The summer of 2009 has arrived with a burst of activity in our nation’s capital related to potential reforms of our financial regulatory system. Last Wednesday, President Obama unveiled a proposal for 21st Century Financial Regulatory Reform that addresses a broad range of topics. On Thursday, I had the honor of testifying on behalf of CFP Board at a joint hearing of the Department of Labor and Securities and Exchange Commission on the topic of target date funds.

Many recommendations in the President’s proposal focus on efforts designed to benefit and protect American consumers, and CFP Board and our partners in the Financial Planning Coalition have shared publicly our support of this consumer-focused approach to regulatory reform. One proposal the Coalition members were especially pleased to see is the recommendation that broker-dealers who provide investment advice be held to the same fiduciary standard that currently applies to registered investment advisors. The Coalition partners, and several other allied organizations, have been working to encourage policymakers to strengthen current regulations to ensure that all who provide financial advice are held to a fiduciary standard.

At the same time, we know there are some who will seek to define this fiduciary standard at a level that may not provide the public with the benefits they should expect from a true fiduciary standard of care. We will continue our efforts to ensure that any fiduciary requirements established for financial advice are set at a bona fide fiduciary level. And we will continue to encourage policymakers to establish an oversight board for financial planners and to develop baseline standards of training and ethics for all who provide financial advice to the public.

As I listened to the testimony given at last week’s hearing on target date funds, I received a clear reminder of the importance of CFP Board and our Coalition partners having a voice in policy discussions. The vast majority of the panelists at the hearing represented companies involved in offering or managing the types of investments under discussion. They were able to discuss the technical features of these investments and the detailed legal disclosures in the prospectuses for these investments. They were able to provide figures and research on the management and use of target date funds.

What they didn’t provide, and what I believe we as financial planners are uniquely able to express, is firsthand experience of how individual consumers approach these investments, how they interpret (or misinterpret) different features of these investments, and the purposes for which consumers actually use these types of investments. The knowledge we gain through our conversations with clients, and the increasing understanding and trust that develops through ongoing financial planning relationships with clients, goes well beyond the analytical data that can be gathered through surveys. Our knowledge is valuable and compelling, and I strongly believe that any efforts to enhance protections for consumers of financial products and services must include the perspectives of financial planners and their clients.

Regardless of your level of engagement with the latest developments in Washington, I expect that the first half of 2009 has been equally busy one for you and everyone else involved in the financial planning profession. Turbulence in the economy has lessened to some degree, but that hasn’t lessened the need for us to keep current on the latest developments or reduce the importance of keeping communication with our clients frequent and open.

CFP Board is committed to keeping communication open with our stakeholders, especially CFP® certificants and other professionals who support the CFP® certificant community. Next month, on July 13-14, Kevin Keller and I will host CFP® Certificant Connection receptions and meetings in three cities in California: San Diego, Los Angeles and San Francisco. At these events, Kevin and I will be able to provide updates on CFP Board’s latest activities. More importantly, we’ll be there to listen. Attendees will be able to share their questions and raise topics of importance to them. We expect a lively and open discussion, and I hope you will be able to join us.

For those of you not in California, we will also be holding a Business Update Webinar on July 14 at 1:30 p.m. (Eastern Time). As with the CFP® Certificant Connection events, a primary purpose of the Business Update Webinar is to allow us to hear from CFP® certificants and other stakeholders. Your questions and comments are especially valuable to CFP Board during this time of increased engagement with policy issues, and we welcome all the diverse opinions and perspectives within the financial planning profession.

Registration is now open for the CFP® Certificant Connection events and the Business Update Webinar. I look forward to catching up with old friends and meeting new colleagues at these events. Please make plans to join us and stay connected with CFP Board.

Marilyn Capelli Dimitroff, CFP®
2009 Chair, Board of Directors
CFP Board

Contact CFP Board’s Board of Directors at BOD@CFPBoard.org.

As a CFP Board stakeholder, you’ve received several updates in recent months on the work of the Financial Planning Coalition, CFP Board’s collaboration with the Financial Planning Association and National Association for Personal Financial Advisors to provide the financial planning profession with a clear and strong voice in the imminent policy and legislative debates on reforms to the regulation of financial services industry. We’ve appreciated the thoughtful comments we’ve received in response to the Case Statement for a national financial planning oversight board, as well as the enthusiastic support many of you have provided for the Coalition’s objectives.

CFP Board’s advocacy goals have been the focus of much attention and energy during 2009. But we’re well aware that any successes we hope to make at the legislative level need to be accompanied by broader public awareness of the financial planning profession and the value of CFP® professionals. Our advocacy and consumer outreach goals truly go hand in hand. I’d like to highlight for you some of CFP Board’s public outreach efforts.

I hope you’ve taken note of the caliber of the publications that have been listed more and more in the “CFP® Marks in the News” section of this newsletter. The Wall Street Journal, New York Times and Forbes are three of the nationally-recognized consumer publications that have been with increasing frequency the value of the CFP® certification requirements and the importance of working with CFP® professionals. CFP Board’s activities are frequently covered in the financial trade press, but our media outreach activities are specifically focused on media outlets and organizations with broad and established consumer audiences.

In late 2008, we began a Consumer Advocate initiative to supplement this media outreach. Our Consumer Advocate, Eleanor Blayney, CFP®, is providing a face and voice for CFP Board’s messages about the benefits of financial planning and the importance of working with professionals who hold CFP® certification. She has reached out to influential media outlets that have great potential to reach broader segments of the American public. Her compelling and accessible messages about financial planning and the CFP® certification have been featured by an increasing number of print and broadcast publications. Those of you who know Eleanor will surely agree with me that her passion for financial planning is contagious, and I am very pleased with the new opportunities and the momentum she has generated as our Consumer Advocate.

