Well, the CFP Board finally made its move. Last Friday, the Board-led Coalition for Financial Planning unveiled what it’s named “The Financial Planners Act of 2010.”
This “Act” will be presented as an amendment to the Senate’s version of financial services reregulation by Sen. Herb Kohl (D-WI), who sits on Senator Dodd’s Banking Committee. Apparently, Senator Kohl will introduce his amendment during the Dodd bill’s mark up period, at which time it will be approved or rejected by the full committee.
Senator Dodd is scheduled to present his Bill to the Banking Committee on March 15, 2010 (sans the FP Act of 2010), but over the prior weekend, leading Republicans suggested he delay the introduction to take one more stab at a bipartisan bill, so the timing is unclear.
While I’ve barely had time to read through the lengthy FP Act, a couple of items stand out. First, the Act establishes “registered financial planners,” which would be registered by one or more “financial planning oversight boards.” It calls for the SEC to take applications for these FP oversight Boards within the year following enactment of the Act, and to designate at least one such “Oversight Board” before the year is out.
Acceptable candidates for such a Board are limited to “having a mission to protect… consumers,” “experience in overseeing financial planners,” and cannot be “a membership organization” nor “an association of brokers and dealers registered under the SEC.”
So, the CFP Board has attempted to eliminate potential competitors for “Financial Planning Oversight Board” such as the FPA and NAPFA, as well as the leading contender, FINRA. Curiously, it didn’t rule out the American College with its ChFC designation. Apparently, in its zeal to grab control of all things financial planning, the Board is not prepared to throw down with the powerful insurance lobby.