With Thanksgiving past and the new year approaching as I write this, it's a perfect time to kick back and contemplate the year that was 2009, and few places in the world are better for such musings than Santa Fe. Perhaps it's the solitude of the setting, or maybe it was the two interviews I had earlier today, but as I stare at the snow-capped Sangre de Cristo mountains, it occurs to me that I've finally solved what my biographers might possibly call "The Riddle of the CFP Board."
It might be likened to my personal Moby Dick, but since its formation in 1988, the CFP Board has been a puzzle to me. I'd see the brightest, most ethical financial planners get elected to the Board, and before you could say "CFP Lite" they'd start coming out with statements and initiatives that would leave me shaking my head in disbelief. A few examples that come immediately to mind are, of course, the great Harold Evensky and "CFP Lite," Elaine Bedel (who I still believe is the poster girl for advisor integrity), Bob Goss arguing you're a financial planner when you give advice but not when you implement that plan, and most recently, model planner and Board chair Marilyn Capelli Dimitroff patiently explaining to me that in the "real world" it's in the public's best interest for the Board to serve both advisors and sales folks. Honestly, you just can't make this stuff up.
In pursuit of an answer to my quandary, over the years I've asked many people in the industry for their assessment, and been provided with theories ranging from a fear of losing the trademark on the CFP, to the Board's status as a 501(c)(3) corporation which avoided setting up state boards, to the heavy hand of Bob Goss, who was viewed either as the Messiah or the Dark Lord. Yet none of these seemed sufficient to explain the massive groupthink that seems to occur shortly after absorption into the Borg, ah, I mean, Board.
In fact, it wasn't until a few minutes ago that the answer dawned on me. In case you missed my past writings on the subject, and that of many others, the Board, through its somewhat surprising dominance of the recently formed Financial Planning Coalition (which also includes the FPA and NAPFA), has taken the raging battle over a fiduciary standard for all advisors as an opportunity to push for becoming the regulator of all financial planners.
The CFP Board's Goal?
On its face, this is just one more quirky initiative by a seemingly out-of-touch Board, to be sure. Yet, the timing is obviously no coincidence: With financial advisory regulation up for grabs for the first time in 70 years, now is certainly the time to throw the Board's hat into the regulation ring. But why would the Board (and the FP Coalition) think that anyone in this fight would care a whit about "financial planners" when they are mentioned not at all in the Obama Administration's releases or draft legislation? Why would anyone think that the Board (or its proxy) with a few thousand CFPs loosely under its belt could compete with FINRA and its $1 billion budget and 700,000+ registered reps to become the single regulator of all financial advisors? And why in the world would you think that this was more important to financial consumers than a fiduciary standard that would truly put their financial advisor on their side of the table?
Then it hit me: Suppose you didn't see the world from this perspective? Suppose, due to a few too many tabs of window pane in the '60s or because your trademark only covered the CFP mark and the six-step financial planning process (or a combination of the two), you had concluded that the single most important factor for a consumer's financial well-being is that any advice they get be the result of the six-step financial planning process?
That is, it's more important than how the advisor is compensated, whom they work for, limitations on the "products" they can recommend, whether you're always a financial planner (even for the same client), or even the actual definition of the fiduciary duty. Once you determine that your goal is to spread the use of the financial planning process, you might be pretty darn flexible about virtually everything else.
One Little Problem
