Bid to regulate financial planning industry will soon run into opposition, leaders predict

The industry effort to regulate financial planning as a profession has support from within, but it won’t escape opposition from other sectors of the financial services community, several industry leaders said today. “There could be push-back from various industry sources,” Richard Salmen, departing president of the FPA, said at the group’s annual convention today in Anaheim, Calif. In December, the Certified Financial Planner Board of Standards Inc., the Financial Planning Association and the National Association of Personal Financial Advisors formed the Financial Planning Coalition to lobby for legislation that would define and regulate financial planning. But opponents to this coalition could include the securities, banking and insurance industries, as well as the Financial Industry Regulatory Authority Inc. The coalition has specifically said Finra should not regulate planners. So far, no opposition has emerged, according to Mr. Salmen and Marv Tuttle, the FPA’s executive director, but it could pop up in the near future. “The legislative process is messy, money lubricates it, and we’re not the deep pockets,” Mr. Salmen told reporters today. FPA chapters have been supportive, said Mark Johannessen, the FPA’s chairman and managing director at Harris SBSB, a unit of Sullivan Bruyette Speros & Blayney Inc. in McLean, Va. “But we’re preaching to choir” at chapter meetings, he said. “Definitely, it’s a risk” that not all planners will support regulation of the profession, Mr. Johannessen said. “Who’s going to boss me [if planners are regulated], the state or [a federal regulator]?” said David Barnett, a financial planner at Barnett Financial Planning in Tustin, Calif., a state-registered adviser. He added that he’s worried about the fees planners might have to pay for regulation. Planners who are not CFP certificants also may worry about being excluded from the profession, said Mr. Salmen, who is a senior vice president of GTrust Financial Partners in Topeka, Kan. “We’ve been very clear [that] this [effort] is not setting the CFP mark up as being the only people who can play in the financial planning sandbox,” he said. Mr. Salmen also acknowledged the risk of ending up with a bill that the coalition itself could not support. “Once you let the [legislative] genie out of the bottle, you have no control over it,” he said.