Rowling’s Appeal To NAPFA Reflects A Deeper Problem In The Movement To Make Financial Advising A Real Profession

Saturday, February 08, 2014 20:24
Rowling’s Appeal To NAPFA Reflects A Deeper Problem In The Movement To Make Financial Advising A Real Profession

Sheryl Rowling’s appeal to NAPFA to restore accepting CPA/PFSs as members even if they do not hold a CFP designation reflects a deeper problem in the movement to make financial advising a real profession.

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Each segment of the financial services world thinks it is the answer, the designation, the real professional.
This myopia obscures commonalities and gets in the way of creating a single profession comprised of practitioners from all the different disciplines of financial advising.  
I’m not proposing that CFA Institute merge with CFP Board and the AICPA’s Personal Financial Planning Practice Section. I’m just saying that the different corners of the profession all have to find common ground instead of erecting new barriers the way NAPFA members did to CPA/PFSs.
All of these groups need to stop thinking of what’s best for their professional status and start thinking about what’s best for consumers. Finding common ground on ways to help consumers would be a lot more productive than bickering.
CFPs, CIMAs, CPA/PFSs, ChFCs, CFAs and lawyers all have the same goal: serving clients well and making a living. Each segment of the profession has something of value to consumers and each other.

Comments (5)

Very well said Andrew. I couldn't agree more. I have seen these barriers weaken a bit over the past decade (old ways die hard), and NAPFAs decision didn't help matters, though it didn't really set anything back. It may just be the wrong message to be sending at this time. I am hopeful still that decision may get reconsidered. Importantly, the PFP Division at the AICPA is making great strides in building bridges and creating collaboration between the serious organizations representing PFP practitioners. The most overt example is their recent annual advanced planners conference (over 1,0000 attendees, up from 750 the year before) where CFA Institute and IMCA were invited to actively participate in development and delivery of the investment track, and both organizations as well as the CFP Board of Standards had booths in the exhibit hall. It really had the feeling of inclusiveness and the "Big Tent" that will be necessary if a true profession of financial planning is ever to evolve. I see it happening, just more slowly than most of us would like. Sometimes so slowly it's hard to see it, but it is happening.
cblackman , February 09, 2014
Although I applaud the spirit of inclusiveness implicit in both Andrew's remarks and yours, I think the mark is still being missed a bit, as it relates to the good done by NAPFA's announcement (I am not a NAPFA member by the way).

In the public's eyes, doctors are doctors, lawyers are lawyers and accountants are accountants.

The public (I would venture a speculation here) 80% of the time? ... sees, M.D. as meaning doctor, CPA as meaning accountant, and M.D as meaning doctor.

I would also submit that those in the academic arena sees it this way as well.

Looking back at your remarks, I see AICPA, PFP, IMCA, CFP, and CFA) in one small comment.

I would submit that this alphabet soup (and the remark did not even come close to mentioning both the granting body and the designations for every entity) is not helping the public to get the kind of clarity and focus it has around doctor lawyer and accountant.

I would agree that the remarks have touched upon the groups that many of us agree are"at the top" of the financial planning profession, but that's part of the problem.

What we need is a SINGLE designation that means Financial Planner to the public, in the same way that CPA means accountant to the public.

Keep it up NAPFA. We're getting there...
KLM , February 13, 2014
Everyone asserts that it is the designation like CPA, MD that matters so a financial planner needs to be a CFP. I disagree because the designations in the financial services industry, aside from the CFA, do not like a CPA or MD mean the designee must operate in or at a specific level of care.

Financial Planning, ie, how the numbers are calculated and illustrated to an investor must first be regulated. A CPA cannot willy nilly do someones taxes or perform a corporate audit outside GAAP, nor can a CFA calculate performance however he or she chose.

Because of a lack of a standard of care, the CFP will never be a serious designation. Its a membership association. You just need to pay and pay for CEs.
brentb843 , February 19, 2014
As stated in the comments of my original column, the CFP board should not be allowed to unilaterally decide that CFP should be the only recognized designation, thereby increasing the money in their coffers. It is the equivalent of high jacking a profession. Interesting that "KLM" stays anonymous.
SherylCPA , February 20, 2014
Hi there .. KLM here.

I will not take the bait here, to make this personal.

My belief is that the logic stands on it's own.

Further, I'm not convinced that sharing one's personal information on the internet is wise. I choose not to...

This should be about a free exchange of Ideas, not personality.

But again, I respectfully disagree that the CFP Board is trying to "unilaterally decide that CFP should be the only recognized designation," as you say.

By setting forth a set a of standards and ethics, (not unlike the ABA's Model Rules of Professional Conduct) and then executing bravely; by exposing through public discipline, admonishing, suspending, and REVOKING the designation, they set a standard that on which the public can rely.

I also disagree, completely, that a CFP would NOT be held to the same standard of care (GIPS) as a CFA in calculating investment performance. They have provided us with those standards. There's no need to re-do that work. I would submit that if performance calculations WERE the subject of an action, CFP Board would apply that standard.

And auditing is NOT the purview of a CFP pro. However, in accordance with the standards, IF that competence and training is ALSO there, then the standards would say that the CFP should apply the APPROPRIATE set of accounting standard's (fair value for example - or contribution accounting RATHER than GAPP , when isolating a product's contribution to a firm's profit).

The CFP as a general practitioner designation, that the public can trust, makes a lot of sense.

Then NAPFA (another organization interested in objectivity and the elimination of conflicts of interest - an area in which the CFP standards are RIGOROUS) is wise in aligning itself with this designation.

Again, please do not read my disagreement as promoting competition. I think that alignment, just as Andrew points out, above should be the objective.

Where we differ, I think, is in the perception that CFP board is somehow asking that the CFP be the ONLY recognized designation.

I think that when one reads the professional standards, thoroughly, one sees that recognition of varying levels of competence and the need to disclose and refer to other professionals when appropriate is integral.

Promoting itself as the recognized standard of excellence for personal financial planning - along with developing a framework and process for doing that (beginning over 50 years ago) is what this is about.

I do not think that is't coincidental that the PFS credential uses essentially that same framework that was developed at the college for financial planning so many years ago.

When I decided to hold myself out in my chosen market as a CFP practitioner, I returned to school and completed a business degree at an AACSB accredited school of business.

I then completed an MBA with a specialization in Finance.

I will graduate this May with a JD, having taken as many electives as possible in the areas that compliment and enhance the CFP areas - Tax Law, Estate Law, Property Law, Securities Law, Corporate law and Business Planning ... in order to be the best CFP practitioner I can be.

I really (and I think that I should have the right to express this here - or anywhere else) think that those that don't understand the need to take this to the next level (the CFP as the personal financial planning standard of excellence) and somehow interpret the NAPFA (also an association focused on PERSONAL financial advice) decision to align itself with CFP as competing with already established designations such as CPA for accounting and CFA for investment, is misguided.

The DISassociation of the Designation from any one of the specific areas - investments, tax, financial statements (financial position), etc., and setting standards that allow one to get their proverbial arms around ALL if it (whatever areas apply)and either DO that work, or refer in an informed way to the appropriate professional, is what this is about.

This is the a distinction, not a competition.

KLM , February 21, 2014

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