Kevin Keller celebrated his first year as CEO of the CFP Board of Standards on May 1, 2008. During Keller's first year on the job, the CFP Board uprooted itself from Denver and moved its headquarters to Washington so that it could "play a more active role" in directing policymaking, he says. How's that move panning out? "It's going quite well," he says. Since moving to Washington, Keller points out that "we have hired a top-notch management team and re-staffed the organization. That almost seems like a nonevent, but it was certainly an important accomplishment for the last year. We have weighed in on a number of public policy initiatives, specifically working with NASAA and the Senate Special Committee on Aging on this senior credential issue."
Another accomplishment, he notes, was issuing the CFP Board's new Standards of Professional Conduct, which will become effective July 1. The CFP Board has "also established a new Council on Education to help advise the staff on standards for our registered programs, continuing education programs, and our review course providers."
So what's on tap for year two? Keller says his second year and beyond will focus on "telling our story and telling the story of the value of CFP certification to the general public." But he also plans to open the lines of communication between the CFP Board and CFPs--promising an announcement along these lines in June. "I think there is an opportunity for us to reach out more to the certificant community to hear what's on their minds," he says. "The opportunity exists to build better two-way communication channels than currently exists." His second year will also be filled with "building and announcing a public policy council (made up primarily of CFPs) to help advise the staff on the public policy initiatives that we're considering."
Keller talked with Washington Bureau Chief Melanie Waddell in a telephone conversation May 2 about the Board's accomplishments over the past year, the new ethical standards, the recent tumult at the Board's Disciplinary and Ethics Commission (DEC), and the challenges he sees for CFPs and advisors.
May 1 was your first anniversary as CEO of the CFP Board. What's been your greatest achievement, and the Board's, over the past year?
It's been a very short year, but one filled with a lot of challenges and we think a lot of accomplishments. If I had to pick one, it would be helping to position CFP Board to be poised for the future with the new strategic plan and the restatement of the organization's mission.
What does the new strategic plan accomplish?
The board articulated a mission, and while it may seem unusual that the organization didn't have a strategic plan, there had been a lack of focus. So the new mission is to benefit the public by granting the CFP certification and upholding it as the recognized standard of excellence for personal financial planning. Then the board articulated six core objectives in areas that it spelled out for our staff to pursue--there are no surprises, but clearly articulating our examination, education, enforcement, communications, advocacy, and sustainability.
Does this strategic plan include the Disciplinary and Ethics Commission area?
Not specifically, although enforcement is one of the pillars of the strategic plan. The board articulated a core objective in the enforcement area that very clearly sets out our role in the enforcement function of protecting the public's interest through rigorous and ongoing enforcement of our standards of professional conduct. The Disciplinary and Ethics Commission plays an important role in that enforcement process; after the staff conducts the investigations and prepares the cases, the DEC hears those cases. The [CFP Board] organization has been evolving for almost 30 years; what we did in the last year is accelerate the pace of change to address the real-world challenges.
Five of the nine members of the Discipline and Ethics Commission (DEC) resigned recently because you as CEO will now oversee the selection of members and the election process, not the volunteers who make up the DEC. Will the DEC remain a peer-to-peer body?
Our policies and requirements are that the DEC will always have a majority of certificants on the commission.
The DEC won't have to come to you to get approval of their decisions?
Not at all. That was never the case. There were really two or three items that they [DEC members] felt strongly about. One was the inclusion of public members in the hearing panels, and the board of directors had always contemplated that. I think for an organization whose mission it is to serve the public or to benefit the public, for the enforcement process to be seen as credible in the eyes of the public, it needs to have both a representation by the public but it also needs to be fair to certificants. It's just trying to provide a public point of view in that process.
How many public members would there be?
We've said the majority of commission members must be certificants. I would contemplate one or two public members serving on the nine-member commission as we go forward.
The revised Standards of Professional Conduct (which take effect July 1) key on the area of being a fiduciary. There is a big debate about when an advisor is working in a fiduciary capacity. CFPs are always working in a fiduciary capacity, correct?
They are held to a fiduciary standard in our new Standards of Professional Conduct when they are conducting financial planning, or as we say, material elements of financial planning.
Are you finding any challenges in growing the CFP mark--that's one of your mandates as CEO?
The mission is to benefit the public by granting the certification, and right now there are almost 58,000 certificants. That's not enough to serve the public, so in the context of making sure we're fulfilling that mission, growth is an important component.
That's 58,000 certificants out of a universe of how many advisors?
The number I hear is 500,000.
What do you see as the biggest challenge for CFPs/advisors now and going forward?
With $15 trillion in assets belonging to retiring baby boomers, at a time when confusion continues to run high over what's the difference between an investment advisor, broker/dealer, financial advisor, or CFP . . . is one of the challenges that we face. Some states are entertaining doing away with all financial related credentials regardless of their legitimacy--that's something that we will be watching out for. There's been some talk of that because of the issue of senior fraud. The threat is that a state would throw all credentials out because they suggest they are confusing to the public. The CFP Board has worked very closely with NASAA on its model legislation, which attempts to screen out some of these less reputable designations.
What are the regulatory issues or hurdles that the CFP Board will be taking on?
Certainly the Rand report is out in the public and my understanding is that staff is preparing recommendations; we're hearing it could be some time before those become public. The [Treasury] Blueprint, when you look at it closely, makes almost no mention of financial planning. It ignores the fact that financial planning exists.
Is that good or bad that the Blueprint doesn't mention financial planning?
We're looking at it from a public policy standpoint; we're still evaluating whether we should be working to raise that visability and evaluate whether it's better to let it go unmentioned.
Washington Bureau Chief Melanie Waddell can be reached at firstname.lastname@example.org.