The American College's chief executive has taken the Financial Planning Association's incoming chief executive, Lauren M. Schadle, to task about comments she made in advocating the certified financial planner designation.
In an interview with
InvestmentNews on Monday, Ms. Schadle said that the group was “putting together action plans that speak to the FPA's being the professional resource and advocate for CFP professionals.”
“We believe that one profession and one designation is the best way to build the financial planning profession,” she added.
But the comments raised the ire of The American College, which issues the chartered financial consultant and chartered life underwriter designations.
NO "PANACEA'
Larry Barton, CEO of the college, said: “It is apparent that Ms. Schadle believes that one designation — the certified financial planner designation — is a panacea for all planners. Not true.”
“FPA also wants to define "planning' as a separate profession instead of recognizing it as the discipline it is, one used throughout financial services,” Mr. Barton said. “The FPA already has enough challenges, and believing in a monopoly just adds to their headaches.”
The FPA's endorsement of the CFP designation goes back to 2000, when the organization was formed from the merger of the International Association for Financial Planning and the Institute of Certified Financial Planners, according to Paul Auslander, president of the FPA and CEO of American Financial Advisors Inc.
It was a condition of the merger and the group's bylaws that the CFP be promoted as the designation for financial planning, he said.
“I don't like the fact that [Mr. Barton] doesn't think we said the right things,” said Mr. Auslander. “But I understand where he's coming from, and I'd love to have that conversation with him.”
He noted that though advisers benefit from the education tied to the designations, the standards connected to the CFP are different from those of the ChFC or the CLU.
“It doesn't match the rigor of the CFP in the enforcement, the continuing education, the public perception or knowledge,” Mr. Auslander said. “I don't care what education you get — get something — but if you have choices and you're in the financial planning world, the CFP is the mark of choice.”
The competition between The American College and the Certified Financial Planner Board of Standards Inc. for designees heated up in 2009, after the CFP Board added a fiduciary standard for its planners. The ChFC and CLU designations are historically the domain of agents and advisers working with insurance carriers.
SEEN AS ALIENATING
FPA members have said that the key to attracting new members is to be welcoming to planners from all business models, whether fee-only or commission-based.
The problem with the FPA's promoting one designation is that it alienates members whose business model conflicts with the CFP's standards and aren't fee-only, Mr. Barton said, adding that it gives the public an impression that there's only one designation.
“Consumers must realize that fee-only planners typically charge around $2,500 just for a financial plan, before they even consider purchasing any products,” Mr. Barton said. “That is a big-ticket mountain for many consumers who live paycheck to paycheck, and the FPA needs a dose of reality before it tells consumers that one designation fits all Americans.”
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