Debate over the definition of a "fee-only" adviser is likely to be resolved in the next couple of weeks, as fee-only professionals push for the Certified Financial Planner Board of Standards Inc. to establish a workable definition, according to leadership of the National Association of Personal Financial Advisors.
"It's been an ongoing conversation, but we don't expect it to drag on much longer," Geoffrey Brown, NAPFA's chief executive, said in an interview Friday at the association's national conference in Philadelphia.
Linda Leitz, chairwoman of the NAPFA board, told members at the conference that in the next couple weeks the organization will be trying to help the CFP Board come up with a definition that works for fee-only advisers.
"We need a definition that is not just stringent but workable and predictable and enforceable," she said. "If it doesn't work in practice, then it doesn't work."
CFPs can describe their compensation as fee-only if they're paid only via fees and are not affiliated with any financial firm that charges a commission. If they have a connection to such a firm, even if they don't charge their clients commissions themselves, their compensation is deemed "commission and fee."
On Sept. 20, the CFP Board temporarily removed the fee-only description from website profiles of about 8,000 of the nearly 69,000 CFPs. The CFP Board made the move after it learned that many dually registered advisers and those who work for wirehouses were claiming fee-only status.
NAPFA allows its members to own up to a 2% stake in a financial services firm that charges commissions. However, NAPFA also decided to require that new members have the CFP designation as of Jan. 1.
The association "certainly has a vested interest," Mr. Brown said.
CFP Board was not immediately available for comment.