CFP Board is also working to continue and expand our Financial Planning Clinic program, which provides the public with free one-on-one consultations with volunteer CFP® professionals. This program, now in its fourth year, has reached thousands of consumers with information – and firsthand experience – of the benefits of financial planning. We will soon be announcing details of two Clinics to be held this September, one in Detroit, and another in Philadelphia.

The promotion of the Financial Planning Clinics, and their positive reception by attendees, has generated not only greater awareness of financial planning, but also requests from many for additional Clinics. During the past few months, we have been able to set up mini-Clinics at the events of several associations, government organizations and community-based organizations. We’ve also assembled a Financial Planning Clinic Toolkit for FPA Chapters, providing them with a step-by-step guide to hosting these events in their communities. The Financial Planning Clinic program has great potential to grow, and we continue to look for opportunities to make the planning and implementation of these events more effective for participants and the communities in which they are held.

CFP Board is committed to upholding the CFP® marks as the recognized standard of excellence for personal financial planning. All of us at CFP Board know how important it is that people in your communities understand what it means when they see the CFP® marks beside your name. In coming months, expect to hear much more about CFP Board’s consumer outreach activities and the successes we’ve had in reaching greater segments of the American public with information about financial planning and the CFP® certification.

Kevin R. Keller, CAE
CEO, CFP Board

Before they are allowed to carry passengers, licensed London taxi drivers must acquire what is known as The Knowledge, a detailed familiarity with the city’s main roads and principal sites. London is a confusing city, with lots of winding and convoluted streets, so it can take anywhere from two to four years to learn the 320 minimum required routes. Aspiring taxi drivers can often be seen out acquiring The Knowledge, puttering around on scooters with a big L (for Learner) decal affixed to the front as they cruise from neighborhood to neighborhood doing their trial runs.

Financial planners are a bit like London taxi drivers. They have their own version of The Knowledge, the 89 integrated financial planning topics needed to master the CFP® Certification Examination. The current economic landscape is even more convoluted than London, so planners need to know where their clients want to go and how to get them there safely, securely, and preferably without too many detours. Yet even as the recession highlights the crucial importance of financial planning for all consumers, the map of the profession is changing. Younger planners are looking for different career paths than their predecessors; educators are opening up new avenues of learning for their students.

In this first of two articles on transitions in financial planning, CFP Board Report examines the profession’s evolving career paths. Next month’s issue looks at education’s new terrain.

“The nature of the profession is such that students just out of college have a difficult time being taken seriously by older clients,” says Kacy Gott, CFP®, chief planning officer with wealth management firm Aspiriant in San Francisco and a member of the CFP Board’s Council on Education. “That makes it difficult to build a career on your own; it’s easier within an existing firm.”

For many aspiring graduates, that can result in a Catch-22 dilemma. They need the hands-on experience of working with actual clients to mature as planners, but firms may be reluctant to put them in positions that provide it—because they don’t have the hands-on experience of working with actual clients.

Fortunately, Gott sees a trend that may be able to bridge the gap. As the recession has roiled consumers’ investment and saving assumptions, Gott observes, bigger firms in particular have woken up to the need for a deeper financial planning offering. To meet this need, firms have started taking on younger planners, not in client-facing positions, but as support staff and subject matter experts who can provide context for the investment options on offer. This delivers a double benefit. It allows firms to respond to changing consumer demand, and it gives young planners a new path through which to gain that all-important client experience.

“Financial planning has hit a tipping point,” says Mark Kordes, CFP®, of UBS Private Wealth Management in Weehawken, NJ. “Demand from consumers is increasing rapidly. During the weak part of an economic cycle, there is always renewed focus on financial planning but now there's an accelerated demand that's commensurate with the economic environment we’re in.” Traffic to CFP Board’s Web site bears this out. The most frequently used feature on the site is the CFP® certificant search function; more than a million CFP® certificant searches were conducted in 2008.

Kordes already sees firms responding to consumers' changing demands. Whereas, in the past, bigger firms may have focused on salespeople and relationship managers, now they are looking at staff to take on traditional planning roles. The relationship manager still takes the lead, but he or she gets back up from people in investment and planning positions. The resulting “teaming effect,” as Kordes calls it, results in a broader, more comprehensive service for the client.

“You’re not going to put someone just out of school in front of a $6-million client,” says Kordes, who is also a member of the CFP Board’s Council on Education. “But the profession is evolving beyond the traditional role of meeting with the client, writing a plan, and presenting it to them. Big firms need ‘platform’ support—junior people in-putting data and modeling for experienced planners, evaluating software vendors and products, developing and delivering in-house training programs. A financial planning background and education are very much needed for all these positions.” These jobs also provide a route through which young planners can get face time with clients, under the supervision and guidance of more experienced colleagues.

Seasoned planners, too, are looking at a changing career landscape. There is a generational shift at work, in which financial planning’s founders are looking towards their own transitions, into that phase of life for which they have helped so many others prepare. That presents business owners and younger planners with both challenges and opportunities.

