Advisers want CFP continuing education to count toward state requirements

NASAA model rule would require IARs to complete CE to close the regulatory gap with brokers

Investment advisers want the continuing education that they must complete for professional designations and licenses to count toward a proposed new education requirement from state regulators.

In February, the North American Securities Administrators Association released a model rule proposal that would mandate continuing education for investment adviser representatives.

One theme running through the comment letters posted on the NASAA website is that advisers should get credit for CE they must complete to retain a credential such as certified financial planner. Comments were due on April 13 and were posted by NASAA earlier this week.

“What is being proposed is totally redundant and an unnecessary burden for active CFPs,” Bob Blanke, owner of Braeside Financial Planning, wrote in a March 2 comment letter.

Requiring continuing education for IARs would close a regulatory gap with registered representatives, NASAA said. Registered reps must meet CE requirements from the Financial Industry Regulatory Authority Inc.

As a dually registered investment adviser representative and registered rep who also holds a CFP and a Wisconsin insurance license, Chad Nehring said he is required to complete many different types of continuing education.

“The vast majority of continuing education hours do not ‘cross-over,’ in other words they are counted for one organization but not for another,” Nehring, president of Conceptual financial Advisors, wrote in a Feb. 17 comment letter. “I have no problem fulfilling my CE requirements, but I can certainly see areas where the process could be made more efficient.”

In the proposal, NASAA said it would consider allowing CE from professional designations to count toward the state CE requirement, noting that the CFP and four other credentials already get a waiver from the Series 65 examination under a model NASAA rule.

Sean Walters, chief executive of the Investment & Wealth Institute, said a similar waiver for a state CE requirement should be available for other designations.

“With only some minor changes to the rule – albeit significant in eliminating material conflicts and updating its waiver exemption so that it affords a safe harbor for all qualified professional designation providers – then IWI could offer its unconditional support for the proposal,” Walters wrote in a March 20 comment letter.

The Securities Industry and Financial Markets Association asked NASAA to allow financial firms to administer CE for dually registered advisers.

“SIFMA member firms, as opposed to external training providers, are the most common source of CE and training programs that dual registrants must complete,” Kim Chamberlain, SIFMA managing director and associate general counsel, wrote in an April 9 letter. “Our members have a strong interest in continuing to provide such important training and do not believe an additional 6 hours of general training is necessary or even helpful to individual advisors.”

Under the rule, IARs would would have to complete 12 hours of CE annually. Half the hours would focus on products and practice and the other half on ethics and professional responsibility.

Steven J. Thomas, president of RIA Compliance, supports the CE requirement but said that 12 hours may be too much and four to six hours may be sufficient.

“I understand that for some IARs 100 hours a year would not be enough but I also think that for small firms with 1-2 IARs, 12 hours a year may be a burden that promotes a ‘just get my CE done for the year’ rather than ‘this will be good for me to keep me in compliance,’” Thomas wrote in a Feb. 18 letter.

The comment letters will be reviewed to determine whether any revisions are required to the proposal before it goes to the NASAA membership for a vote on adoption, which could occur at the organization’s annual meeting in August, NASAA spokesman Bob Webster said. If the model rule is approved by NASAA, individual states would then have to do their own rule-making to implement the regulation.