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Financial Planning > Behavioral Finance

Mr. Keller Goes to Washington

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For 15 years or more, I’ve been trying to figure out what is wrong with CFP Board; why every few years they seem to come out of left field with some decision or initiative, why the CEO office has a revolving door, why competent, reasonable, intelligent industry leaders seem to get lobotomized when they go on the Board and why they don’t seem to get the whole let’s-create-a-profession thing. After toying with a number of theories including lead in the drinking water in Denver (which by the way would explain a lot of other industry mysteries as well) and under-the-table payoffs by the ICI, I’d finally concluded the Board was simply insular, out of touch, secretive, and had its own agenda, of which the rest of financial planning only occasionally caught a glimpse.

But no, it turns out the problem was really a fifth choice–none of the above– and was in fact so blatantly obvious as to shame those of us who purport to reflect on the state of the planning profession. The real trouble with the CFP Board is (drum roll…wait for it): That it’s been located in Denver. I know, it just makes you want to slap yourself in the forehead and mutter the immortal words of Roberto De Vicenzo after he was informed that he signed an incorrect scorecard to lose the 1968 Masters by one shot (“What a stupid I am”).

Now It Makes sense

What’s more, after finally recognizing the root cause of so many missteps, those poignant protectors of planning literally leapt into action, announcing on April 11, their intention to move to that incubator of clear thinking: Washington, D.C. The Board’s release went on to leave little room to doubt the wisdom of its move: “After careful study, the Board recently concluded that the future success of the organization was dependent upon its close proximity to regulators, policymakers, and other industry and credentialing organizations that influence debates within the industry.” The release went on to disclose that the details of the relocation would be handled by the deckchair rearranging department of the SS Titanic Moving Co., LLC.

One can only speculate on the connection between the relocation solution and the announcement of the hiring of Kevin Keller, as the new CEO, made only seven days later. Perhaps merely the notion of moving out of Denver cleared the Board’s synapses sufficiently to realize the folly of hiring Denver-based CEO Lou Garday to save on relocation expenses, and instead saved those costs by moving the organization to Keller in Washington.

On paper anyway, Keller appears to be the best of recent CEO choices. Of course, following a domineering autocrat, a REIT salesman, and a loony isn’t that hard an act to follow. Keller’s resume includes 16 years at the Association of Financial Professionals, the last seven of which as senior VP and COO. For those of you who aren’t familiar with the AFP, it’s an organization that provides professional certification, standards CE, and lobbying to 16,000 CFOs, treasurers, financial analysts, and cash managers at the country’s largest companies. Who better to head an organization of 50,000 financial planners whose job it is to protect their clients from the CFOs, treasurers, and financial analysts (among others) at some of the nation’s largest companies? At least he’ll know where some of the bodies are buried. I wonder if Jeffery Skilling was an AFP member?

I became a Kevin Keller fan when I read Board chair Karen Schaeffer’s explanation of why they hired him: “Kevin has a unique set of skills that will help keep CFP Board relevant and ensure the standards of the CFP marks.” Even though she failed to elaborate on just what those skills might be, I’m guessing X-ray vision, faster than a speeding locomotive, and able to leap tall buildings in a single bound. And I’m sure it’s purely a coincidence that the CEO of the AFP (and Keller’s former boss) sits on the CFP Board.

Now You really Sold me

But the closer for me came from Keller’s own assessment of the Board: “[The] CFP Board is a dynamic organization that has done great work. The CFP certification enjoys an excellent reputation among the public, those within the profession and the credentialing community, and I’m enthusiastic about the opportunity to build on the organization’s work in this regard.” With insight like that, what could go wrong?

Despite Keller’s obvious qualifications to sort out the mess at the CFP Board (much of which should resolve itself once they move into their new digs in the nation’s capital), I’d feel remiss if I didn’t do my part to shorten his learning curve by making a few humble suggestions regarding some issues upon which the Board might focus it’s newly attained enlightenment:

1) Belly up to the bar on the fiduciary thing, already. I’m sure the Board is tired of reading about it, and I have to admit to being pretty tired of writing about it. The SEC holds financial planners to be fiduciaries, brokerage firms are beginning to embrace a fiduciary duty for their brokers, the 4th Circuit Court ruled that brokers who take fees for financial advice are fiduciaries, and virtually every good financial planner I know understands that the single greatest differentiator between them and every financial salesman out there is their fiduciary duty to their clients. The Board’s self-proclaimed mission is to enable the public to “benefit from competent and ethical financial planning.” What could be a greater benefit than the legal duty to put one’s clients’ interests first?

2) Am I the only guy in America who doesn’t believe you can be a CFP and a registered rep or an insurance agent at the same time? Even though the Board evades using the “F” word, Rule 202 of the CFP Code of Ethics states: “A financial planning practitioner shall act in the interest of the client.” Yet, legally, who does a registered representative “represent?” And for whom is an insurance agent a legal agent? The answers, of course, are respectively, the broker/dealer or the insurance company they work for. So if you’re legally obligated to act in the interest of your employer, how can you be protecting the client’s interests? If it’s serious about creating a profession of financial planning that benefits the public, it’s time for the Board to resolve long-standing conflicts like this one.

3) Give up trying to introduce a Lite version of CFP every few years to attract Wall Street’s 300,000 stockbrokers. Let’s be clear about this: the CFP Board isn’t a business, and its job isn’t to build market share by watering down the mark so it will appeal to a wider audience. The CFP mark is light enough as it is. What the profession and the public really needs is a CFP Stout: with a fiduciary duty, compensation directly by the client, and economic independence from financial services companies. So if you don’t have the cojones to push for that, at least stop trying to undermine the extra pale version we currently have.

4) Stop acting as if you’re protecting the public from CFPs. It’s true that the original intent was to create a self-regulatory organization for financial planners (and the vast majority of CFPs today believe the Board is an SRO), but it’s really just a self-generating regulatory body. Still, the Board’s mission is to benefit the public through competent, ethical financial planning. So why all the public education about “financial planning” rather than about “certified financial planners?” There are plenty of places consumers can learn about personal finance: That’s not the Board’s mission. What people don’t hear is why CFPs are different, and how they would benefit by retaining one. And while you’re at it, did I mention you might beef up the differences between CFPS and sales folks?

5) And finally, please, please, please, just knock off the legalese. “Practioner,” “Licensee,” “Certificant,” “Designee.” I mean honestly. Where do you folks come up with this stuff? Makes having a CFP sound like a hunting license. How does “medical licensee” or “CPA certificant” strike you? Just plain CFP will do nicely, thank you very much. Oh, and put the THE back in the CFP Board. It sounds dumb when “FPA” does it; “CFP Board” is just plain silly.

Now that I think of it, maybe the lead-in-the-Denver-drinking-water-theory isn’t so far fetched after all.

Bob Clark, former editor of this magazine, surveys the advisory landscape from his home in Santa Fe, New Mexico. He can be reached at [email protected].


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