From the June 2010 issue of Investment Advisor • Subscribe!

FPA, Coalition for Financial Planning Remain Upbeat

Despite uncertainty over fiduciary standard, optimism reigns within planner groups

"People on the Hill know what financial planning is now," says Tom Potts, president of the Financial Planning Association (FPA), and while it may "take a while" to get everything that financial planners want in Washington, "we're laying the foundation for the future." Potts was speaking in San Antonio on April 23, during the annual FPA retreat, where he and the leaders of the other organizations in the Coalition for Financial Planning presented a status report to attendees on the Coalition's efforts in Washington.

One of those groups is the Certified Financial Planner Board of Standards, whose board's immediate past director, Marilyn Capelli Dimitroff, said during the session that "all of our organizations are so committed to establishing financial planning as a profession" to the point that "we've drafted a Financial Planners Act of 2010." While admitting that "our chances are slim" of getting the Coalition's needs met this time, referring specifically to the current text of Senator Chris Dodd's financial services reform bill--which was still being debated as of press time in the middle of May--she stressed that "Herb Kohl is our champion," referring to the Democratic senator from Wisconsin, and that he will "offer his amendment when it's appropriate" during debate on the Dodd bill. That amendment was to have created an independent oversight board to regulate financial planners; during markup of the bill in the Senate Banking Committee in late March, the language was changed to call instead for a General Accounting Office study of the regulation of financial planners.

Growth in the FPA's Ranks

The FPA, the largest association of planners in the country with some 29,000 members, is celebrating its 10th year of existence in 2010 by seeking to strengthen the group internally, while flexing its newfound lobbying muscles in Washington. FPA Chairman Richard Salmen reported at a Town Hall meeting during the FPA Retreat that the membership drop that occurred concomitant with the markets and economic crisis has not only stopped but is being reversed, though he also said "we're going to have to be proactive in reaching out to membership," doing "a better job at being a national organization, working together so the whole is greater than the sum of its parts." FPA President-Elect Marty Kurtz said in a separate interview that when he becomes president, his priorities in the new year are to focus on the individual communities of interest within FPA. "Our world view is shaped by our individual communities," Kurtz admitted, but suggested that the group's diversity was also a strength.

Commenting on the FPA's push to have financial planning defined as a profession within the Dodd financial services reform bill, the plain-speaking Kurtz acknowledged that "we're the only profession in the world that is demanding to be regulated by the government" but argued that doing so will not only benefit planners, but will protect clients as well by assuring that everyone who offers financial advice to individuals is playing by the same set of rules; that "clients will understand that they will get transparency and full disclosure. That's why we're doing it."

At the Town Hall meeting, FPA CEO Marv Tuttle responded to a question on whether the group's residency program--a victim of budget cuts in 2009--would be restored by saying there would be such a program this year, in the last week of October in Lake Arrowhead, California, at the University of California at Irvine.

Finally, Mark Johannesen, the former FPA president who runs the FPA's political action committee, called for more group members to contribute to the PAC, pointing out that "it's the only financial planning PAC there is."

Marv Tuttle, CEO of the FPA, said there were 360 planners attending the FPA's Retreat this year compared to 297 attendees in 2009. Tuttle said attendance was good as well at the group's Business Solutions practice management conference held in Dallas in early March.

While Tuttle said that some previous, pre-financial-crisis Retreats attracted more than 400 planners, he expressed great satisfaction with this year's numbers, as did Marty Kurtz, the recently named president-elect of the largest planners' association, suggesting that not only was there a pent-up desire among planners for education and networking, but also to do so in a relaxed atmosphere.

The attendance increase at major planner conferences seemed to begin most obviously with TD Ameritrade's annual conference in February in Orlando, where the RIA custodian reported record total attendance of 2,000, including 1,200 planners. The major advisor conferences in fall 2009 had mixed attendance results: Schwab Advisor Services' annual Impact conference for its affiliated RIAs had about the same number of attendees as the previous year, while attendance at the FPA national conference was down from 2008.

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