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A Slingshot for David(s)?

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Over the years in this space, I’ve pleaded for independent advisors and their associations to dispense with infighting to advocate for their shared constituencies: independent advice givers writ broadly and, most important, their clients. Whether you’re talking about Dodd-Frank or the fiduciary standard or even the regulations imposed by the SEC, the states or SROs, looking past the relatively small differences between advisors to unify and advocate together over the bigger issues is the right thing to do.

In my experience, most advisors I know in the RIA and independent broker-dealer channels are ethical people who do put their clients’ interests first regardless of whether they have a legal or regulatory requirement to do so.

No, I’m not naïve. I know there are bad actors in the advisor community and different business models that profit, figuratively and literally, from client confusion over what they’re getting from and paying for professional advice. No, I’m not simplistic. I know there are honest differences of opinion over many issues. Take the Department of Labor fiduciary redefinition. I don’t know of anyone who thinks it’s a perfect rule, regardless of how it eventually turns out.

Still, I remain hopeful that compromise on small matters can produce benefits over bigger matters, a hope fed by groups like the Financial Planning Coalition and recent cooperation between the major custodians to address cybersecurity, with meetings hosted first by Bernie Clark of Schwab and second by Mark Tibergien of Pershing. “It looks like I’ll be hosting the third” such meeting in San Francisco, Clark told me during the Schwab Impact conference in Boston in mid-November.

That’s why I’m intrigued by the CFP Board’s launch of the Center for Financial Planning. As CFP Board CEO Kevin Keller explained in a Nov. 17 interview, the Center is designed to help provide a “more sustainable, diverse supply of advisors and financial planners” to the profession, while also providing “an academic home” for planners.

Worried about “workforce development” and a lack of diversity in the current CFP population, and sitting as it does “at the crossroads” of the “supply and demand” dynamics of the profession, Keller said the Center is the Board’s response to the profession’s human capital issue.

Kate Healy of TD Ameritrade, which is the lead founding sponsor of the initiative, was blunt and inclusive in the same interview. “We know we have a shortage” of advisors, so TD decided to support the Center since “we have to do something different from what we’ve been doing” to increase the number of advisors and make the advisor workforce more reflective of American society. “We want to get everyone [in the industry] involved. We hope it catalyzes the industry,” Healy said.

Marilyn Mohrman-Gillis of the CFP Board said the two areas of focus at the beginning of the Center’s activity will be a development committee to raise funds for the center, and building an advisory council to convene early in 2016 designed to bring together subject matter experts, including “experts in diversity” to drive the Center’s activities. The goal, according to Mohrman-Gillis? To conduct “research to action to results.” The CFP Board and other companies — Pershing comes to mind, as does Raymond James, among others — have long encouraged more women to enter the profession. An example of what the Center will do, she said, is find out whether these various initiatives are really working, and share the “learnings” of that research with the wider community.

The lobbying budgets of the traditional Wall Street firms far overshadow the resources of the independent advisor industry. But smaller firms with more limited resources working together with the right tools can accomplish miraculous results.