Podcast Center
Video Center
Webcasts
Resource Center
Events
August 21, 2012 at 08:00 PM
Kevin Keller must be doing something right. He just celebrated his fifth year as CEO of the Certified Financial Planner (CFP) Board of Standards. When he took over, he was the seventh person in less than seven years to hold that position.
Maybe his staying power has something to do with the fact that he helped transfer the CFP Board from Denver to Washington five years ago this November. As he told me in a late July interview, the CFP Board “had no public policy infrastructure” until it moved its headquarters to Washington.
It’s been a crucial time for the CFP Board, as part of the Financial Planning Coalition, to be able to sit alongside other advisor trade groups before Congress to help fight against, for instance, House Financial Services Committee Chairman Spencer Bachus’ bill calling for a self-regulatory organization (SRO) for advisors—which looks to be on hold at least for the rest of this year—and to fight to make sure that a fiduciary standard for brokers sees the light of day (which has yet to happen). Commissioners at the Securities and Exchange Commission (SEC) are “still pretty tight-lipped” about when a fiduciary duty rule may emerge, Keller says.
The three groups that comprise the Coalition—the CFP Board, the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA)—“barely even spoke” before striking their accord, Keller says. But now, the CFP Board not only has a seat at the public policy table, Keller says, “but a loud, clear voice.”
The Coalition agrees with Chairman Bachus, R-Ala., that there is “really a serious problem” with the fact that, on average, an advisor is examined only once every 11 years, and Keller believes Bachus “did the right thing by shining the spotlight on the need for more advisor examinations.” Still, Keller says, “we’re pleased that he’s taking a step back, though, to look at more solutions to the problem.”
However, Bachus’ fight to have an SRO oversee advisors continues. He took to the op-ed page of The Wall Street Journal in early August to implore the investing public and “all interested parties” to join the debate concerning how to boost advisor exams. “I see no way to deter bad actors and to protect American investors without increased oversight,” Bachus wrote. “Who conducts those examinations and how is still open for debate, and I urge all interested parties, especially the investing public, to join this debate.” Bachus went on to write that “the risk of another [Bernie] Madoff scandal ought to be a sobering thought not only for Congress and the investing public, but for the investment adviser industry as well. It is in their best interest that we work together to reach consensus.”
Of course, the Coalition still believes that providing the SEC with the resources it needs “is the best solution to the [exam] problem,” Keller says. But finding a way to ensure advisors face more exam scrutiny—either through an SRO or via user fees paid to the SEC—will be a “long-term issue that we will have to deal with,” Keller says.
