FPA’s new president makes ‘title protection’ for financial planners top priority

Financial Planners

When arguing that financial advisors should have legally protected professional qualifications, just like lawyers and doctors, the new president of the Financial Planning Association likes to take the words of one of the planning industry’s founders: Quote.

James Lee, who took over as chairman of the FPA’s board in January, was particularly drawn to wealth management guru Dick Wagner’s predictions that financial plans would “The most important authentic occupations of the 21st century.” WagnerThe lawyer-turned-advisor, who died in 2017, used these words in his 2016 book. “Financial Planning 3.0” It argues that financial planners deserve the same kind of professional status that is currently accorded to lawyers, doctors, chartered accountants, and engineers.

Lee said one of the goals of the FPA, an advocacy group with more than 19,000 members, is to move Wagner’s ideas into reality. FPA’s suggestion for doing that is “Title Protection”. This became an official policy priority last July. When adopted as law at either the state or federal level, title protection means that only advisors who meet certain testing and educational standards can appeal to investors as financial her planners.

read more: What is a financial planner?

A previous survey conducted by the FPA suggested that about 80% of the group’s members supported the initiative. Lee and his colleagues are now investigation, town hall meeting and other discussions with industry stakeholders.

james lee

“Historically, the three great professions are medicine, law, and theology.” It is because of their importance to society: medicine sustains the body, law sustains society, and theology sustains the mind. , I believe that financial planning can become the fourth great profession because of its impact: improving the financial well-being of individuals and ultimately impacting society.”

FPA membership is primarily composed of Certified Financial Planners (advisors who meet the competence and ethical standards set by the Independent Certified Financial Planners Standards Board). It also includes estate planning attorneys, accountants, insurance agents, and others who support the work of planners. (The CFP Board has refused to support the FPA’s push for property protection, in part because of concerns that it will have to cede control over standards.)

Mr. Lee, a certified financial planner who has run Saratoga Springs, New York-based Lee Investment Management since 1998, recently met with Financial Planning to discuss their plans for property protection. The interview below has been edited for clarity and brevity.

Financial plan: Why seek title protection now?

Lee: There is currently no universally accepted standard for calling oneself a financial planner. So anyone can call themselves a financial planner, even if they don’t meet any of the competencies or ethical standards. Many consumers are looking for their financial planner but are confused because they don’t know who they can trust. People call themselves ‘financial planners’, but they don’t actually offer financial advice or are incapable of doing so, which creates confusion. It creates a situation where many Americans do not trust their financial service providers.

Currently, you cannot claim to be a doctor, lawyer, or certified public accountant unless you have achieved a certain level of competence and ethical standards. We believe financial her planners should have the same transparency in the marketplace. This makes it clear to consumers, practitioners, regulators, and society at large who can serve as financial planners.

Financial plan: With title protection, do you think there are still people who offer various types of financial advice without officially becoming a professional financial planner?

Lee: right. Again, if we are successful in achieving title protection, consumers will be able to seek out people who meet these criteria before engaging with them. There is no gender.

Financial plan: Do the competence and ethical standards you are looking for in a professional financial planner inherently reflect the requirements currently set by the Certified Financial Planner Board of Standards?

Lee: Our policy is that the CFP certification and the standards it stands for constitute the foundation of the financial planning profession. At the same time, he is involved in the process and leads conversations with all members of the financial planning ecosystem to determine thresholds of competence and ethical standards. Ultimately, we want to create a consensus and universally accepted standard among as many members of the financial planning ecosystem as possible.

Financial plan: When you say clients have a hard time distinguishing between qualified and unqualified advisors, it is an implicit criticism of the CFP Board’s efforts to make certified planners the industry standard champions. is it?

Lee: In my personal opinion, to my knowledge, the FPA has not investigated this issue, but the CFP Board has moved the needle, informed the public of the benefits of working with CFP experts, and successful in educating. At the same time, until universally accepted standards are established for calling oneself a financial planner, there will be market confusion among consumers, practitioners and regulators. Once title protection is in place, the delivery of financial planning benefits is accelerated.

Financial plan: How much time do you plan to spend evaluating member input on title protection proposals?

Lee: Throughout the first half of this year, we will engage with all stakeholders in the financial planning ecosystem to determine our next steps thereafter. In fact, we started having these conversations with our members last year.

Financial plan: Have you consulted an attorney about what the legislative language for property protection looks like?

Lee: Our public policy advisors are lawyers and obviously we rely on that expertise. In some cases, decisions are not made until years later.

Financial plan: Do you anticipate pursuing property protection at the federal level or individual states?

Lee: Since many of our members work across state lines, we would prefer federal regulation. Therefore, having uniform standards is ideal. But the reality is that almost all other occupations are regulated at the state level. Therefore, you should consider these types of issues when deciding your next steps. That’s why I’m interested in hearing how stakeholders feel about issues like this. In doing so, we can try to build consensus not only on what the standards should be, but who the regulators should be.

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