At the time of this writing, despite my inquiries, the Financial Planning Association has neither confirmed nor denied recent reports in the media that its membership has fallen 15% percent over the past five years, and is currently falling at a net rate of some 600 members a year. So I’m going to assume those reports are true. Which means, to my mind at least, the FPA deserves a bag of kudos and a standing ovation from the financial planning community.
No, I’m not usually a less-is-more kind of guy, but in this instance, that does seem to be the case. In recent years, as the securities industry, financial consumers and the media have slowly, but steadily, moved toward a profession of financial advice, the guiding light in the financial planning world has been the FPA. While the CFP Board has been trying to swell its ranks of CFPs at seemingly all costs (provided those costs are born by current CFPs), the FPA has been steadily defining what a profession of financial planners would look like.
Some, like Andy Gluck recently wrote, have attributed the FPA’s “membership slide” to the group’s “bold positions that alienated some in its traditional membership base.” This is a reference to the FPA’s successful suit to stop the SEC from expanding the ‘40 Act broker exemption to the fee-based management of client portfolios; divesting itself of its broker/dealer division (which became the Financial Services Division, the FSI); its support of a fiduciary standard for brokers; and opposing FINRA as the self-regulatory organization responsible for RIAs. In addition to their 'boldness,' these are also all positions that advance the profession of financial advice. Despite its inexplicable partnering with the CFP Board (with NAPFA in forming the Financial Planning Coalition) in the debate over financial reregulation, it’s the FPA that is in the vanguard of creating a profession of financial planning.
One of the distinguishing characteristics of a profession is that it won’t be for everyone. I’m not talking about quotas here, or trade barriers to keep wages high; it’s simply that not everyone is willing to accept the high standard of a profession—especially in an industry like financial services where there’s still so much money to be made at the expense of the marks, er, I mean, clients.