One of the challenges for owners is to transfer their businesses in a profitable yet affordable manner. Selling to a large firm could get top dollar, but it may not provide the same client experience they have worked to deliver. To remain independent, owners need to bring in younger planners and develop them with a view towards transitioning ownership. They may have to settle for a lower price—few young planners have the assets to compete on price with bigger firms—but they will preserve more of the personality and feel of their business. “Some of the old guard are taking that into account,” says Gott. “They are being asked one more time to act as a fiduciary for the client.”

From the start, the principals at Gott’s firm, Aspiriant, wanted to remain independent. They handle transition issues by gradually offering younger planners ownership stakes in the business, at a discount. This approach makes it easier for younger planners to buy in, while also encouraging them to continue building the business. “It’s difficult for planners right out of college to pay for partial ownership,” Gott says, “when they may be paying off college loans, buying a house, or starting a family. It’s easier for career changers, who may have other assets to help pay for the acquisition. But the earlier the transition process begins, the better it will be.”

One development that could help smooth the transition process, Gott believes, is the fact that career changers seem to be getting younger. “Career changers used to be in their 40s and 50s,” he says. “Now we’re seeing them in their late 20s and 30s. They’ve had a few years of professional experience and learned that what they really want to do is financial planning. They are hungry for work and for learning new things, and they still have lots of years to go. For older career changers, it won’t be long before they start thinking about their own transitions. So younger career changers could be a happy medium for some firms.”

Not everyone wants to own their own firm, of course. And that’s a good thing as far as Gott is concerned: “Having non-entrepreneurs is very helpful for the profession. If everybody was super-ambitious, it would put a great strain on the business.”

Michael Kitces, CFP®, director of research for Pinnacle Advisory Group in Columbia, Maryland, couldn’t agree more. As financial planning transitions from its pioneer phase to a more established phase, Kitces believes, it is attracting different kinds of people. “People who have been in the profession for the past 15 to 20 years have a unique personality type,” he says. “They are active entrepreneurs. They had to have significant entrepreneurial skills to succeed in the business. Among first-generation financial planners, these are the majority. Among the population as a whole, though, entrepreneurs are a tiny minority. The people coming into the profession now represent a broad slice of America, and the majority have no interest in being entrepreneurs.” (For more perspectives from younger planners, see Financial Planning: The Next Generation in the June 2008 issue of CFP Board Report.)

Kitces is convinced that young planners have a lot to offer, even though not all of them may be interested in the risks and rewards of ownership. Entrepreneurial planners should realize, Kitces says, that “you're running a business that has entry-level employees—and that’s important to your business. The next person you hire is not necessarily your replacement, not the person you’re going to build your business around for the next 15 years. And that’s okay.” There are many routes to success in financial planning; having a variety of different career paths can help young planners and career changers alike find the road that’s right for them.

Next month—Transitions II: Educating the Next Generation of Financial Planners

James Geary

CFP Board Proposes Establishing Industry Standards for Target Date Funds

Certified Financial Planner Board of Standards, Inc. Chair Marilyn Capelli Dimitroff, CFP® outlined CFP Board’s proposals to enhance consumer safeguards for investors who use target date funds, in testimony before a joint Securities and Exchange Commission-Department of Labor hearing on Thursday, June 18, 2009.

“Target date funds, appropriately managed, can be beneficial to investors. However, we have serious concerns that these funds are fundamentally misleading to investors because they are allowed to be managed in ways that are inconsistent with reasonable expectations that are created by titles used on the funds,” Dimitroff said.

Dimitroff told the panel that the SEC should amend Rule 35d-1 (the Investment Company Names rule), to include target date funds. She also recommended that the Department of Labor work with the SEC to establish industry-wide standards to stipulate an appropriate range of asset allocations for each date reflected in a target date fund.

Target date funds are investment vehicles that allocate their investments among various asset classes and automatically shift that allocation to more conservative investments as a “target” date approaches. This shift in asset allocation can vary significantly among funds using the same target date. In recent years, target date funds have grown increasingly popular in employer-sponsored retirement plans.

Noting that the use of a date in a target fund’s name carries with it an expectation that the fund would invest in a mix of investments appropriate for someone retiring, or nearing retirement, in the year signified by the name, Dimitroff told that panel that in 2008, the performance of target date mutual funds with 2010 in their name, had losses ranging from 3.6 percent to 41 percent.

“We believe that a loss of up to 41% of assets from a fund labeled 2010 is completely inconsistent with an investor’s reasonable expectation that his or her assets would not be subject to such high market volatility,” Dimitroff said. “It is not an answer to say that misleading fund names can be cured with effective disclosures. We must face the reality that disclosures are very often not read and more often not fully understood. Disclosures are simply not adequate to counteract the reasonable expectations created by a fund’s name,” she told the hearing.

“For these reasons, we recommend that the SEC amend its misleading names rule to provide that a target date fund’s name is a materially deceptive and misleading name unless the fund’s investments fall within an acceptable range of asset allocations consistent with its name,” she said.

Dimitroff went on to say that establishing industry standards for target date funds is especially important because target date funds are often the default investments for many individuals who enroll in 401(k) plans. “Appropriate ranges of asset allocations for target dates, based on reasonably accepted industry practices, can and should be established.” CFP Board has pointed to the Thrift Savings Plan Lifecycle Funds established for federal employees and members of the armed services as an example of the feasibility of setting reasonable industry standards for asset allocation in funds with specific time horizons.

“We urge the Department of Labor to work closely with the SEC to establish industry standards that will ensure target date funds are not misleading to consumers on either extreme – too much cash for the young investor or too much equity for the investor nearing retirement.” Dimitroff proposed that industry standards for ranges of appropriate asset allocations for target dates could be identified and established by a panel of experts in retirement fund allocations, including practicing financial planners who hold CFP® certification.

