June exam. The program offers both self-study and instructor-led options and a free trial for any candidate who wants to access the first two study sessions, according to Linda Need, CFA, Vice Chair of the College’s Board of Trustees and SVP, Managing Director at Wells Fargo Advisors, LLC.
The College says 17 subject matter experts created the  program with a focus on what candidates really need to succeed.  “Time management is critical in preparing for CFA® exams, and a personalized analytics dashboard will help candidates stay on track,” says Barton.



Charles J. Yang, CFA, Elected Chair Of CFA Institute Board Of Governors edit
Wednesday, July 17, 2013 10:45

Tags: CFA | competitors | profession

Charles J. Yang, CFA, has been elected the new chair of the Board of Governors of CFA Institute, the global association of investment professionals. Effective Sept. 1, Yang succeeds Alan M. Meder, CFA, who will continue to serve on the Board as immediate past chair. A new board lineup was elected by the membership at the CFA Institute 66th Annual Conference in May.


CFA Institute represents a competitor to the CFP mark and is growing fast. CFA Institute says it has more than 117,000 members in 137 countries and territories, including 109,000 CFA charterholders, about half of whom as in the U.S. CFA Institute brands itseld as "a champion for ethical behavior in investment markets and a respected source of knowledge in the global financial community." CFAI says its goal is "to create an environment where investors’ interests come first, markets function at their best, and economies grow."

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Yang is the chief investment officer of T&D Asset Management, a wholly owned asset management subsidiary of T&D Holdings Inc., the holding company of the fifth-largest life insurance group in Japan. He began his career as a quantitative analyst at the asset management division of J.P. Morgan and served as a portfolio manager in New York City and Tokyo. Yang is a member of two CFA societies, CFA Society Hawaii and CFA Society Japan.


The 18-member board of governors represents 11 countries: Australia, Canada, China, India, Japan, Singapore, Switzerland, Turkey, United Arab Emirates, United Kingdom, and United States. Each governor is elected by the CFA Institute membership for a three-year term that runs from Sept. 1 to Aug. 31.
  • Charles J. Yang, CFA (Japan) - chief investment officer, T&D Asset Management Company, Ltd.
  • Aaron Low, CFA (Singapore) – principal, Lumen Advisors
  • Alan M. Meder, CFA (United States) - senior vice president and chief risk officer, Duff & Phelps Investment Management Co.
  • Saeed M. Al-Hajeri, CFA (United Arab Emirates) - head of Emerging Markets Department, Abu Dhabi Investment Authority
  • Giuseppe Ballocchi, CFA (Switzerland) - head of Financial Engineering and Risk Analytics of the Trading Division, Pictet & Cie
  • Heather Brilliant*, CFA (United States) - global director of Equity and Credit Research and chief equities strategist, Morningstar, Inc.
  • Beth Hamilton-Keen, CFA (Canada) - director of Private Client Portfolio Management, Mawer Investment Management Ltd.
  • Robert Jenkins*, FSIP (United Kingdom) – a senior adviser to CVC Capital Partners; a nonexecutive director for the Aberdeen All Asia Investment Trust; and adjunct professor at London Business School
  • James G. Jones, CFA (United States) - founder and president of Sterling Investment Advisors, LLC
  • Attila Koksal, CFA (Turkey) - managing partner, Standard Unlu Securities
  • Mark Lazberger, CFA (Australia) – CEO, Colonial First State Global Asset Management (CFSGAM) and First State Investments
  • Frederic P. Lebel, CFA (Switzerland) - co-CEO and CIO of OFI MGA; CIO and owner of HFS Hedge Fund Selection S.A.
  • Colin McLean, FSIP (United Kingdom) – CEO, SVM Asset Management Ltd
  • John D. Rogers, CFA (United States) – president and CEO, CFA Institute
  • Matthew H. Scanlan, CFA (United States) - CEO of RS Investments; president and trustee of the RS Investment Trust and RS Variable Products Trust
  • Jane Shao, CFA (China) - founder and director, Lumiere Pavilions
  • Sunil Singhania*, CFA (India) - chief investment officer, Equity Investments, Reliance Capital Asset Management Ltd
  • Roger Urwin (United Kingdom) - global head of Investment Content, Towers Watson

NAPFA, In Saying Only CFPs Can Become Members, Snubbed The AICPA, Exposing Fractures In The Movement To Professionalize edit
Monday, December 10, 2012 12:55

The American Institute of CPAs, in a letter emailed to its financial advisor members last Friday, shrugged off an announcement earlier week by the National Association Of Personal Financial Advisors to accept only CFPs as NAPFA members.

