In an interview on Tuesday, the leadership of the Financial Planning Association (FPA) discussed the group's priorities for 2011, with Martin Kurtz, who succeeded Tom Potts as president effective Jan. 1, 2011, noting that when it comes to a fiduciary standard, it's a "global movement."
Investors want such a standard, Kurtz argued, citing a Financial Planning Coalition Survey in which 97% of investors agreed that, "when you receive investment advice from a financial professional, the person providing the advice should put your interests ahead of theirs and should have to tell you upfront about any fees or commissions they earn and any conflicts of interest that potentially could influence that advice," according to the survey.
"It's the business model that works," and, Kurtz said, the "fiduciary standard is the FPA-CFP practice standard." The FPA's "thrust this year is educating members how to be fiduciary advisors. It's not a destination—it's a vehicle, with virtues we all believe in," Kurtz added.
Kurtz (left) spent seven years on the Certified Financial Planner (CFP) Board of Professional Review, the disciplinary arm of the CFP Board, and chaired that board in 2005. He says that "most hearing panels were about suitability;" not whether members had met the higher fiduciary standard, but rather "Did you even fulfill the suitability" standard?
Kurtz, who is president of The Planning Center advisory firm in Moline, Ill., also worries, however, that there is a broader problem with the American consumer's financial illiteracy, noting that "we're not good at talking about life and money in this country."
The mission to educate FPA members about fiduciary "best practices" and how to incorporate the fiduciary process into their firms' practices led the FPA to team up with Don Trone, and his organization, Strategic Ethos. The FPA and Strategic Ethos will provide the Fiduciary Ethos-FPA Edition book and program to FPA members—and non-members—for a limited time, at no cost, Kurtz says. FPA members, and anyone else, for that matter, will be able to download the book at the FPA website starting March 7.
Reaching Out to FSI
Marv Tuttle (left), CEO and executive director of the largest association of planners—which currently has 23,700 members—said in the same interview that FPA is actively reaching out to members of the Financial Services Institute (FSI) to re-engage with the FPA. "The FSI has done a great job at advocacy" on behalf of the independent broker-dealers, Tuttle said, but suggested that the broker-dealer community would do well to take advantage of FPA's expertise in practice management and in "community—we bring that to the table a little more than they do."
