My comments on the Second Proposal of Revisions to CFP Board's Standards

Nothing impressive and to be honest I'm not the guy to do the technical / legal analysis, but I can't help a chance to comment (in essay length!) on changes in the financial planning industry.

I want to thank CFP Board again for taking this issue on directly. It’s an unsure time for much of our profession. We have several unclear paths that regulations may take. From my standpoint as a small advisory firm I see constant pushes by governments, large traditional firms, and today large independent advisory businesses pushing for regulatory schemes that benefit them through their ability to handle the cost burden of such regulations, but I am not so sure are only being advocated for selfless motivations. Many new competitors in financial services or existing firms that have begun offering “advisory” services have pressed for 'fiduciary' regulations that will benefit them. Every passing month I see government officials, media, industry professionals and the public using the 'fiduciary' term and each has their own meaning for it. While it is true that what is 'best' to one may not be for another, and that what is ‘best’ may change over time, it is only an independent body within the profession that will be able to appropriately judge what shape future best practices will take.

The problem of guaranteeing all clients receive advice that is complete and in their interest is best managed by an organization like the CFP Board. It’s my hope that CFP Board continues to be a voice for all of the profession and works to provide education to regulators on appropriate laws that benefit the consumer by growing competent financial planning services. I was happy to see the depth of the industry representation in this process.

Financial planners need a body to lead in regulatory conversations, just as other professions have their voice in shaping appropriate laws. We need to have the position of holding ourselves to higher standards voluntarily in order to be a credible voice in forming regulation and opposing those who may do harm to the growth of the profession in pressing for inappropriate regulation burdens. I have been surprised at how willing and without pushback we have allowed a myth that our industry is a 'cost' to those we serve, often quoted at $17B per year. We should not be weak in addressing the lifealtering benefits we know exist through our services to those who will never believe those benefits, or who simply believe they can be better address by government entitlement programs.

I encourage CFP Board not to defer to or wait for government to implement the fiduciary aspect of the standards. Many in our profession will find themselves in conflict with future definitions of what ‘fair compensation’ or some other aspect of a government law based on past advice standards. An independent body that represents the needs of the client with a desire to grow the advice market for all – not to take advantage of the law to harm competitors – is going to be vital in the coming years. I hope CFP Board continues to lead on the issue.

Finally, I think that these standards will hopefully be something that advisors will be able to point to and be proud of when we see criticism of the value of planning. As practioners we know the value of our services to those we work for. Far too often today we market our services separately and on the value. This has led the push by many for increased regulations and proposals that would harm our ability to serve the public.

The planning profession is at a crossroads, and my biggest fear is if we do not have the ability to share our value that the future will be like so many industries that did not standup for the value that they provide – they are regulated until only the largest can compete. This would kill the innovation that we saw over the past decade. Investors today can find advisors that are CFP® professionals providing services at a level that only accredited investors could find not long ago and at a far lower price. That could continue if the planning profession is allowed to grow in a sensible regulatory world that was built on a level playing field of sensible and comprehensible rules. There are no promises that will be the case without our input and leadership.

Thank you again for your work on this vital issue and the opportunity to comment.


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