A piece of legislation known as the Freedom to Invest in Tomorrow's Workforce Act is making its way through Congress as part of the broader tax reform package that was recently passed by a one-vote margin in the U.S. House of Representatives. The omnibus bill is now in the hands of the U.S. Senate, which is expected to make some proposed changes before negotiating a final version with House leadership.
It’s an exciting development for the financial planning industry, according to Erin Koeppel, a managing director of government relations and public policy counsel at the Certified Financial Planner Board of Standards, as the legislation would permit the use of tax-advantaged 529 plan funds to pay for programs like postsecondary training and credentialing — including the CFP designation.
“This is a really important issue for us at the CFP Board — something we’ve been advocating for across a few Congresses,” Koeppel told ThinkAdvisor. “At this point, it looks like it has the momentum to hopefully cross the finish line now that it’s been included in the bigger tax reform package. It doesn’t seem to be one of the sticking points, either, so we’re hopeful it will make it through the negotiation process between the House and Senate.”
It’s true that the CFP Board would likely see benefits from the legislation’s passage, Koeppel said, but the proposal would have a broader reach that would help students, established professionals and career changers in fields that cut across the U.S. economy. Indeed, the bill has so far garnered the support of more than 800 trade associations, professional societies and businesses, Koeppel noted.
“You also can see the broad, positive impact this proposal will have in the fact that it has 177 bipartisan co-sponsors,” Koeppel noted. “That’s 100 Republicans and 77 Democrats in the House and 13 members in the Senate, including seven Republicans, five Democrats and one independent. The legislation is firmly in the top 20 bills right now in terms of the number of co-sponsors.”
If the measure passes, people will be able to use 529 accounts to pay for a variety of expenses involved in the pursuit of professional designations, including training program tuition, prep courses, testing fees, practice exams and continuing education.
“Passage of the bill would send a message to the public about the importance of careers like financial planning,” Koeppel said. “One of our important strategic priorities at the CFP Board is bringing more people into the profession. We continue to see more people retiring than coming into the profession, and we need to reverse that trend. We believe this bill would help.”
As Koeppel noted, people often assume that financial services professionals can easily afford to pay for things like certification courses and examinations.
“That may be true for established professionals who have found success in securing and serving clients, but what about young people and career changers?” Koeppel asked. “Not everyone takes a straight path into this industry, and we also have to consider that a lot of young people are entering the field while being saddled with student debt. Giving them a tax-advantaged way to save and pay for credentialing and CE would be meaningful.”
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