If efforts to put such standards into place are not undertaken or not effective, the Department should proceed on its own to regulate target date funds that are used in 401(k) plans, or, repeal such funds’ eligibility as qualified default investment alternatives in employer sponsored retirement plans, Dimitroff said.

Financial Planning Coalition Applauds Obama Administration’s Proposal for Regulatory Reform

On June 18, 2009, the Financial Planning Coalition released a statement announcing its support and appreciation for key elements of the President’s proposal for 21st Century Financial Regulatory Reform. The Coalition believes the President’s proposal demonstrates a clear commitment to heightened standards of transparency and accountability for providers of financial advice and increased consumer protections.

The Obama administration has long been expected to release a proposal for addressing systemic risks in the structure of our financial institutions and systems to avoid future situations of the type that helped create recent economic crises. The new proposal, released on June 17, goes beyond issues of systemic risk to address a wide range of consumer protection issues.

The President’s proposal calls for several initiatives designed to protect the interests of consumers, including re-writing standards for broker-dealers when providing investment advice, raising the current standard and aligning it with the fiduciary standard currently in place for registered investment advisers who provide investment advice.

“The Coalition applauds President Obama’s announcement of the Financial Regulatory Reform proposal and the commitment to establishing strong protections for consumers of financial products and services that is evident in the proposal,” said Marilyn Capelli Dimitroff, CFP®, Chair of Certified Financial Planner Board of Standards, Inc. “The proposal’s recognition that providers of financial advice must be held to a fiduciary standard is an important development that will have lasting benefits for American consumers. Given the increased responsibilities individuals hold for establishing their financial security, all Americans who seek professional financial advice deserve to receive services provided in their best interests.”

“The President’s proposals indicate the start of renewed attention to ways the financial service industry and our financial regulatory structures can best serve the public,” said Richard Salmen, CFP®, CFA®, CTFA, EA, President of the Financial Planning Association®. “But while the proposal addresses several important issues, it does not fill all gaps in our financial regulatory structure or address the baseline standards of competency needed to provide financial advice to the public. For example, a fiduciary standard for those registered as investment advisers or broker-dealers who provide financial advice does nothing to identify the baseline levels of training, examination or experience required to provide competent financial advice. Many individuals not registered as investment advisers or broker-dealers provide – or claim to provide – financial advice to the public without having met essential training or ethical requirements, often leading to narrowly focused advice based on product solutions instead of objective advice focused on the client’s long-term financial goals.”

“We strongly believe all financial intermediaries who provide financial advice must be held to a bona fide fiduciary standard that places the consumer’s interest first,” said Diahann W. Lassus, CFP®, CPA/PFS, Chair of the National Association of Personal Financial Advisors. “We believe that functional regulation of financial planning, which is currently unregulated, would fill a critical regulatory gap and improve the financial health of Americans. We look forward to working with Members of Congress, the Administration, and others as the legislative process moves forward in the coming weeks.”

The Coalition was formed in December 2008 to provide the financial planning profession with a strong, unified voice in anticipation of proposals for financial regulation reform, advancing the financial planning profession and enhancing consumer protection by encouraging regulations that will help the public identify those competent, ethical advice-givers who are subject to a fiduciary duty in the delivery of financial planning services. The Coalition has called for the establishment of a professional standards-setting oversight board for financial planners that would be subject to SEC authority.

Statement of Financial Planning Coalition Featured in Investment News

The May 17, 2009 issue of Investment News featured an Op-Ed statement by Marilyn Capelli Dimitroff, CFP®, Chair of CFP Board, Diahann W. Lassus, CFP®, CPA/PFS, Chair of NAPFA, and Richard Salmen, CFP®, CFA®, CTFA, EA, President of FPA, leaders of the organizations making up the Financial Planning Coalition. The statement focuses on the Coalition’s work to persuade policymakers in Washington that any revision of financial services legislation or regulation should include oversight of financial planning as a distinct profession and outlines key reasons behind the Coalition’s request that CFP Board be given a leadership role in creating an oversight body for financial planners.

Read the full Op-Ed at: http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090517/REG/305179977/

“Regulation in a Post-Madoff Environment”: Join CFP Board’s Managing Director of Public Policy at Forbes iConference, June 30

On June 30, at 1:30 p.m. (Eastern Time), Marilyn Mohrman-Gillis, CFP Board’s Managing Director of Public Policy, will participate in an interactive discussion of “Regulation in a Post-Madoff Environment” at Forbes.com’s Financial Advisor iConference. With the President’s financial reform package calling for more widespread application of a fiduciary standard for financial advice, many have questioned how different segments of the financial services industry will implement fiduciary-level standards for their services. The discussion will address regulatory reform issues relevant to investment advisers including the importance of fiduciary standards for all who offer financial advice to the public, as well as highlight some of the regulatory gaps that recent regulatory reform proposals may not have addressed. Marilyn will be joined on the panel by Diahann W. Lassus, CFP®, CPA/PFS, Chair of the National Association of Personal Financial Advisors, Barbara Roper of Consumer Federation of America, Brian Hamburger of MarketCouncil, and Dan Barry of the Financial Planning Association.

Forbes invites all CFP® professionals to attend this special online-only event and is offering CFP® certificants free registration to the iConference. The iConference, titled “Building Wealth with Innovative Ideas and Advice,” takes place June 29-30, 2009, and it features an impressive lineup of experts, including a keynote presentation by Steve Forbes and several sessions presented by notable CFP® certificants.

