Financial Planning Organizations Band Together

Three financial planning organizations—Certified Financial Planner Board of Standards, Inc. (CFP), Financial Planning Association (FPA), and National Association of Personal Financial Advisors (NAPFA)—said they have come together to pursue industry reform.

The groups plan to hold a series of meetings to discuss a unified response to widely expected reform of the financial services industry by the next Congress, though the specifics of reform have not yet been determined.

The groups said in a press release that the leadership of the three organizations met Dec. 3 at CFP Board’s Washington, D.C., offices. The purpose of this meeting was to review regulatory gaps in the delivery of retail advice and other financial services to consumers, as well as the opportunities and threats with respect to establishing appropriate standards of conduct for the financial planning profession.

Speaking with, Diahann Lassus, national chair of NAPFA, said the financial crisis and the entry of a new Congress and administration made the timing right to have these talks, especially as the market affects individuals—making sure consumers are protected and know where to get advice is a large part of what the organizations do, she said.

“We are very pleased to have opened positive lines of communications within the financial planning community to discuss an issue that is so critical to consumer protection,’ the group said in a joint statement. “As a component of regulatory reform, we anticipate that, at some point in the near future, Congress will consider enhanced protections for consumers of financial services.’

Financial planning is currently regulated indirectly through licenses held by investment advisers, securities brokers, and insurance producers or consultants, but not as a separate, stand-alone profession. “We would like to see smart regulation for financial planners…so that we can eliminate some of the complexity…and make it clear to consumers who they need to go to for advice,’ Lassus said.

The group intends to reach out to other organizations in order to seek feedback from stakeholders on future regulation of the financial planning profession.

“I just think that going forward this is really important that the three of us work together and that other organizations that share our goals step up and work with us, because the more organizations that work together, the more likely we are to be successful,’ Lassus said.