Outside pressure helps change CFP Board's mind on offering continuing-ed program

Decision eases conflict-of-interest concern over effort to burnish CE

Nov 13, 2013 @ 2:11 pm

By Mark Schoeff Jr. and Trevor Hunnicutt

Pressure from groups representing investment advisers helped persuade the Certified Financial Planner Board of Standards Inc. to stay out of the continuing-education business.

In announcing its decision Wednesday, the board said that it instead will implement a plan over the next three to five years to improve the more than 15,000 education programs from the approximately 1,400 providers registered with the board. The model for the effort is the CE curriculum for certified public accountants.

“We have every effort and hope that will increase the quality to an acceptable level,” CFP Board chief executive Kevin Keller said in an interview. “In the near term, we will not return to the idea of offering CE.”

Both the Financial Planning Association and the National Association of Personal Financial Advisors strongly resisted the notion of the CFP Board becoming an education provider. Both groups offer their own continuing education and asserted that the CFP Board would have a conflict of interest in regulating and providing continuing education.

“They said straightforwardly that they appreciated the feedback, they heard the feedback and they took it into consideration,” said NAPFA chairman Linda Leitz, who participated in a conference call with CFP Board officials before the CE policy was announced.

The CFP Board reacted not only to the FPA and NAPFA but also to its own members, who have been pushing the board to bolster the quality of continuing education, according to Mr. Keller.

When the CFP Board proposed a rule to increase the CE requirement from 30 to 40 hours every two years, it received more than 1,100 comment letters, most of which urged the board to focus on quality rather than quantity of continuing education.

“The board has listened to the CFP certificants and is making an effort to be responsive to these comments about the importance of increasing the quality of CE,” Mr. Keller said. “We think that this is the best way to do that at this time.”

In the first phase of the program, which will be implemented in 2015, will include updating the registration process for CE sponsors and programs so that they better articulate the learning objectives and complexity of their courses, as well as the qualifications of the instructors.

The 14 voting members of the board unanimously approved the CE plan at a meeting last week in New York. The CFP Board grants the CFP designation and oversees associated education and ethics requirements.

The FPA praised the CFP Board for its decision on continuing education.

(Don't miss more comments from the FPA on the CFP's CE plans)

“They did what they need to do as a certifying body, which is to be dedicated to ongoing elevation of quality in the marketplace by controlling the processes, the standards, the protocol by which CE is delivered,” said Michael A. Branham, the FPA's president. “We've been talking with them for months now, [telling them] that we thought them entering the CE marketplace was a bad idea, that it was a conflict of interest.”

Planners are required to complete 30 hours of coursework every two years in order to maintain certification, but some education programs for planners have come under fire for mediocre content and sales pitches.

“We're being pushed to up the ante,” said NAPFA chief executive Geoffrey Brown. “I think it's significant for the current sponsors because CFP Board has issued a challenge to providers, NAPFA included, to ensure that we're providing high-quality programs for CFP professionals.”

The CFP Board's decision not to move forward with its own programs drew mixed reactions from industry watchers.

“The ominous inclusion of the words 'at this time' regarding the decision not to offer CE programs still leaves the lingering concern of whether this issue will rear its ugly head again in the future,” Michael Kitces, partner and director of research at Pinnacle Advisory Group, wrote in an e-mail. “I'm greatly relieved to see they have chosen not to engage in conflicted competition with the CE sponsors they regulate.”


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