To receive complimentary admission to the iConference, register before June 26 and enter the promotional code CFP on the registration form. For more information on the iConference agenda and speakers, and to register, visit www.forbes.com/advisor.

In October 2008, Forbes.com partnered with CFP Board to offer a “Search for a CERTIFIED FINANCIAL PLANNER™ Professional” function on the Forbes.com Web site. The search function, which is identical to the search function available on CFP Board’s Web site, is available in the “Personal Finance – Adviser Network” section of the Forbes.com Web site and provides visitors to Forbes.com the ability to locate a CFP® professional in their area.

March 2009 Exam Results Released

Score results for the March 2009 CFP® Certification Examination were recently released to exam takers. The 10-hour, two-day exam was conducted at 50 sites nationwide. Of the 2,063 individuals who sat for the March 2009 exam, 1,079 passed, representing a pass rate of 52.3%. CFP Board's CFP® Certification Examination requires full integration of knowledge covered in CFP Board's financial planning topic list and is designed to assess a person's ability to apply financial planning knowledge to real-life financial planning situations.

Individuals who sat for the March exam were sent a hard copy of their score results by mail on May 13, 2009, and exam results are now available online through examinees’ online CFP Board accounts.

The next CFP® Certification Examination will be held July 17 and 18, 2009.

CFP Board Disciplinary Actions

In May 2009, CFP Board announced that it has taken public action against the following individuals' rights to use the CFP® certification marks:

Public disciplinary actions taken by CFP Board, in order of increasing severity, include letters of admonition, interim suspension, suspension, and permanent revocation. An Interim Suspension was issued to Kathy J. Gordon. A suspension of 1 year and 1 day was issued to David W. Schlossberg. Permanent revocations were issued to Shawn Dunn and J. J. Jaso.

The basis for each decision can be found below. Consumers may check on a planner's disciplinary history and certification status with CFP Board at www.CFP.net.

Interim Suspension

MARYLAND

Kathy J. Gordon (Snow Hill): In March 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board issued Ms. Gordon an interim suspension of her right to use the CFP® certification marks. The Commission decided that Ms. Gordon failed to prove, by a preponderance of the evidence, why her right to use the CFP® certification marks should not be suspended during the pendency of the investigation. CFP Board initiated the interim suspension proceedings following Ms. Gordon’s suspension by the Financial Industry Regulatory Authority (“FINRA”) and her Consent Order with the State of Maryland. Ms. Gordon posed an immediate threat to the public and her conduct impinged upon the stature and reputation of the marks due to the fact that she continued to represent herself as a CFP® certificant despite her failure to renew her certification in a timely manner. Failing to comply with all applicable renewal requirements is a violation of Rule 612 of CFP Board’s Code of Ethics and Professional Responsibility. Under the interim suspension order, Ms. Gordon’s right to use the CFP® certification marks is suspended pending CFP Board’s completed investigation, and possible further disciplinary proceedings.

Suspension

ILLINOIS

David W. Schlossberg (East Dundee): In March 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board suspended Mr. Schlossberg’s right to use the CFP® certification marks for one year and one day following its investigation of two separate matters: 1) Mr. Schlossberg was accused of theft of services by a provider of continuing education courses (“Provider”); and 2) a bankruptcy trustee (“Trustee”) accused Mr. Schlossberg of the fraudulent transfer of a debtor’s real property from the debtor to Mr. Schlossberg in a civil proceeding stemming from a bankruptcy. In the first matter, according to Provider, Mr. Schlossberg attended the course with a colleague and asked to be billed at the event. Despite repeated assertions by Mr. Schlossberg that the course was paid for by credit card, Provider claimed to have never received payment from him. During its investigation, CFP Board requested that Mr. Schlossberg verify the credit card he used to pay for the courses. Mr. Schlossberg never submitted such verification to CFP Board. A week prior to the hearing, Mr. Schlossberg amended his Answer to admit that he had, in fact, failed to pay Provider for the course. In the second matter, Trustee claimed that within two years of the filing of the bankruptcy petition, the debtor transferred his interest in two properties to Mr. Schlossberg. According to Trustee, this was done with the intent to delay, hinder, and defraud creditors. A Bankruptcy Court granted judgment in favor of Trustee and against Mr. Schlossberg and found that the transfer of the debtor's interest in real property was fraudulent. Therefore, the transfer was voidable, and Trustee was entitled to recover from Mr. Schlossberg the sum of $281,357.54, which represented the value of the Debtor's interest in the three properties received by Mr. Schlossberg. The Commission found that Mr. Schlossberg’s conduct violated Rules 102, 201, 602, 606(a)(b), and 607 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Articles 3(a) and 3(f) of CFP Board’s Disciplinary Rules and Procedures. Mr. Schlossberg’s suspension is effective from March 27, 2009 to March 28, 2010.

