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.”

0
Comments

What do you think?

View comments

Upcoming event

Nov 19

Conference

New York Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in six cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Most watched

Events

Finding innovation in your firm

Adam Holt of AssetMap explains how advisers understand they need to grow, but great innovation may be lurking right under your nose.

Events

Finding your edge from Tony Robbins

Guru Tony Robbins has helped a lot of people, but armed with his psychology Financial Advisor Josh Nelson has helped his practice soar.

Latest news & opinion

The growth of factor-based investing

Advisers are making decisions about clients' portfolios by using the same characteristics that govern factor-based ETFs.

Finra makes its list to target hundreds of rogue individuals

The regulator sees patterns in the behavior and disclosures of high-risk brokers.

LTC insurer offering co-pays to blunt soaring premium increases

John Hancock policyholders would get a discount on their premium in return for agreeing to pay a bigger portion of their claims in the future.

Goldman Sachs acquires United Capital

After a payday of $75 million or more, CEO Joe Duran plans to join Goldman in a senior position.

Private equity loves IBDs, but will that last?

Three big acquisitions in less than a year signals renewed life in the formerly beleaguered industry.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print