Are you looking for an excuse to go to the beach? Here are several.

CFP Board's Board of Governors, looking for ways to encourage better communication and coordination among its various stakeholders, is holding an Annual Meeting for all of them. This is an opportunity for anyone interested in CFP Board to attend and make a difference.

What will be happening at the Annual Meeting? The Board of Governors as a whole will, for the first time, have meetings with each of its full sub-boards-the Board of Examiners and the Board of Professional Review. The governors will also all meet with the Program Directors, international affiliates of Financial Planning Standards Board Ltd., key regulators and policymakers, former governors, representatives of major employers, and anyone from the public wishing to attend the general session. We hope that each of these groups will make the most of the opportunities to network with the other groups.

One meeting will also provide opportunities to discuss CFP Board's two major policy initiatives-the report of the Education Task Force and the Exposure Draft of proposed revisions to CFP Board's Financial Planning Practice Standards and Code of Ethics and Professional Responsibility. These discussions will be part of the Board of Governors meeting held the morning of Saturday August 5. This meeting is open to the public, and anyone interested in attending is encouraged to do so.

Finally, in an effort to further CFP Board's mission and raise public awareness, the annual meeting includes a free financial planning clinic for the public, an event that is already receiving good press attention.

All of these events will take place in Santa Monica and Los Angeles, just a short distance from the beach.

As the Board of Governors shapes its agenda for 2007, they are interested to see how valuable CFP Board's stakeholders find these opportunities. If this type of meeting is something you value and would like to see repeated, please register online at www.CFP.net/register and join us. We hope to see you there. And remember, wear sunscreen.

Sarah Ball Teslik

Inspired by the book How I Made $2 Million in the Stock Market by a former ballet dancer, Jason Zweig bought his first shares-in a conglomerate called MacAndrews & Forbes-in 1976, when he was 16. At the time, there were only two ways for Jason to find out how his investment was doing: read the morning paper or call his parent's stockbroker. His parents wouldn't allow him to talk to their stockbroker, so he ended up scanning the paper. Back in 1976, he got his market information from the Albany Times-Union once a day, five times a week. Today Jason, along with anyone else who wants to follow the markets, can track his investments 24 hours a day, seven days a week on the Internet. The standard stock market data feed is updated at least three times a minute. And that's exactly the problem.

"The financial markets have become like video games that anyone can play or watch," says Zweig, an investing columnist with Money Magazine and author of the forthcoming book Your Money and Your Brain: How the New Science of Neuroeconomics Can Make You a Smarter Investor. "Instead of a static snapshot, we have a film. That focuses people's attention on the changes rather than the constants. People see the movements in price and think the market is predictable." Trouble is, it's not. So why is the allure of prediction so strong? Why do we find it so difficult to resist the appeal of a "sure thing," whether it's a method for winning at roulette or consistently making blockbuster investments? Blame it on the brain.

Our brains evolved to detect patterns. We're obsessive about it. Why? Because being able to detect patterns is basic for survival. If our ancestors weren't able to work out, for example, that people who ate a certain plant (say, poison hemlock, which can be mistaken for parsley) always seemed to drop dead after dinner, we wouldn't have managed to clamber very high up the evolutionary ladder.

Our brains are always prospecting for pattern. Zweig describes a study carried out at Duke University in which researchers showed people randomly generated sequences of circles and squares. Whenever two consecutive circles or squares appeared, the subjects' nucleus accumbens-the part of the brain that's active whenever a stimulus repeats itself-went into overdrive, meaning the participants expected a third circle or square to continue the sequence. (This impulse is behind the old proverb "Things comes in threes"; once is chance, twice is coincidence, thrice is pattern.) In fact, the brain is so fanatical about pattern that it will even supply patterns where none exist. Look at the figure provided by this link. Three wayward Pac men and three pointy brackets are what's actually there; what we see, however, are two overlapping triangles. The brain supplies the missing information to complete the pattern.

