As a final follow-up to my Jan. 16 AdvisorOne blog (Fiduciary Debate: What if Doctors Could Act Like Advisors?), a comment by Svensan03 raises an interesting issue, albeit with a rather off-the-wall analysis, but then redeems his or her self by offering an on-the-money solution to the fiduciary debate. First, here’s what Svensan03 had to say about an advisory profession: “Your penchant for comparing apples with oranges is annoying. The art of medicine is a “licensed” profession. Licensees are neither supervised nor audited by regulators, but rather, disciplined for their mistakes through Arbitration and the legal system after the fact. Advisors who provide advice regarding regulated securities will NEVER, let me repeat that…NEVER, be “licensed.”
I am indeed aware of the difference between a “licensed” profession and a regulated business. In fact, it was the CFP Board’s decision when it was created in 1987 to opt for a trademarked business model that has hampered the emergence of a financial planning profession for the past 25 years. Because professional licensing would entail a separate board in each of the 50 states, raising the issue of reciprocity and uniformity of standards—not to mention greatly reducing the role of the national board—the CFP Board’s predecessor the IBCFP decided to trademark the CFP designation instead, and then license its use to qualified financial planners.
Not only did this decision lead to many years of minimal oversight of CFPs, out of fear that someone would challenge the Board’s right to the trademark, but led to the evolving list of descriptions for CFP holders—licensees, designees, certificants—which made them sound more like confused hairstylists (not that there’s anything wrong with that) than professionals—and to the Board’s adamance that it was/is essential that CFPs religiously use the moniker du jour, or else all hell would break loose.