Revocations

INDIANA

Shawn Dunn (Highland): In March 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board permanently revoked Mr. Shawn Dunn’s right to use the CFP® certification marks. This hearing followed an earlier action by the Commission in December 2008, when the Commission issued Mr. Dunn an interim suspension of his right to use the CFP® certification marks. CFP Board initiated the interim suspension proceeding following Mr. Dunn’s conviction of twelve felony counts of tax fraud conspiracy and three felony counts related to Mr. Dunn’s individual tax returns. The convictions followed an undercover investigation by Internal Revenue Service (“IRS”) agents into a plan to market and sell sham foreign and domestic trusts that led to the federal indictment of Mr. Dunn and seven other defendants. Among the felony convictions, Mr. Dunn conspired to defraud the United States by impeding the IRS in the collection of tax revenue and conspired to aid and assist the preparation and filing of false returns on behalf of clients. After a hearing in February 2009, the Commission determined that Mr. Dunn’s conduct violated Rules 102, 201, 406, 606(a) and (b) and 607 of the Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Article 3(c) of Disciplinary Rules and Procedures. The Commission identified no mitigating or aggravating factors. The Order of Revocation regarding Mr. Dunn’s use of the CFP® certification marks took effect April 9, 2009.

MARYLAND

J. J. Jaso (Marriottsville): In March 2009, following a hearing by CFP Board’s Disciplinary and Ethics Commission (“Commission”), CFP Board permanently revoked Mr. J. J. Jaso’s right to use the CFP® certification marks. This followed CFP Board’s investigation of a complaint filed against Mr. Jaso by a client. The client also filed a complaint with the Maryland Securities Division (“Maryland”). Maryland’s complaint concerned a promissory note Mr. Jaso sold to his client in 1995 that was a $100,000 investment in a movie project. In 2006, Mr. Jaso signed a Consent Order with Maryland. After a hearing, at which Mr. Jaso declined to appear, the Commission found that: 1) at the time of the investment, Mr. Jaso did not provide his client with any information as to how the client’s money was actually used. Mr. Jaso also did not provide any risk disclosure documents to his client and did not tell the client that the investment was an unregistered security; 2) Mr. Jaso failed to inform the client about his own civil suit and award (on which he was not able to collect) against the movie production company which had a poor financial history. After the investment in the movie project, Mr. Jaso provided his client with a portfolio appraisal showing the investment’s value at $133,000, when apparently Mr. Jaso thought the investment was probably worthless. Mr. Jaso also continued to charge the client a 1% fee on the investment he apparently believed to be worthless; 3) Mr. Jaso commingled client funds with his own personal funds by combining his own $100,000 investment with his client’s $100,000 investment in order to become a movie producer; 4) Mr. Jaso identified himself as a CFP® certificant to his client during a time in which Mr. Jaso had relinquished his use of the CFP® marks; 5) Mr. Jaso failed to provide his client with any research results on the financial stability of the movie production company prior to making the investment for the client; and 6) Mr. Jaso made a false statement to CFP Board when he informed CFP Board staff that he had prepared a written financial plan for his client when, according to the client, no financial plan was ever prepared. The Commission found that Mr. Jaso’s conduct violated Rules 102, 103(d), 201, 601, 606(a), 606(b), 607, 701 and 704 of CFP Board’s Code of Ethics and Professional Responsibility and provided grounds for discipline pursuant to Articles 3(a) and 3(g) of the Disciplinary Rules and Procedures (“Disciplinary Rules”). Because Mr. Jaso failed to file an Answer to CFP Board’s Complaint, pursuant to Article 7.4 of the Disciplinary Rules, the allegations set forth in the Complaint were deemed admitted, and the Commission issued an Order of Revocation.

Getting the Word Out: Consumer Education Materials from CFP Board

The CERTIFIED FINANCIAL PLANNER™ marks demonstrate your commitment to excellence. Display the CFP® marks proudly, and share the values they represent, with Marks Education resources available exclusively to CFP® certificants on CFP Board’s Web site.

Educate your community about the importance of financial planning and the high standards of competent and ethical financial planning provided by CERTIFIED FINANCIAL PLANNER™ professionals with Marks Education materials and other resources, including:

• CFP® Marks Logo Downloads
• Financial Planning 101 Presentation
• Direct Mail Templates
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And let the world know you hold CFP® certification by wearing this handsome embossed lapel pin, with a blue and black mark on a silver-colored metal background. Available exclusively to certificants, the pin is available for $5.00 (shipping included). Download an order form from your online CFP Board account.

To access the online CFP® Certification Companion, login to your online account at www.CFP.net/login, then select “Tools & Resources.”

Financial Planning’s Top Dog: A Cautionary Tale on Questionable Honors

Despite the recent headlines on CBS Moneywatch.com and in Forbes magazine, the financial planning profession is not going to the dogs.

Colorado Springs, Colo., certificant, Allan Roth, CFP® recently reported in his blog, The Irrational Investor that his dachshund puppy had been honored as one of America’s top financial planners.

Roth had received what he called a “to whom it may concern” solicitation in the mail, informing him that he had been named a recipient of this “prestigious award,” and inviting him commemorate the honor by purchasing an award plaque. Roth's initial reaction was to dismiss the letter as a meaningless "honor" available to anyone who filled out an enclosed form and was willing to pay for the plaque. But the letter piqued his curiosity. The letter wasn't even made out to him, as he indicates in his blog. "Does it really need to be a person?” he wondered. So, he sent in the form, naming his puppy as the recipient, although he used his name and credit card information.

In short order, he received an acrylic desktop award, which carries the council's name and seal, as well as the word "excellence," and is inscribed with the name of the honoree: "Max Tailwager."

Word of Max’s distinction came just a few weeks after Forbes disclosed the elusive nature of Consumers' Research Council, the firm that promotes the financial planner list, and a related firm SDL Industries, that markets the plaques. The story reported that the council’s address on Pennsylvania Avenue, just blocks from the White House in Washington, DC, is a rented mail drop in a UPS store.