As the professional home for CPA financial planners, the AICPA stands behind our members and the qualifications and expertise they bring to supporting their clients,” said the email to AICPA Personal Financial Planning (PFP) Section Members & CPA/PFS credential holders.

AICPA’s response to NAPFA was muted, considering that NAPFA had snubbed AICPA just a few days earlier.

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NAPFA, an association of fee-only financial planners, in a press release Tuesday announced that after December 31, 2012, only CFPs would qualify as members.


“The NAPFA National Board recognized the need to support the emerging profession of financial planning by rallying around a singular professional designation in the same way the public trusts that those holding a CPA, MD, or JD are meeting education, training, and ethics requirements,” NAPFA said in explaining its action.


NAPFA’s decision certainly did not single out any designation for exclusion from membership and its move attracted little coverage in the trade press. However, the effect of NAPFA’s decision was to toss out a single credential that had been accorded special status by NAPFA: The CPA/PFS designation awarded by the American Institute of CPAs.  


Until now, NAPFA’s specialized education requirement accepted CPA/PFSs as well as CFPs for NAPFA membership. The CPA/PFS, in fact, had been the only designation other than the CFP that qualified an advisor for NAPFA membership. Put another way, there are seven professional credentials that can be accredited as CFPs by challenging the CFP Certification Examination, and thus become eligible for NAPFA membership. CPA/PFSs until now were exempt from challenging the CFP exam in order to qualify for NAPFA membership. AICPA is in good company, however.


Despite its 109,000 Charterholders worldwide, CFA Institute is placed in the same category as CPA/PFSs. CFA Charterholders, too, must challenge the CFP exam to be licensed as CFPs and accepted as NAPFA-Registered Advisors. In fact, the following credentials do not qualify for NAPFA membership without challenging the CFP exam:

  • Ph.D.s in business or economics
  • Doctor of Business Administration
  • Licensed attorney
  • Licensed Certified Public Accountant (CPA)
  • Chartered Financial Consultant (ChFC)
  • Chartered Life Underwriter (CLU)
  • CFP certification from the Financial Planning Standards Board Ltd. (FPSB)

(Conspicuously absent from this list are about 8,000 professionals who hold credentials administered by the Investment Management Consultants Association (IMCA), another credentialing body in the financial advisor profession.)


All the credentials listed above have long been required by NAPFA to prove their professional qualifications by challenging the CFP exam. Only AICPA’s CPA/PFS holders were directly affected by last week’s decision to remove their special treatment by NAPFA.


NAPFA said it made the decision to only allow CFPs as full members because the CFP designation “best represents financial planning professional standards.”


“The NAPFA National Board recognized the need to support the emerging profession of financial planning by rallying around a singular professional designation in the same way the public trusts that those holding a CPA, MD, or JD are meeting education, training, and ethics requirements,” NAPFA said in a press release this past Tuesday. “NAPFA’s decision can be viewed as an important consumer issue in an environment where the public is bombarded by an alphabet soup of designations that only professionals can be expected to understand.”


To NAPFA’s supporters and members, the decision to only accept CFPs as members without a challenge exam represents just the latest step in the association’s long history of trying to do what’s best for consumers. NAPFA’s brand is associated with many of the best ethical and professional practices in the profession. Lining up behind the CFP in an effort to create a single designation for financial advice professionals can be seen as a sincere effort by NAPFA to aid consumers.  But how realistic is that?


NAPFA has 2,447 members, but that includes academic and financial service affiliates as well as retirees who are “sustaining members,” and provisional members—students who intend to become NAPFA-Registered members. NAPFA Registered Advisors—professional members—must accept a “fiduciary oath,” not accept sales commissions, meet continuing education requirements, possess at least three years of experience and submit to peer review of a financial plan. (You may submit your own work product for the plan, or work you supervised.) Currently, there are 1,500 NAPFA-Registered Financial Advisors.


