FPA, CFP Board deny urge to merge

Financial Planning Association officials say they, in fact, stand up to CFP Board, and that both organizations serve different missions

Oct 31, 2014 @ 1:33 pm

By Mark Schoeff Jr.

Officials of the Financial Planning Association said that they do stand up to the organization that grants the certified financial planner designation and dismissed the idea of a merger, in response to criticism from a vocal investment adviser.

Earlier this week, in a lengthy blog post, Michael Kitces charged that the FPA has been genuflecting to the Certified Financial Planner Board of Standards Inc. over hot-button issues, such as compensation descriptions. He also implied that the FPA is waning because its membership level — about 23,000 — is only a fraction of the number of domestic CFPs, at about 70,000.

“As the FPA has failed to take up the mantle for CFP certificants and its market share has fallen to fewer than 25% of CFP certificants as members, its role as a check and balance to the CFP Board is coming undone, and the balance of power is shifting to the CFP Board,” Mr. Kitces, a partner and director of research at Pinnacle Advisory Group, wrote in his blog, “Nerd's Eye View.”

In a letter posted on Mr. Kitces' blog Thursday, FPA president Janet Stanzak and chief executive Lauren Schadle said the FPA has pushed the CFP Board to raise CFP client-care standards, blocked the board's effort to provide continuing education, resisted attempts to establish a “CFP-lite” designation and exerted influence in the compensation debate.

“FPA enjoys a healthy collaborative relationship with the CFP Board, and each year we meet regularly both publicly and privately to keep our membership concerns at the forefront of our discussions,” Ms. Stanzak and Ms. Schadle wrote.

If the FPA weakens, there may be no point in having separate certification and membership organizations, and that CFP Board may seek to “facilitate a takeover/assimilation of the FPA, or simply replace it with a new membership organization,” Mr. Kitces wrote.

Both the FPA and the CFP Board said that they will remain separate organizations.

“There's never going to be a merger,” Ms. Stanzak, principal at Financial Empowerment, said in an interview. “That just isn't in the cards. We serve different missions.'

CFP Board chief executive Kevin Keller also was unenthusiastic about the groups combining.

“We enjoy a strong collaboration with FPA and believe FPA is playing an important role in the profession's ongoing development,” Mr. Keller said in a statement. “We endorse and support FPA as the membership organization of CFP professionals, and there are no current discussions about a merger between CFP board and FPA.”

The FPA is having trouble attracting more CFPs because it has a “big-tent philosophy” that allows non-CFPs in its membership, Mr. Kitces said.

“By trying to adjust its membership to the lowest common denominator, the FPA has simultaneously become less appealing for CFP certificants and non-CFPs as well,” Mr. Kitces wrote.

Ms. Stanzak countered that the FPA, which was formed by a merger of the International Association of Financial Planning and the Institute for Certified Financial Planners in 2000, is supposed to be expansive. In 2012, it did adopt a strategic directive to promote the CFP mark through its “one profession/one designation” initiative.

“We are not a CFP-exclusive association,” Ms. Stanzak said. “We are a CFP-centric organization. That was the intent of our founders, and I don't see that changing.”

She touted the fact that FPA maintains an 88% retention rate for its CFP members, who constitute two-thirds of the organization. She said there's nothing wrong with a professional organization whose membership represents 25% of the practitioner market.

“I think that's about normal,” Ms. Stanzak said. “We have room to grow, and we fully expect to grow.”

In the letter on Mr. Kitces' blog, Ms. Stanzak and Ms. Schadle said there has been “slowing growth in the CFP professional population.”

Mr. Keller said that's not true.

“In fact, the number of CFP professionals has grown by 54% over the last 10 years,” he said. “In 2006, CFP professionals constituted 16% of the total advisers in the industry. In 2013, they constituted almost 23% of advisers.”


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