ONE SET OF LETTERS, PLEASE

In his Nov. 17 letter, Lou Nebel is bothered by the thought that only those who have a particular credential should practice financial planning. He is particularly upset that the acceptable credential may be “CFP.” He is not alone. But is he justified?

I very much doubt that Mr. Nebel would go to a medical doctor who didn’t have an “MD” after his name. The need for some minimum credibility that the public can rely on is just as essential in the financial planning field as it is in medicine.

It is time that the authorities and those of us who work in the field support the concept of “one profession, one designation.” Just as in medicine, the designation does not guarantee that all designees are excellent, only that they have studied the broad scope of the subject, that they have experience, are legally expected to follow a stated ethical code and that they participate in ongoing education to continue their public practice.

Note that even if they do not operate a public practice they can still refer to themselves as MDs and work in related fields such as administration, research, even journalism.

Should the certified financial planner designation be the one to survive? Why not? It is an excellent program. It requires substantial tested basic knowledge, three years mandatory experience and a demanding code of ethics, including ongoing education. Other demanding designations, such as certified public accountant, can expect that complimentary CFP designations will be granted considering that the requirements are equal to or better than those of the CFP Board of Standards. Any such credential, in addition to the CFP, would provide increased credibility.

There are some problems with the CFP Board of Standards which can be corrected. Then the CFP designation, and laws requiring it, could be to financial planning what MD is to medicine: a benefit to all concerned.

Gib Kerr

Chairman

Los Angeles Society of the Institute

of Certified Financial Planners

Do you sell
time or

do you sell products?

I read the Dec. 15 letter from CPA Mike Creasman, who quoted the legendary Col. Sanders: “Do one thing and do it well. If you are going to fry chicken, fry chicken.”

If we are to follow Mr. Creasman’s advice, we are to limit our work to a narrow scope. A CPA should not discuss whether clients should invest in an individual retirement account, buy a life insurance policy or estimate the tax on the sale of a building. Accountants, I suppose, should limit themselves to historical data only – let the client make bad decisions, then accurately report them to the IRS and the bank. In the future are we going to have to call one professional to turn on a light switch and another to draw the bath water?

I am interested in seeing a single national license, like CPA, in the financial advice industry. Every person seeking to provide financial advice to the public should possess a license. I don’t care which letters survive and which ones don’t, but the multiplication of designations confuses the public, while each new one devalues all the old ones. There needs to be one nationally recognized mark.

The central issue is not the difference between a CPA and a CFP. The issue is the difference between individuals who sell products and individuals who sell time.

In my case I had to pass 20 tests for my nine letters – CLU, CFP, CPA – and I learned something new all 20 times. I am qualified both as a financial planner and as an accountant. I certainly intend to continue to fry both fish and chicken.

Terry Halley

Cheyenne, Wyo.

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