1. It has been said that the CFP® credential is to financial planning what the CPA credential is to accounting. What is your view of this opinion?
FPA remains committed in its belief that the CFP® certification is the public's best indicator of competent, ethical financial planning. In terms of the quality standards they represent, the CFP mark resembles the CPA. Similarly, the two marks are the most widely recognized by the public within their respective professions.
An important difference is the fact that financial planners are not required to obtain the CFP certification to practice. That raises accountability concerns, leaving the door open for practitioners who possess other credentials, some of which are better than others. Often, FPA does do its part to help the public identify competent, ethical financial planners through public awareness and its requirements-based referral service. FPA works to help all of its members become more skillful, more knowledgeable and to act ethically, regardless of the credentials they hold.
2. What are the key challenges that will face those in the discipline and profession of financial planning, over the next 5 to 10 years?
The profession's biggest challenge will be meeting the growing consumer interest in — and need for — financial planning. FPA works hard to help the public understand the value of financial planning, and demand is growing. With increasing retirement expenses and decreasing defined benefit opportunities, 77 million baby boomers approach their retirement years without a lot of safety nets of the past. We will see many changes in the coming years in which financial planning is delivered and the areas of its focus. FPA must continually keep its members up-to-the-minute on changing products, methods and economic factors so that they can help clients effectively.
Second, financial planning is offered in many ways by many types of planners and financial services professionals. The profession is at an important crossroads; many advisers are embracing client-centered financial planning, while some seem to be resisting it in favor of outdated practices that emphasize product over process. FPA's lawsuit against the Securities and Exchange Commission (SEC) gets right to the heart of that debate. The public deserves to expect that anyone delivering financial planning services will fully disclose conflicts of interest and will place the client's interests first.
Third, we must find ways to provide financial planning to underserved segments of our population. At the same time, we must guard against financial planning becoming a commodity — a service offered by so many types of individuals and companies that the consumer mistakenly perceives price to be the primary differentiator. That's why FPA will continue to advocate high standards, full disclosure and a holistic decision-making process that enables development and implementation of a modular and/or comprehensive financial plan. It is important to remember that financial planning as a professional discipline is based on a foundation of specialized knowledge and process that enables the delivery of advice across a broad spectrum of financial services-related subsets.
Read more about Marv Tuttle on his bio.