Last month I had the pleasure of attending the 2007 Program Directors Conference for directors of educational programs that help prepare financial planners for careers as CFP® professionals. One of the moments I found most memorable was hearing CFP Board’s CEO, Kevin Keller, address our program director community for the first time.

Kevin outlined steps CFP Board will be taking to strengthen its commitment to the education requirement for CFP® certification and its support of the more than 300 financial planning educational programs registered with CFP Board, including hiring additional staff dedicated to education and making plans to create a Council on Education that will include members representing program directors.

Kevin also noted that while nearly 90% of applicants for the CFP® Certification Examination have completed a registered program, the work of registered programs can be much more than helping students memorize information they can use on the exam. A registered program has great potential to help prepare financial planners to work with clients in a comprehensive way that can touch and improve nearly all parts of their clients’ lives. As Kevin stated, “Teaching itself is a noble profession, but teaching something as transformative as financial planning is even more special.” The presentations at the conference demonstrated that many registered programs are working hard to integrate theory with practical knowledge. They are looking beyond immediate concerns, such as exam preparation, and focusing on larger issues that will have long-term benefits for their students and the financial planning clients they will work with.

Kevin’s presentation and many of the presentations from the 2007 Program Directors Conference are available for download on CFP Board’s Web site.

Some may find it surprising that a conference focused on educational programs also included a session about CFP® certification outside the U.S., presented by representatives from Financial Planning Standards Board, Ltd. (FPSB), the organization that promotes CFP® certification outside the U.S. While the subject is sure to inspire thoughts of travel to exotic locations, it’s also a subject with great relevance. The details of the practice of financial planning vary greatly around the world due to cultural, regulatory and economic issues, but there are core values and practices that are shared worldwide. The CFP® marks are becoming a frequent sight around the world, and the financial planning community is increasingly a global one.

CFP Board has long been involved with programs developing financial planning standards outside the U.S., providing guidance to organizations outside the U.S. that have expressed interest in establishing high standards for financial planning and promoting the CFP® marks as the symbol of those standards. When FPSB was formed in 2004, CFP Board agreed to support its activities whenever possible. We’ve enjoyed frequent visits from FPSB members interested in discussing best practices for maintaining high standards and for improving public awareness of the benefits of financial planning. Many of the materials and processes CFP Board has shared with international colleagues have been adopted in other countries; international colleagues have also shared several best practices that CFP Board has considered implementing in the U.S.

Later this month, CFP Board representatives will attend the FPSB Council meeting in Brazil to discuss ways in which CFP Board might participate more formally with FPSB and its member organizations. It is an important time for CFP Board to remain engaged with the international financial planning community. The number of CFP® professionals outside the U.S. will soon exceed the number of CFP® professionals within the U.S., and financial planning organizations outside the U.S. are developing standards and best practices that exemplify strategies different from those CFP Board has established. As CFP Board stands to benefit from a strong presence in our nation’s capital, it also stands to benefit from looking beyond immediate issues to international trends and activities that have the potential to affect CFP® certification in the U.S.

Karen P. Schaeffer, CFP®
2007 Chair, Board of Directors
CFP Board

Not long ago, a couple who wanted to work out a retirement plan came to see Dianne Webster, CFP®, founder and president of Integrated Financial Strategies in Amesbury, Massachusetts. Their main concern was, of course: ‘Do we have enough money?’ If the answer was no, the couple (in their mid-50s) wanted to know what else they needed to do to prepare.

Webster talked to the couple and during the course of their discussion discovered that the husband, who was employed in the high-tech industry, had a passion for history, an interest he hadn’t pursued since college. He thought he might like to take some history courses in retirement, and maybe even teach. So Webster incorporated tuition savings into their overall plan, and now the husband is going to night school. “A relevant financial plan must support the client’s values as well as lifestyle,” Webster says, “so it’s important to pursue an understanding of these issues. This helps clients gain clarity in describing why they have come for a consultation, and often broadens the conversation beyond the presenting issue.”

