The Financial Planning Association says it will unveil a new strategy next year aimed at shoring up the title of “financial planner” to ensure that people who wear the title are subject to a set of standards.
“Everyone agrees that there’s confusion in the public because anybody can hang a shingle out and call themselves a financial planner,” said FPA 2024 President-Elect Paul Brahim, who managing director and senior vice president of Pittsburgh-based Financial Advisor Wealth Enhancement Group. “So, people can call themselves a financial planner without any training, or education or continuing education, experience requirements or ethics.”
Brahim said such an arrangement can be harmful to the public and creates the potential for abuse.
To combat that, early next year the FPA says it will unveil a plan on what the organization would like to see done to establish stability with the title. In June the organization’s board unanimously decided to make it a principle public policy aim for the year. Since then, the FPA’s national volunteer leaders along with its CEO, Patrick Mahoney, have been meeting with interested parties to address the situation, according to Brahim.
“We spent all our time [since June] meeting with … stakeholders in this idea,” he said. “Getting some perspective on what their view of title protection means and what the pros and cons are.”
The FPA is looking for a set of standards that are broader than certification programs like those administered by the CFA Institute and the American Institute of Certified Public Accountants, Brahim said.
“There are lots of certification programs, but how big should that tent be,” he asked. “I don’t think it comes down necessarily to a certification, but rather a set of standards.”
Financial planners should be the only ones allowed to create financial plans for their clients, Brahim explained.
“We want to be sure that we get it right and the aim is to elevate financial planning and to identify them as a unique and distinct profession,” he said.
He acknowledged that the drive for title protection is a long-term advocacy objective that will take several years to complete.
He pointed out that by elevating the position of financial planning, it can become a more attractive position to younger generations as well as women and minorities.
“I think it’s important for the future of our profession to make it attractive to younger people and to a broader and more diverse group of people that planning is elevated as a unique and distinct profession and if you’re not a planner, you can’t engage in financial planning,” he said.
