Since my last blog (Should the FPA Get Behind the CFP Board or Go It Alone?”) on Michael Kitces’ virtual white paper about what’s wrong with the Financial Planning Association (Could FPA’s Waning Power Lead to Its Untimely Demise?), two leaders of that association—Janet Stanzak, the current FPA president, and Lauren Schadle, FPA’s CEO—posted a lengthy response to Michael’s remarks.
While they do a nice job of articulating the FPA’s stated mission to “represent the interests of, and expand the opportunities for, CFP professionals,” and detailing the steps their organization has taken toward that end, one is struck by the paucity of specific examples of those efforts over the past 14 years.
Even more troubling is their happy talk about how great the FPA is doing of late (without mentioning the rather dire membership and revenue figures cited by Kitces), while failing to mention the elephant in the convention hall: the CFP Board’s wooing of Wall Street and what that means for the future of the FPA.
Stanzak and Schadle agree with Kitces about the FPA’s mission, boldly stating: “The financial planning profession needs a professional membership association to zealously represent the interests of, and expand the opportunities for, CFP professionals – in FPA, it has it.” And then they go on to enumerate examples of the FPA’s efforts at representing: “…there have been numerous instances… …where FPA and our predecessor organizations acted as an essential counter-balance to policy positions promoted by CFP Board. We have mobilized our members and chapters on many issues over the years including leading the charge to dismantle the notion of having a ‘CFP-lite’ designation, proactively lobbying the CFP Board to elevate its standard of care for CFP professionals in 2007/2008, discouraging CFP Board’s entry in the continuing education marketplace and influencing the clarification of compensation definitions just last year.”
What Your Peers Are Reading
Folks, that’s four instances over the past 15 years (the CFP Lite controversy occurred in the summer of 1999, the year before the FPA was founded). Which means that of those four examples, one didn’t even involve the FPA, while discouraging the Board’s entry into CE was more of a matter of protecting the FPA’s economic turf than CFPs. Of the remaining two, I don’t remember what “standard of care” in 2007 they are talking about (hopefully, you do, and it’s really important).
That leaves “influencing the clarification of compensation definitions last year.” I do remember what this is about: it’s the Board’s recent crackdown on the incorrect use of the term “fee-only” and related descriptions, during which three CFPs were forced off the CFP Board, two CFPs were prompted to file suit against the Board to stop a public censure after they had corrected their mistake, and another CFP relinquished his designation in protest that the Board was disciplining him for the actions of his RIA firm, over which it has no jurisdiction.
It’s important to remember that during the time, hundreds of brokers had designated themselves to be “fee only” on the CFP Board’s own website: The Board responded by sending them a letter kindly asking them to rethink their compensation status. In response to all this, the FPA asked the Board to clarify its definitions? Really?
I suspect this is what Kitces was getting at when he suggested the FPA hasn’t been living up to its role as CFP advocates with the Board. Yet it’s hard for me to believe that the FPA’s scanty record on CFP advocacy is the cause of its failure to capture much of the recent increase in CFPs. As Kitces pointed out, since 2000, the number of CFPs has virtually doubled, from about 36,000 to over 70,000, while the FPA’s membership declined, from some 30,000 to around 23,000.