The back-and-forth touched off by NAPFA's announcement last Tuesday to go all-CFP next year highlights the fact that after decades of discussion and debate, the financial advisory business is still struggling to define itself.
Several stories written by InvestmentNews re-porter Mark Schoeff drew plenty of online chatter from readers. Although some comments were constructive and others comically entertaining, all demonstrate how much the industry has left to do to attain a higher standard.
The move to a CFP-only designation by the National Association of Personal Financial Advisors may appear to be a step in the right direction, but a long road lies ahead.
Amid all the hoopla about what is, in reality, a relatively minor event, there is an important point: The industry needs to work in a unified way to raise the profession to the proverbial next level.
We hear from executives at various trade groups that consumers know and respect the CFP designation. If that is true, what must investors think when financial advisers themselves challenge it?
To that point, many comments claimed that the CFP is in no way superior to a variety of other designations, including ChFC, CFA, CLU, PFS or CPA.
The banter quickly escalated into a battle over which designation is more important, credible or difficult to obtain.
Some readers weren't beyond name-calling, with one commenter suggesting that CFP stands for “certified failed planner.”
It got really ugly when a reader wrote: “Forbes had it right back in the "80s with their cover showing a chimpanzee and titled, "These Days Everyone's a Financial Planner.' After 25 years, I don't see much that has changed.”
In one of Mark's stories last week, NAPFA chairman Lauren Locke said: “You know a lawyer is a J.D. You know a doctor is an M.D. So financial planners should be CFPs, because that's different than a broker.”
Ms. Locke may be onto something that could resolve the dispute, which is undermining the industry's professional growth.
Doctors and lawyers must obtain state-issued licenses to practice. A variety of other highly regarded professionals must receive government-issued licenses, including architects, certified public accountants, paramedics, pharmacists, nurses and dieticians. Those government-issued licenses convey something to consumers.
It is high time that advisers had the same strength behind their designation.
The industry's powers that be should use this opportunity to consider partnering with state and federal licensing boards to create a single, government-issued financial advisory designation that will identify advisers and planners as real professionals.
This needs to happen for the sake of both the industry and investors.
LISTEN TO THE BUZZ
Right or wrong, advisory pros are challenging NAPFA for placing more value on the CFP designation than others in the industry.
The bickering needs to stop now, and the industry must work together to raise the profession's level by setting a single standard.
Jim Pavia is the editorial director of InvestmentNews. Twitter: @jimpavia