More On Legal & Compliancefrom The Advisor's Professional Library
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
- Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.
“I hear some people in the press might have questions about the CFP Board’s definition of fee-only and other compensation,” Michael Branham, FPA’s 2013 president, said to laughter during the Q&A portion of a lunchtime meeting on Sunday between the Financial Planning Association’s leadership and members of the press.
“Is the fee-only definition from the CFP Board practical?” Branham rhetorically asked. “After all, NAPFA’s and the CFP Board’s definitions conflict.”
He noted that FPA “supports the right” of the CFP Board to “do what they did” in disallowing certain planners from calling themselves fee-only, "but we agree with [CFP Board CEO] Kevin Keller's call for a broader conversation on the topic.”
Referencing another recent controversy involving the CFP Board, continuing education and the announcement in March that the board is thinking of becoming a CE provider, Branham said it would be as if “the referees start playing the game.”
“They set the rule and want to play,” he said. “We’re afraid it will hurt the reputation of the CFP mark, but we agree that the quality of continuing education must be high and must be maintained.”
He added that a continuing education task force will be convened, headed by FPA member Dan Moisand.
Responding to questions at the press conference, the CFP Board released a statement calling the FPA a “strong partner” of the Board, “working with us to advocate important policy positions.” On the CE issue, the statement says that the Board is “very well aware” of the FPA’s concerns, that “we fully heard all of FPA’s concerns” and that the CFP Board “has made no decision on the CE issue and it will not be considered” by the CFP Board’s Board of Directors “until its November meeting, at the earliest.”
In addition to the those controversies around the CFP Board, the FPA leadership at the press conference in Orlando at FPA Experience 2013 discussed major initiatives announced a day earlier during the conference’s kickoff presentation.
The first was the establishment of the FPA Research and Practice Institute to conduct original research to help planners with practice management.
“The evolution of the planning profession, the increasing nature of regulation, fast-paced growth in technology and increasing need to identify quality personnel can make it challenging to achieve the desired professional and business goals,” said Lauren Schadle, executive director and CEO of FPA. She added that the first release of the research will be a practice management study performed in collaboration with Advisor Impact, which surveyed 2,500 respondents.
The second was the announcement of a new website for the organization for both planners and the public. It will debut next month with a soft launch and will feature a personal dashboard for each FPA member.
“We’re made a significant investment in technology,” Schadle added, noting a virtual form of FPA Experience 2013 will be available to attendees of the live event for three months.
She added that since becoming CEO, she has been working hard to implement the organization’s strategic business plan, which focuses on four core services: professional education, business success, advocacy and community.
“I put a strong staff together to help me do it,” she noted.
“Many members of FPA have small shops,” Paul Auslander, FPA’s 2013 chairman, said. “We have the resources to help them create a profitable and successful business, which takes time. I’m constantly looking at how to do it better. The research we announced is cutting-edge.”
Noting his passion is advocacy, he said the FPA’s Florida chapter met with legislators in Tallahassee three weeks earlier, along with the Florida governor’s chief of staff. “When we go in they look up from their desks and say, ‘What do you want?’” Auslander said. “We say, 'We don't want anything.' We don’t want anything other than to educate them. We are a resource for legislators and we are proud of that in Florida. It’s now happening in other states as well.”
He said the organization has 23,000 members and 90 chapters.
Branham pointed to the growing international recognition of the need for financial planning, noting that he just returned from Moscow, where 80% of financial planners are women. He also said he spoke with planners in Japan, where financial planning is “alive and well.”
He also noted the effectiveness of the Coalition for Financial Planning, a collaborative advocacy effort among FPA, the National Association for Personal Financial Planning and the CFP Board of Standards.
“We have encouraged regulators to pass a uniform fiduciary standard and supported Rep. Maxine Waters, D-Calif., in her bill to raise the funding of the SEC to help them in their mission,” he said. “Between the three organizations there are 75,000 planners.”
2013 President-elect Janet Stanzak began her prepared remarks by noting the importance of supporting the CFP mark.
“Medicine has the MD; law has the JD and accounting has the CPA,” she argued. “We believe in rallying behind one mark, and that is the CFP.”
Check out more ThinkAdvisor coverage of FPA Experience 2013.