In contrast, AICPA, has 360,000 CPA members and its PFP Section has 5,000 members. The Institute has accredited 4,500 CPA financial planners with the Personal Financial Specialist (PFS) designation, three times the number of NAPFA professionals. AICPA is a key stakeholder in the movement to make financial planning a profession.


NAPFA’s decision to force CPA/PFSs to challenge the CFP exam to gain full membership starting next year exposes the fragmented interests of groups trying to make a profession of the financial advisor business. In backing CFP Board, NAPFA is in the unenviable position of aligning with a credentialing body that is out of step with NAPFA’s commitment to the fiduciary movement. While CFP Board and NAPFA together posture publicly about their commitment to establish a single fiduciary standard based on the Investment Advisers Act of 1940, CFP Board’s Rules of Professional Conduct say a CFP does not owe a client a fiduciary duty when performing single-subject engagements, such as retirement planning, college planning or estate planning, as reported here two months ago. So NAPFA, in backing the CFP designation, is aligning with an accrediting body that does not share its high standards.


What do you think? Is NAPFA serving consumers well by supporting the CFP designation as the premier credential for financial advisors? Would a broad coalition of CFP Board, CFA Institute, AICPA, IMCA, and other professional licensing bodies serve consumers better?  


IMCA Sets Out To Define “Wealth Management” But Critics And Competitors Take Issue With The Definition edit
Monday, November 12, 2012 12:05

Tags: CFA | IMCA

The Investment Management Consultants Association (IMCA) last week planted a stake in the ground and defined - for what it says is the first time ever - private wealth advice or wealth management for the financial services industry.

IMCA, which is a nonprofit professional association and credentialing organization with more than 8,700 individual members, also released a white paper detailing the findings of a comprehensive job analysis that defines the practice of wealth management.

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“This job analysis clearly defines wealth management as a distinct practice of advising high-net-worth clients with specialized expertise and skills,” Sean R. Walters, CAE, executive director and CEO at IMCA said in a release “Financial advisors without this knowledge who work with affluent clients are doing them a disservice.”

Highlights from IMCA’s wealth management job analysis and the executive summary white paper, “Defining Wealth Management, Serving High-Net-Worth Clients with a Distinct Body of Knowledge,” include the following:

  • Wealth management is a distinct practice. Advanced competency in this discipline may be practiced by financial planners, accountants, estate planning attorneys, or investment professionals.
  • $5 million is the minimum net worth a client must possess to be considered a high-net-worth client.
  • The knowledge required to provide competent wealth management incorporates 169 topics within four knowledge domains: human dynamics, wealth management strategies, client specialization, and legacy planning.
  • The fundamental tasks and the process that private wealth advisors use in working with clients may be similar to financial planning—and many other client-oriented professions—but an advanced and unique set of knowledge and skills is needed to effectively serve high-net-worth clients

Advisers, meanwhile, had mixed reaction to IMCA’s definition of wealth management.

Some IMCA members expressed full support. “I am in complete agreement with Sean Walters and the findings of the study,” says Brian Ullsperger, CIMA, AIF of WTAS LLC.  “I am of the strong belief that true wealth management is a comprehensive, integrated and ongoing process that blends investment, tax and estate planning into a cohesive strategy to achieve an individual’s or more often a family's goals over multiple generations.  This requires a broad array of skills and ongoing training.  The CPWA certification provides the foundation for an advisor to develop the knowledge required to build a wealth management practice.”

Richard Rosso, MS, CFP, CIMA, a senior financial advisor with Clarityfinancial, also expressed support."There needs to be a clearer definition, or path to understanding the needs of the wealthy and IMCA in my opinion, is well-equipped to forge the way," he says.  "I believe increasing external change will affect this segment more than any other group going forward, especially on the tax and legacy-planning front so this structure will be necessary."


What's more, Rosso said IMCA will be able to further identify and clarify the process of advising the wealthy. "Segmenting into the four knowledge domains will be very effective," he says. "Understanding the human dynamics of the wealthy and their families and to sharpen the skills needed to spur dialogue among family members will be crucial guidance required by today’s advisor. Enhanced EQ skills will be required."


For his part, Rosso says he does financial planning “plus,” for affluent investors. "You begin with the basics and then move into areas of specialization like stock option exercise strategies, legacy/gifting implementation,  retirement income withdrawal maximization and the unique behavioral threads that tie all this together," he says.  "For IMCA to create a formal direction with a robust body of knowledge would be welcomed."