This was certainly true for the history buff and his wife. They came into Webster’s office wondering if they had enough money for retirement; they left enthused by the realization that there was so much more still to do during the next stage of their lives. The story is an excellent example of how personal and financial goals intersect, and it’s a neat illustration of the art of being a client-centered financial planner.

Recently, the “client-centered” philosophy has been championed by the Lifework$ Collective, a think tank of industry leaders comprised of Carol Anderson (president and CEO of Money Quotient), Susan Galvan (president of Galvanic Communications, co-founder and previous CEO of the Kinder Institute of Life Planning), Sheryl Garrett, CFP® (founder of the Garrett Planning Network), and Marie Swift (president of Impact Communications). The group outlined its approach in “Heart of the Matter,” an article in the March 2007 issue of Financial Planning. “A client-focused approach requires that you examine and nurture four interrelated dimensions of your professional life,” the Lifework$ founders wrote: “that you be true to yourself (Authenticity); that you explore the values of each client (Understanding); that you commit to the highest standards and activities (Implementation); and that you communicate your unique value proposition (Articulation).”

The importance of the “understanding” and “implementation” aspects of the Lifework$ approach was highlighted back in July, when the New York Times ran a front-page story (“For Elderly Investors, Instant Experts Abound”) exploring how clients can sometimes get lost in the maze of professional credentials in the marketplace. The article was published shortly after CFP Board announced its updated Standards of Professional Conduct, which includes strengthened provisions that emphasize the client-centered focus of financial planning. “The updated Standards affirm that all CFP® professionals must put the interest of their clients ahead of their own,” Karen P. Schaeffer, CFP®, 2007 Chair of CFP Board’s Board of Directors, wrote in the June issue of CFP Board Report, “and to provide financial planning services with a fiduciary duty of care, in the best interest of the client.”

The Lifework$ Collective believes that all planners should put that philosophy into practice. “In a financial plan, you’re not just dealing with numbers,” Anderson says. “There is a quantitative stage of data gathering, in which you lay out a client’s assets and liabilities. But there has to be a qualitative data gathering stage as well, in which you explore the client’s values, needs, attitudes and expectations. You have to know what the client’s goals and priorities are before you can give appropriate financial advice.”

Anderson’s own goals and priorities changed when she was in her mid-30s. Faced with an impending divorce, she realized she was ill-equipped to make the financial decisions she needed to make in order to take care of herself and her children. She was also dissatisfied with the kind of financial advice available at the time. Later, after gaining experience herself in the financial services and insurance industries, Anderson became convinced that a more values-based approach could help people better connect their money to their lives. According to the Lifework$ Collective’s white paper on “The Client-Centered Advisor,” available to download from the Lifework$ Web site, that connection is kept alive through the planner’s abilities “to temporarily put aside one’s own views and values … to listen effectively … to match what matters most to the client with the services you, as an advisor, can provide.”

For Anderson, the bottom line is that by being at the intersection of a client’s money and his or her life, the financial planner is in a unique position to play a role for positive change. “Through inquiry — asking questions that make the client look within and reflect — the planner can help the client identify goals that are truly meaningful,” she says. “The planner is then in a position to help clients use their money to make a life rather than using their lives to make money.”

- James Geary

As a veteran professor of finance, Somnath Basu has fielded a lot of questions over the years from people concerned about whether they have made the right money decisions. Basu noticed that a lot of these questions came from women, many of whom still have less access than men to financial information, especially in the low- to moderate-income demographic. There was, for example, the 83-year-old woman who had just been sold a variable annuity, Basu recalls, and the single mom who was putting all her money into a savings account to send her child to a school she knew she couldn’t afford. “I started getting concerned about the lack of basic financial literacy out there,” says Basu, director of the California Institute of Finance (CIF), at California Lutheran University in Thousand Oaks, CA. “I was also getting upset about the unethical practices that try to take advantage of this lack of information, too. So I decided to do something about it.”

