What’s in a Name? Should the FPA Consider a Facelift?

One of the drawbacks to the “blog,” as it emerges as a form of journalism is that it’s almost too short to say anything of real substance: It is essentially the Internet version of the sound bite. But its advantage is that, as many mothers have advised their daughters about men: “There’ll always be another one coming along soon.” For a writer, this offers a virtually unprecedented opportunity to think about what we’ve written, and when the inevitable “Gosh, I really wish I’d mentioned that!” hit’s us, to be able to do something about it. 

That’s a long lead in to say that as I was thinking about my last blog about the FPA and a profession of financial advice and realized that there’s another aspect to that issue which warrants further discussion. The conversations leading up to, during, and following the passage of the Dodd-Frank Act have significantly advanced the debate over the future of a financial advisory profession. Positions have been staked out, lines have been drawn and some casualties have been taken. One of those in the walking wounded category has been the financial planning community: a fact that shouldn’t be overlooked as the FPA—with or without the CFP Board—meanders its way toward creating a profession. 

Specifically, I’m referring to the Financial Planning Coalition’s ill-fated attempt to establish a national financial planning regulator, and the consequent placing of the Coalition and all things financial planning in the penalty box for the duration of the reregulation debate. In addition to its name (boring), the problem with financial planning is that it’s (still?) too marginal to the way that most retail financial advice is delivered to be considered more than a fringe element. And it didn’t help that (at the Board’s insistence) a “financial planner” was to be defined as “anyone delivering any two of the six-step FP process.” Under that definition virtually every stockbroker, insurance agent, investment advisor, accountant and lawyer in the country would have been deemed a “financial planner.”