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Financial Planning > College Planning

FPA Leader Wants CFP to Be the ‘One Designation’

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I was not surprised that Larry Barton, Ph.D., CAP, president and CEO of The American College in Bryn Mawr, Pa., went on the offensive after seeing published comments last week from incoming Financial Planning Association (FPA) boss Lauren Schadle, CAE.

Schadle, the current COO at the FPA, will take over as CEO/executive director of the Denver-based FPA when current CEO Marvin Tuttle Jr., CAE, steps down on Oct. 2. But Schadle stepped right into the fray by telling Investment News last week that the FPA is putting together action plans that speak to the FPA’s being the professional resource and advocate for CFP professionals. “We believe that one profession and one designation is the best way to build the financial planning profession,” Schadle was quoted as saying in the Investment News article on Aug. 22.

Barton responded quickly by calling Schadle’s quotes in the article “ill-informed and detrimental to consumers, especially those in the middle and lower income brackets.”

Read Barton’s complete comments here.

“It is apparent that Ms. Schadel believes that one designation, the Certified Financial Planner designation — is a panacea for all planners. Not true,” Barton said. “FPA also wants to define ‘planning’ as a separate profession instead of recognizing it as the discipline it is, one used throughout financial services. The FPA already has enough challenges, and believing in a monopoly just adds to their headaches.”

The American College is actually the No. 1 provider of the CFP certification education and prepares more individuals to take the CFP certification examination than any other educational provider. (CFP Certification is granted solely by the Certified Financial Planner Board of Standards.) But The American College also developed and awards the Chartered Financial Consultant (ChFC) designation, which competes with the CFP.

The CFP Board added a fiduciary standard for its planners in 2009, while ChFC and CLU designees are not required to adhere to a fiduciary standard of care. The FPA’s own membership includes not only fee-only fiduciary advisors, but also commission-based brokers. While FPA membership says a key to increasing membership is to be welcoming of planners from all business models, whether fee-based or commission-based. But leadership appears intent on unifying those two camps under a fiduciary standard.

Barton, in his press statement responding to Schadle’s comments, said consumers must realize that fee-only planners typically charge around $2,500 just for a financial plan before they even consider purchasing any products. “That is a big-ticket mountain for many consumers who live paycheck-to-paycheck, and the FPA needs a dose of reality before it tells consumers that one designation fits all Americans.”

Attempting to limit consumers to fee-based advice from only CFPs indeed seems unrealistic, but I would love to hear what you think about the industry designation debate via the comment tool below.

For more from Brian Anderson, see:

Movers and Serial Refinancers: Two Opportunities for Life Agents

Cycle of Price Increases

Life Insurance: Why Aren’t They Buying…and What Can You Do About It?


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