That something is the CIF’s Center for Women, an online program to provide financial planning and financial literacy services to low- and middle-income women. The Center for Women project, which has been awarded a CFP Board grant, will cover the financial planning basics in an innovative online learning environment. Virtual, 20-minute classes will be available on everything from budgeting to getting out of debt to saving for college; women can follow these tutorials on their own or in small groups. The target audience comprises low-income women, caregivers, single mothers, underserved minorities and elderly women who may not have adequate retirement provisions.

There will also be a searchable list of Frequently Asked Questions (FAQs), so women with specific financial planning queries can find quick and comprehensive answers. If the answer to a question is not already on the site, users can submit the question via e-mail to graduate students in the CFP Board-registered program at California Lutheran University. The questions will be forwarded to the appropriate class, where they will be discussed and answered under the supervision of CIF faculty. Once the answer has been formulated, it will be e-mailed back to the person who originally asked the question and then added to the FAQ database.

Basu points out that this aspect of the Center for Women will serve low- and moderate-income women as well as the financial planning profession itself. “Students studying for an MBA in financial planning understandably want to serve high net worth clients,” Basu says, “and that’s fine. But there are also people in the community who need our help but can least afford it. Through this question-and-answer process, students will develop an understanding of the field based on real-life financial planning situations, and hopefully also build a strong community service ethic.” One of the goals for the Center for Women is to develop an easily-scalable infrastructure so that involvement in the project may eventually involve students and faculty at financial planning educational programs across the country.

But before the Center can help these underserved women learn about the basics of financial planning, it must reach them. To this end, Basu is seeking alliances with community organizations around the country — churches, day-care facilities, domestic violence shelters, senior centers, YWCAs — that work with underserved women. “We need to explore different avenues of reaching this population,” he says. “These are people who really need the unbiased information we can provide, so they can start making the right financial decisions for themselves.”

Those interested in learning more about the Center for Women project, especially those involved with a community group interested in helping underserved women learn more about financial planning, are welcome to contact Dr. Basu at basu@clunet.edu.

Read more about projects receiving funding through CFP Board’s 2007 Financial Planning Grants program.

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Much of the information shared between a CFP® professional and client in the early stages of the financial planning process is likely to take place through conversation, but it is important to memorialize vital pieces of that information in writing. Written documentation helps ensure that both client and planner have a similar understanding of key aspects of the client engagement. CFP Board’s ethical standards have long required that certain disclosures be made to financial planning clients in writing, and CFP Board’s revised Standards of Professional Conduct, which becomes effective July 1, 2008, adds a new requirement that a written agreement accompany any financial planning services or services that include material elements of the financial planning process.

Rule 1.3 of the Rules of Conduct states that if a CFP® professional agrees to provide a client or prospective client with services that include financial planning or material elements of the financial planning process, the services shall be accompanied by a written agreement (“Agreement”) that includes the following information:

1. The parties to the Agreement,
2. The date of the Agreement and its duration,
3. How and on what terms each party can terminate the Agreement, and
4. The services to be provided as part of the Agreement.

Rule 1.3 notes that the parties to the Agreement may be the CFP® professional and the client, or they may be the client and the certificant’s employer, depending on the manner in which the certificant’s business is structured. Rule 1.3 also notes that the Agreement may be provided to the client by the certificant or the certificant’s employer. The four basic terms that Rule 1.3 requires for a written agreement cover essential information about the client relationship that it is important for both parties to understand.

While the Agreement required by Rule 1.3 is a new addition to CFP Board’s ethical standards, CFP Board expects that many CFP® professionals already provide financial planning clients with written documents covering the basic terms required by Rule 1.3. For example, if a certificant provides a Form ADV or other disclosure to a financial planning client in compliance with state and/or federal law, or the rules or regulations of any applicable self-regulatory organization, and if that written disclosure includes the four basic terms required by Rule 1.3, that documentation will satisfy the requirements of Rule 1.3.

