In my May column in Investment Advisor,A Category Is Born: CFP Professional Practices,” I wrote about a study by the Aite Group, sponsored by the CFP Board. In that study, the authors explore whether CFPs and teams that include CFPs make more money than non-CFP advisors or teams without CFPs advisors. For those who’d rather skip dissecting the study (or reading my column), the short answer is they do: about 40% more annual revenue.

Yet the most interesting part of that study (at least to me) wasn’t about CFP revenue or income; it was about the CFP Board’s standards for CFP conduct, particularly the requirement to act in the best interests of clients. Here’s what it said: “CFP professionals are held to a fiduciary standard of care when providing financial planning. […] Clients may believe they are receiving a financial planning service that meets CFP Board’s definition when they are instead receiving a service that is narrow in scope and incidental to the transaction. [Emphasis added.]

To my mind, this analysis of when CFPs are and are not fiduciaries (for the same client), combined with the conclusion that CFPs “manage 40% more of their clients’ investment assets on a fee basis compared to other practices,” strongly suggested that the Aite study was essentially a sales pitch for brokerage firms to hire — or train — more CFPs.

In response to that column, I received an insightful email from a CFP (who wished to remain anonymous, so I’ll call him/her “Mike”) who put a much finer point on my conclusion. “For me, and the many respected CFPs I know, the intensive training and education [to become a financial planner] was a period of enlightenment,” he wrote. “I knew I had to become independent and do it the right way every day. So, my conclusion is that CFPs who are walking the talk go independent and earn more because they are knowledgeable. What one does with this knowledge is another matter though.”

Mike is talking about the problem that essentially all professions were created to address: Just because one has greater knowledge about a subject than their clients or patients or students, it doesn’t necessarily follow that one is using that knowledge for their benefit. That’s why we have professional standards — such as the fiduciary standard for advisors — requiring professionals to act in the best interests of their clients, etc.

Mike addressed the CFP Board’s role in setting standards for the planning profession. “You asked in your article why the Board needs to sell ‘CFP’ so hard? It’s because they/we have an identity crisis,” he wrote. “The Board is trying to get the word out on what the marks mean. If you ask a person what a CFP is, they are likely not to know. Worse yet, if you ask for the difference between a broker and a CFP, they’ll have no idea. This is where your article stopped short.”

Here’s where Mike gets to his main point: “I think it is impossible for someone working at a brokerage house, mutual fund company, insurance co., etc., to put the interests of their clients first. How can they when a person in the corner office is holding their feet to the fire to make sure they sell $500,000 in annuity contracts per month, for example? The employees, as you rightly called them, do not have free will and live in a world of limited choices. Try doing it ‘your way’ at [a large brokerage firm] and see how long you last. This is the insidious part of how the [CFP] marks are used. I believe the marks are being used as a cheap marketing tool to trick consumers into believing the credentials mean a person is able to deliver [a fiduciary] standard of care.”

What Mike’s talking about here is the current practice by some brokers and other advisors of being “part-time fiduciaries.” That is, acting as a clients’ fiduciary when they manage their portfolio — but not when they sell them the investments in the portfolio. Or when they create a financial plan, but not when they implement that plan.

Yes, we can talk about client disclosures of when an advisor is and isn’t acting in their best interest. But we all know there isn’t one client in 1,000 who understands the difference — or more importantly, who understands the implications of what the non-fiduciary part means: no restrictions on cost-management, conflicts of interest or self-dealing. Do we really believe that anyone would choose non-fiduciary advice if they truly understood the difference?

Finally, Mike addressed the CFP Board’s role in this fiduciary charade. “The CFP Board collects $350 a year from 74,000 CFPs, or $25.9 million a year,” he wrote. “This money, I’m told, is to promote the CFP marks by educating the public. […] If the Board needs this money [to sell CFPs], how could they possibly disallow the use of the marks or attempt to enforce a standard on folks working as employees under the thumb of that guy in the corner office? The answer: They can’t or won’t. So, the Board will keep collecting fees [and] all the while the public is being deceived and cheated by rogue advisors using the marks as a cheap marketing tool.”

Not to put too fine a point on it. The final point that Mike is addressing here is essentially the pervasive problem throughout financial services: There is way more money to be made selling overpriced and low-quality products than there is to be made through recommending sound, cost-effective, client-centered solutions. If there was more money in it, we wouldn’t need standards, would we? But there isn’t, so we need professional standards for financial professionals. And without them, financial planning becomes just another marketing tool.