Meanwhile, others say IMCA's findings are convenient and self-serving.

“It appears to me that IMCA has conveniently drawn the line of what makes a high-net worth client at the point of the current estate tax exemption,” says Chris Lipper, CFP, CIMA, president and chief investment officer at CPF Texas.

“If the exemption drops to $3.5 million or $1 million next year, will that be the new point of demarcation?” ask Lipper, who for the record holds the other designation administered by IMCA, the CIMA.

Lipper agrees that estate and legacy planning requires a higher level of competency. “However, as a CFP certificant, and more importantly, with almost 18 years of experience working with high net worth clients, I have the expertise,” Lipper says. “Holding the CPWA designation does not bring instant qualification, nor do those without the designation lack expertise.”

Others also took issue with IMCA’s findings.

For instance, Stephen Horan, Ph.D., CFA, CIPM, who is head of university relations and private wealth at CFA Institute, says the study’s methodology and interpretation are curious.  “The process of removing advisors with clients less than $1 million and then concluding from the analysis that wealth management is the practice of serving clients with more than $5 million is tautological,” Horan says.  “The investigator effective determines their conclusion by the design of the study.  Despite the design bias, fully a third of respondents, put the minimum below $5 million.”

Horan also says the origin of the 43,000 financial professionals to whom the survey was sent is unclear.  “So, it is difficult to interpret the results without understanding the characteristics of the population to whom the survey was sent,” Horan says. 

Plus, Horan notes that the 400 responses, which was filtered down to 250, represent a response rate of less than 1% and weaken the validity of the report’s conclusions.

And Horan says the firm-type of the respondents does not reflect the industry.  “It is heavily weighted toward brokerage and private banks and less on independent RIAs, which are growing in significance,” he says.

Horan also says the comparative analysis in Tables 1 and 2 (see below) list topics in the CPWA not covered in other most other programs, but does not list those programs.  “The CFA program was apparently not included because it, for example, covers tax-aware investing, asset-protection strategies, advance stock option planning and strategies, endowments and foundations, and legacy planning,” Horan says. 

Says Horan: “I’ve performed a detailed comparative analysis of the CPWA program with other credentials.  The CPWA has no coverage of economics, financial statement analysis, equity valuation, or fixed income valuation according to its website. Its coverage of derivatives is cursory compared to the CFA program.”


By way of background, the CFA Program – according to its website – is a “globally recognized, graduate-level curriculum that provides a strong foundation of real-world investment analysis and portfolio management skills along with the practical knowledge you need in today’s investment industry.” 

In sum, Horan says IMCA’s study does help focus attention on the complexity and diversify of wealth management, but it is ultimately “ill-designed, superficial, erroneous, and self-serving.”

For its part, IMCA said in its release that, in addition to clarifying what constitutes a private wealth advisor, it will use the analysis to refine the experience, education, examination, and ethics requirements of its CPWA certification program. The organization, who members collectively manage more than $1.6 trillion on behalf of 1.3 million clients, has administered the CPWA certification since 2007, and the program was operated as a certificate program since 2004.

IMCA said in its release that the procedures used in the job analysis study complied with all relevant technical and legal standards for professional certification and licensure as well as the requirements for accreditation by the National Commission for Certifying Agencies (NCCA) and the American National Standards Institute (ANSI).

In response to critics, Walters said IMCA didn’t conduct the analysis to be self-serving. "We facilitated a process to codify the body of knowledge and skills necessary for competent performance of “wealth management” as defined by practitioners in the field," he says. "The job analysis process is a best practice for certifications, and a requirement to be accredited under ALL third-party personnel certification standards. Every valid certification body, regardless of industry, defines the body of knowledge required for a certification using this process. When a designation program purports to define a body of knowledge using the intellectual property of an individual or a handful of academics, it is not a legitimate certification program and should not be treated as such.”

By way of history, the financial planning industry has for years been trying to define financial planning with some success. In 2011, after two years of work, major firms affiliated with the FPA developed this definition: “Financial planning is the process of developing a strategy or program to assist in the achievement of at least one financial goal or need. The process starts by gathering and analyzing relevant financial data, client values and goals, and it results in an action plan or recommendations, including acknowledgement of other financial issues that may deserve attention.”

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