Rule 1.3 also states that the Agreement does not need to be a single document. If a CFP® professional provides multiple documents to a financial planning client that cover the four basic terms required by Rule 1.3, those multiple documents will satisfy the requirements of Rule 1.3. Some may find it useful to set up a separate written document covering the requirements of Rule 1.3. Others may find it more convenient to include with the written agreement the written disclosures of compensation, conflicts of interest and other information outlined in Rules 1.2 and 2.2.

A clear, well-defined written agreement with a financial planning client can help a CFP® professional avoid situations where a client may develop unreasonable expectations about the services to be received. If you have questions about Rule 1.3 and its requirement for a written agreement governing financial planning services, or if you have questions about other aspects of the revised Standards, please send them to CFP Board at mail@CFPBoard.org.

About the Revised Standards of Professional Conduct:
On May 31, 2007, CFP Board’s Board of Directors announced the adoption of a revised version of CFP Board’s Standards of Professional Conduct, which sets forth the ethical standards for CERTIFIED FINANCIAL PLANNER™ professionals. The revised Standards become effective July 1, 2008 and apply to the more than 55,000 financial planners in the U.S. who are authorized by CFP Board to use the CFP® certification marks. CFP Board encourages CFP® professionals to begin applying the revised Standards to their daily practice well in advance of the July 1, 2008 effective date.

Asha P. Williams Named as CFP Board’s Managing Director, Communications and Marketing

CFP Board has named Asha P. Williams as its new Managing Director of Communications and Marketing, effective October 18, 2007. Ms. Williams joins CFP Board with more than 20 years of high-level experience in the marketing field, and has authored numerous research reports on topics closely related to marketing. Prior to joining CFP Board, Ms. Williams served as Vice President of Marketing and Communications at the Society of Financial Service Professionals in Newton Square, PA, where she was a key member of the organization’s leadership team, helping to provide education, professional resources and ethical guidance to over 18,000 financial professionals.

In her new role, Ms. Williams will work to enhance public awareness of the value of financial planning and CFP® certification through integrated communications and marketing strategies. Key to that work will be establishing effective working relationships with organizations whose missions are aligned with CFP Board’s.

“Asha is a high-caliber communications professional whose experience will make her an asset to our organization,” said Kevin R. Keller, CAE, Chief Executive Officer of CFP Board. “We are pleased to have the benefit of her knowledge as CFP Board moves toward the next phase of its evolution.”

Ms. Williams’ career includes serving at MONY Financial Services, where she was responsible for managing marketing research, planning and product development functions for the group insurance division. She also served as a Vice President of Market Development at Beacon Corporate Benefit Services, where she developed the company’s strategic business plan, and led the marketing and communications campaigns. As a marketing and strategy consultant at Consortium Health Plans, Ms. Williams conducted market research and directed the marketing and sales promotional activities for the company. Ms. Williams holds a bachelor’s degree in Psychology from St. Xavier’s College in Bombay, a master’s degree in Psychology from Cornell University, and a Ph.D. in Educational Psychology from New York University.

“CFP Board’s long and distinguished history makes me proud to be joining its leadership team at this critical juncture,” said Ms. Williams. “As the organization progresses in its mission to serve consumers and be an effective regulator, I look forward to working with CFP Board’s leadership, financial planning professionals and especially the public.”

J. Barron Knight, Esq. Named as CFP Board’s Director of Professional Review

CFP Board has named J. Barron Knight, Esq. to the position of Director of Professional Review, effective immediately. Mr. Knight brings to CFP Board strong experience in handling enforcement actions related to all aspects of the financial services industry, most recently in his role as Special Counsel in the Office of Regulatory Policy at the Financial Industry Regulatory Authority (FINRA, formerly NASD), where his responsibilities included serving as lead counsel for the organization's Liaison Program, drafting policy and procedural guidelines for FINRA's membership application process, and providing advice on litigation strategy for FINRA's membership application disciplinary proceedings.