Although Roth’s spur-of-the-moment decision to have Max “honored” was an attempt to have a little fun, he has used the publicity to highlight the fact that not all “honors,” or credentials for that matter, are what they are cracked up to be.

Just as consumers are encouraged to seek out CERTIFIED FINANCIAL PLANNER™ professionals (the “top dogs”—of the financial planning profession), because of their education, experience and ethical standards, financial planners should be wary of any “honor” that sounds too good to be true.

Roth's blog noted that financial planners who display “an award that is offered without any legitimate selection process, are misleading the public.” Pointing out that many financial credentials can be obtained in a matter of a few days, or even a few hours, Roth went on to say consumers, “should check out the source of any credential or award before they hand over their nest egg. If it looks exaggerated, run and run fast.”

Good advice.

CFP Board does not sell lists of CFP® certificants to organizations such as Consumers’ Research Council. Pursuant to our stated policy on the release of CFP® certificant information (www.CFP.net/aboutus/legal.asp#information), CFP Board makes lists of CFP® certificants available only to education providers and associations related to the financial planning profession that offer legitimate services, and CFP® certificants may opt out of these lists at any time by selecting the "opt-out of third party communications" box located in the Contact Information section of their online CFP Board accounts, or by sending a request to mail@CFPBoard.org. If you receive a questionable solicitation that appears to be targeted to CFP® certificants, please contact CFP Board to share information about the solicitation.

Editor’s note: Allan Roth is the founder of Wealth Logic and the author of How A Second Grader Beats Wall Street. He teaches behavioral finance at the University of Denver and is an adjunct faculty member at Colorado College.

CFP Board Grant Recipient Profile: The University of Northern Colorado Monfort College of Business

Christine McClatchey, Ph.D., professor of finance at the University of Northern Colorado (UNC) Monfort College of Business, cites some statistics that would be funny if they weren’t so scary. One survey, McClatchey says, found that 80% of parents believed the educational system was preparing their children to handle finances in later life. But a survey of college students found that 90% of them relied on their parents for financial advice. “Parents, who usually haven’t been taught the basics of financial planning themselves, think their kids are getting the information at school,” McClatchey laughs. “But the kids are relying on the parents.”

The lack of financial planning education among young people is, of course, no laughing matter. Only three states currently require personal finance classes in high school, according to the Jump$tart financial literacy coalition. With the help of a grant from CFP Board, McClatchey and the Monfort College of Business (MCB) will make this kind of crucial information much more widely available among freshman entering UNC.

Most first-year students at UNC are required to take the First Year Experience class (FYE 108), which is designed to help them successfully integrate into academic and social life on campus. The CFP Board grant will enable UNC to make an online financial planning component a required part of the FYE 108 curriculum. “The content will be created by a combination of faculty, practitioners and students, so it will be designed for Generation Y by Generation Y,” says McClatchey, referring to those individuals born between 1982 and 2000. “The modules won’t be about retirement or mutual funds, but instead focus on things students see and think about every day. What happens to your credit rating if you pay your cell phone bill late? What is the difference between the average salary of a high school graduate versus a college graduate? The idea is to keep their attention on things they have control over.”

The financial planning curriculum will be based on MCB’s course on personal finance for non-business majors. Involvement by local CFP® volunteers will be a key part of the program. Students will be able to download the program and go through each of the modules, which will cover everything from credit and budgeting to insurance and choosing a career. Videos of current UNC students will introduce some of the topic areas.

The modules, designed to be completed by students outside the classroom, will sport a reporting feature allowing faculty to monitor progress. The ‘email my CFP® professional’ button will enable students to send questions to and receive answers from volunteer CFP® professionals. Once students have completed all the modules, CFP® professionals will take part in in-class Q&A sessions.

McClatchey and her team are also developing a stand-alone module for incoming students and their parents to go through during the summer before freshman year. “This will help them do a budget and establish ground rules,” McClatchey says, “so before they arrive on campus, students will have a financial plan. We also suggest monthly financial meetings between parents and students to see how they are doing and to keep the lines of communication open.”

More than 11,000 undergraduates study at UNC, and many of them face unique personal and financial challenges. Over 40% are the first members of their families to attend college, for example, and around 43% of freshmen qualify for need-based financial aid. The goal of the financial planning program is to give these kids, and the rest of the freshman class, the knowledge and skills they need to make smart financial decisions, both while studying and in later life.

One of the first lessons is, credit cards are debt. “Lots of folks don’t view credit cards as debt, so they don’t know how to manage them or what happens when they buy a TV on a credit card with no interest for six months,” McClatchey explains. “When they read the fine print, they see that if they don’t pay off the balance in full after six months the interest is retroactive. Or, if they only pay the minimum every month, they will never pay off the purchase since the monthly payments won’t even cover the interest.”

Typical feedback from older students who have sampled the course is, “‘I wish I had this information as a freshman!’” McClatchey says. “Many of our students are first generation college students. Their parents never went to college, and this is the first time they are making decisions on their own. We want to help them set up some ground rules for making those decisions, for deciding what it means to be financially healthy.”

CFP® Marks in the News

Finding Financial Advice in an Age of Bad Behavior
Credentials, [unlike memberships], are things like the CERTIFIED FINANCIAL PLANNER™ designation, which requires those who have it to pass a difficult exam. A Certified Public Accountant counts here, too. You can’t just pay to get these letters after you name; you have to earn them.

