Possible CFP Board foray into continuing ed worries advisers

Many see big conflicts of interest if designation grantor also runs CE program

May 9, 2013 @ 3:51 pm

By Mark Schoeff Jr.

CFP, conflict of interest, CFPB, continuing education, financial planning
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Red flags are flying over the possibility that the Certified Financial Planner Board of Standards Inc., which grants the CFP designation, will get into the continuing-education business for planners.

The worries bubbled to the surfaced Thursday at the National Association of Personal Financial Advisors spring conference in Las Vegas.

During a brief Q&A session, Jon Yankee, a partner at Fox Joss & Yankee LLC, questioned CFPB chief executive Kevin Keller about the organization's possibly getting into the continuing-education business. Mr. Yankee expressed concern about a potential conflict of interest.

“Everybody has conflicts — even NAPFA members have conflicts,” Mr. Keller replied. “As the CFP Board looks at the potential and what our role should be, that would be one of the things that the board of directors would have to give serious and significant deliberative discussion to.”

In an interview after his remarks, Mr. Keller said that the CFP Board is exploring the feasibility of offering continuing education for the approximately 68,122 CFP mark holders. Currently, there are about 1,250 providers registered with the board.

Michael Kitces, a partner and director of research at Pinnacle Advisory Group, said that the CFP Board should stay out of the CE business because it sets CE standards and oversees providers.

“You can't go into competition with the people you regulate,” Mr. Kitces, a blogger who writes Nerd's Eye View, said on the sidelines of the NAPFA conference.

Another NAPFA attendee, Martin Hopkins, president of Hopkins Investment Management LLC, said that the CFP Board should provide CE quality control but not become a CE practitioner. Doing so might give an unfair advantage to its own CE approach.

“If they say that's the only way it can be done, I would have some difficulty with that,” Mr. Hopkins said.

The Financial Planning Association also opposes the CFP Board providing CE.

“For nearly 30 years, FPA and its members have played a significant role in helping build respect for the CFP marks and the CFP Board’s incursion into the CE provider marketplace would damage the credibility of the marks and be a step backwards for the profession,” the FPA said in a statement.

The CFP Board currently is considering how to proceed with a proposal that would change CE standards for CFP mark holders. It would increase the number of CE hours to 40, from 30, every two years and also give CE credit for practice management and pro-bono work. Currently, CE hours are given only for topics related to the CFP exam.

Since the proposal was announced late last summer, it has drawn 1,100 comments — 85% of them in opposition, according to Mr. Keller. Many of the dissenters said that they already are overwhelmed with CE requirements for the various designations they hold. They also argue that CE quality, rather than quantity, should be improved.

“If we were to move forward [with the proposal], it would be November, at the earliest, before we made that decision,” Mr. Keller told the NAPFA audience.

Many of the 400 or so conference attendees are in Las Vegas to earn hours for their NAPFA continuing-education requirements. The organization is made up of about 2,500 fee-only investment advisers, most of whom hold the CFP mark.

Harold Anderson, president of Parkshore Wealth Management, said he supports the CFP Board's efforts to strengthen CE standards.

“It advances the profession,” Mr. Anderson said.

But he acknowledges that tinkering with the requirements can cause controversy.

“It's like raising the Social Security age by a year,” Mr. Anderson said. “You get everybody coming out of the woodwork.”

Mr. Hopkins said that CE is a necessary part of being a credentialed adviser.

“I see the importance of it, so I buy into it,” Mr. Hopkins said. “It's like anything you have to do, you usually don't feel like doing it.”

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