Certified Financial Planners should earn the designation
By robert neill
The Financial Planning Association commends the Massachusetts Securities Division in its latest effort to protect elderly investors from fraudulent and abusive sales practices. The Division has decided to take assertive action against insurance agents and others, who claimed to have specialized knowledge in retirement or elder care planning, and who took advantage of elderly investors.
The many designations currently in use in the financial services marketplace is a significant problem for all investors. These titles imply high levels of experience and expertise, when in fact, many are little more than mere marketing tools.
We believe most Americans can improve their quality of life by securing competent, objective and comprehensive financial advice to assist them in attaining their financial goals. Thus, FPA supports the Securities Division’s goal of limiting the use of professional designations to those that are truly meaningful. Such limitations reduce fraud and confusion, and increase trust in qualified financial planners.
FPA has offered the Certified Financial Planner certification as an example of a respected professional standard for people providing competent and ethical retirement and elder care advisory services to the public.
Achieving the CFP mark requires completion of a rigorous course of study and successful passage of a comprehensive exam that tests an individual’s ability to practice financial planning. CFP practitioners also agree to abide by a strict code of professional conduct. FPA has urged the Division to develop uniform and objective criteria to ensure that meaningful designations are not included in the prohibition.
FPA has also urged the state’s securities regulators to work closely with the Division of Insurance to ensure that insurance agents are similarly prohibited from using misleading designations.
For years, FPA has supported more stringent suitability standards in the sale of annuity products to the elderly and other investors. To protect consumers, there must be similar restrictions against persons selling insurance products. Abusive sales practices in connection with certain annuity products have become a growing area of concern for regulators. All persons holding out misleading designations to the public should be subject to the same prohibitions.
The Massachusetts Security Division’s attempt to limit professional designations should be carefully studied by state regulators across the nation.
Robert Neill is the assistant director of government relations for the 28,000-member Financial Planning Association, a national non-profit organization whose members include financial planners, accountants, attorneys, bankers, charitable giving specialists, insurance agents, stockbrokers, money managers, investment consultants, broker-dealer and corporate executives, and others who champion the financial planning process.
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