Ron Lieber
New York Times
June 5, 2009

Tips for the Budget-Phobic
The term [“buckets budgeting”] may be relatively new, but “the strategy isn’t different in many ways, conceptually, from some older ones,” says Eleanor Blayney, a CERTIFIED FINANCIAL PLANNER™ [professional] and consumer advocate for the Certified Financial Planner Board [of Standards]. Really, this is a modern update on “envelope budgeting” where housewives would divvy up the cash to run the household into different envelopes, says Ms. Blayney. “Bucket budgeting is like budgeting lite,” says Marilyn Spencer, a CERTIFIED FINANCIAL PLANNER™ [professional] with Rinehart and Associates in Charlotte, N.C. An itemized budget will provide a more accurate take on your finances, but for those with little time, bucketing “is a way of fooling yourself into thinking you have less money than you do,” says Ms. Spencer. “It’s a way of erecting a barrier between money that is to be used for one thing and money that is to be used for something else,” says Ms. Blayney.

Anna Prior
Wall Street Journal
June 1, 2009

Checking Out Your Financial Advisor
For Free: Many financial advisors hold the CERTIFIED FINANCIAL PLANNER™ credential issued by the CFP Board of Standards, a private agency in Washington, D.C. that also offers online searching.

Emily Lambert
Forbes Magazine
June 2009

10 Questions to Ask a Financial Advisor
“The first question most people ask financial planners is ‘What has your performance been?’” says Eleanor Blayney, CFP® and president of Direction$, LLC. Of the approximately 300,000 practitioners who claim to offer financial planning in this country, only about 60,000 have passed the examination, subscribed to the code of ethical conduct and accumulated the years of experience necessary to earn the CFP® designation. “Clients need to understand that’s really beside the point. Financial planning is not synonymous with investment advice,” Blayney says. Think of your planner as your “financial coach,” Blayney says, “a generalist who can put all the pieces together.”

Rosalind Resnick
Entrepreneur.com
May 26, 2009

Read these notable media references to the CFP® certification at www.CFP.net/certificants/marksinthenews.asp.

CFP Board’s media outreach efforts are greatly enhanced by the many CFP® professionals who are engaged in their own efforts to reach national and local media with the message of the benefits of financial planning and working with a CFP® professional. We appreciate all of you who help further awareness of CFP® certification across the country through your media contacts and your involvement in your communities.

Accomplishments of CFP® Certificants

CFP Board congratulates the following CFP® professionals on their professional activities and accomplishments:

Shak Hill, CFP®, CLU, ChFC, of Centreville, Virginia, for the recent publication of his third book, A Woman's Guide to Financial Planning: The Seven Essential Ingredients for Your Best Financial Recipe.

Carolyn E. Linnard, CFP®, of Kensington, California, is retiring this summer after 32 years in financial planning, at least 30 of those as a CERTIFIED FINANCIAL PLANNER™ Professional. Ms. Linnard was a member of the Southern Alameda County Estate Planning Council, holding all the offices on its board of directors, and was also Chairman of the City of Fremont Planning Commission and, later, Chairman of the County of Alameda Planning Commission. She has been for 50 years a member of the League of Women Voters and a member of the American Association of University Women.

CFP Board welcomes information about the activities and accomplishments of CFP® professionals. If you have information you would like to share with CFP Board, please contact us at mail@CFPBoard.org.

UPCOMING EVENTS

Registration Now Open for CFP® Certificant Connections in California: July 13-14, 2009 Marilyn Capelli Dimitroff, CFP®, 2009 Chair of the Board of Directors, and Kevin R. Keller, CAE, CFP Board's CEO, will host CFP® Certificant Connection receptions and meetings in San Diego, Los Angeles and San Francisco on July 13 and 14, 2009. These town hall-style meetings were designed to provide CFP® professionals and other CFP Board stakeholders with the opportunity to engage in dialogue on the topic of regulatory reform and other issues of importance to the CFP® certificant community. The events will be held in an open format to allow participants to address the topics of most concern to them, and to provide CFP Board’s leadership the chance to connect with CFP® certificant communities across the country. Don’t miss out on these special events. SAN DIEGO, CALIFORNIA Monday, July 13, 2009 5:30 - 7:00 p.m. (Pacific) The University Club Atop Symphony Towers 750 B Street, Suite 3400 San Diego, CA 92101 Registration LOS ANGELES, CALIFORNIA Tuesday, July 14, 2009 8:00 - 9:30 a.m. (Pacific) Hyatt Regency Century Plaza 2025 Avenue of the Stars Los Angeles, CA 90067 Registration SAN FRANCISCO, CALIFORNIA Tuesday, July 14, 2009 5:30 - 7:00 p.m. (Pacific) The City Club of San Francisco 155 Sansome Street, 10th Floor San Francisco, CA 94104 Registration < back to top

OPPORTUNITIES

Volunteer Opportunities: Contribute to CFP Board’s Mission As we enter the summer months of 2009, it’s not too early to make plans to share your talents and help CFP Board further its mission in 2010. CFP Board’s work benefits greatly from the generous contributions CFP® certificants and other stakeholders provide through volunteer service. Each year, we seek qualified candidates for open positions on our Councils and Commission. Ongoing opportunities also exist for short-term contributions to CFP Board’s disciplinary hearing process, the development of the CFP® Certification Examination and various committees and task forces for a wide range of initiatives. If you have interest in making a direct contribution to CFP Board’s work, please take time to complete a volunteer application form. Applications will remain on file with CFP Board, and you will be notified when specific opportunities related to your qualifications and interests become available. Learn more about current volunteer activities and download application forms at www.CFP.net/aboutus/opportunities.asp. < back to top

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