At CFP Board, Mr. Knight will direct professional review operations, coordinate investigations related to alleged violations of CFP Board’s ethical standards and work with CFP Board’s Disciplinary and Ethics Commission to conduct disciplinary proceedings.

“CFP Board is very pleased to have someone with Jay’s credentials and experience joining our organization,” said Kevin R. Keller, CAE, Chief Executive Officer of CFP Board. “His knowledge of financial markets and regulatory affairs will be instrumental to our leadership team, and his enforcement experience will benefit CFP Board’s ongoing work to uphold strong ethical standards for CFP® professionals.”

Mr. Knight is an attorney admitted to practice in the state of Maryland. He began his legal career as a staff attorney in the Securities Division of the Office of the Attorney General, Maryland, where he acted as a lead attorney on administrative and civil enforcement actions against investment advisers, broker-dealers, issuer agents and unregistered entities. From May 2002 to September 2005, Mr. Knight served as an Assistant Director in the Securities Bureau of the Department of Insurance, Securities & Banking for the District of Columbia, where he developed securities regulatory policies and managed and directed a division of examiners, investigators and attorneys. Mr. Knight also designed, executed and coordinated examination programs and enforcement actions involving broker-dealers, investment advisers, issuer agents and their employees.

“I am delighted to be joining this new team,” said Mr. Knight. “CFP Board has long promoted strong ethical standards for financial planners and maintained an active enforcement process. The recent updates to CFP Board’s ethical standards make them even stronger, with greater benefits for the public, and I look forward to being involved in their implementation.”

Results from July 2007 CFP® Certification Examination Released

Score results for the July 2007 CFP® Certification Examination were recently released to exam takers. The 2-day, 10-hour exam was conducted at 50 sites nationwide. 1,180 (51 percent) of the 2,307 individuals who sat for the exam in July received a passing mark.

CFP Board's CFP® Certification Examination requires full integration of knowledge covered in CFP Board's 89-subject financial planning topic list and is designed to evaluate one's ability to apply a comprehensive understanding of financial planning to real-life financial planning situations.

The next exam will be held November 16-17, 2007. The application deadline for the November 2007 exam is October 3, 2007. Read more about the CFP® Certification Examination.

March 2008 Exam Rescheduled

CFP Board has changed the dates of the March 2008 CFP® Certification Examination to March 28-29, 2008. The original exam dates (March 21-22) fell on Easter weekend. To ensure the availability of proctors and exam facilities, and to accommodate the examinees, CFP Board elected to move the exam dates back one week. All related deadlines for the March 2008 Exam remain the same, including the application deadline (February 6, 2008). Only the exam dates have changed.

Prior Year Tax Law to Be Tested on March CFP® Certification Examinations

Effective with the March 2008 CFP® Certification Exam, all exams administered in March will test over prior year tax law. The March exam administrations will provide the prior year tax tables and candidates will be expected to use prior year rates and limits with respect to retirement contributions, phaseouts, estate tax and annual exclusion.

Historically, the March exam administrations provided prior year income tax tables, but candidates were expected to use current year rates and limits with respect to everything else (retirement contributions, phaseouts, estate tax, annual exclusion). CFP Board’s Council on Examinations made the modification at its September 2007 Council meeting in an effort to eliminate confusion for candidates.

Examples of the tables provided to exam takers can be found at: www.CFP.net/become/taxtables.asp.

Employment Opportunities at CFP Board’s Washington Headquarters

CFP Board seeks to fill several important positions at CFP Board’s Washington, D.C. headquarters, including Director of Examinations, Director of Education and Director of Public Policy. CFP Board’s new office in the nation’s capital offers employees the unique chance to join an established organization as it moves toward operational excellence and increased influence under new leadership. Interested individuals are encouraged to learn more about available employment opportunities at www.CFP.net/aboutus/jobs.asp.