What's this got to do with predicting the markets? The nucleus accumbens also happens to be one of the central relay stations in the brain's "reward circuit," the system that sends us a jolt of pleasure whenever we accomplish something that enhances our chances of survival. The sense of satiety after a meal, the deep joys of parenthood, even the adrenalin rush after closing a big deal-that's your nucleus accumbens rewarding you for a job well done. Predicting the market would give us a double high-the primal pleasure of detecting pattern and the delight of making money.

"Pattern recognition is an ancient ability of the brain that works well from an evolutionary point of view but not so well in modern financial markets," says Zweig. "Financial markets are full of patterns but not so much permanent predictability. Markets are chaotic, it's difficult to find the reliable patterns, but you get a huge charge when you're right. That's what keeps people coming back for more and more predictions."

So how do we kick what Zweig calls "the prediction addiction"? The first step is to take some advice from that great philosopher and financial analyst Yogi Berra, and admit "Prediction is very hard, especially when it's about the future." Then it wouldn't hurt to listen to economist Peter L. Bernstein, author of Against the Gods, a history of financial risk. "Survival is the only road to riches," he told Zweig in an interview for Money. "Surprise and shock are endemic to the system, and people should always arrange their affairs so that they will survive such events. They will end up richer that way than [by] focusing all the time on getting rich."

- James Geary

As we bask in the afterglow of the July 4 fireworks, tending old softball wounds and nursing new barbecue burns, let us take a moment to reflect upon the "unalienable rights" on which America was founded: "life, liberty, and the pursuit of happiness"-and the freedom to make money.

Few of us ever take the trouble to read further than the first few stirring sentences of the Declaration of Independence. But if we did, we would realize that the American Revolution was as much about money as it was about liberty and democracy. About halfway through the document, in the middle of a catalogue of other grievances against the British, the authors cite "cutting off trade" and "imposing taxes on us without our consent" as reasons for declaring independence. In fact, most of the Founding Fathers, including George Washington and Thomas Jefferson, were wealthy landowners or businessmen who had become increasingly outraged by Britain's interference with their trade. It's not for nothing that "No taxation without representation" was one of their rallying cries. Money-making it and spending it-has remained something of a national pastime; one of the reasons, I suppose, we put President's faces on our currency. So in that same patriotic spirit, here is a brief history of what some great Americans had to say on the subject of money. Call it our nation's collective Declaration of (Financial) Independence.

Benjamin Franklin, one of the signers of the Declaration of Independence, famously wrote:

Neither a borrower nor a lender be.

But he certainly did not practice what he preached, at least when it came to coining aphorisms like this. Franklin often borrowed, paraphrased or simply plagiarized sayings from his favorite English and Irish authors, such as Dryden, Pope, Sterne and Swift. He recycled these maxims for use in Poor Richard's Almanack, which he began publishing in 1732. Franklin wrote the almanac under the pseudonym of Richard Saunders, an impoverished, absent-minded astrologer. In addition to horoscopes, weather predictions and lists of everything from county fairs to solar eclipses, "Poor Richard" intended the book to be studded with tips that "inculcated industry and frugality as the means of procuring wealth, and thereby securing virtue."

For Franklin, Poor Richard's Almanack clearly had the intended effect: It made him rich. Annual sales of the book remained a source of income and fame for Franklin for the next quarter century. When the last edition of the almanac appeared in 1758, Franklin compiled all of Poor Richard's dictums into a single speech, which he published separately as The Way to Wealth. It is a uniquely American document, in which Franklin argues that the pursuits of spiritual and economic happiness not only can be but should be combined. Franklin was fascinated by money, and kept returning to it as a subject for his sayings:

Frugality: Make no expense but to do good to others or yourself; i.e. waste nothing.

Content and riches seldom meet together.

The use of money is all the advantage there is in having money.

Having been poor is no shame, but being ashamed of it is.

These kinds of exhortations to industry and frugality are typical of American aphorisms about money. From the birth of the nation, Americans seemed to have an instinctive understanding that money makes the world go round, but that it wouldn't be much of a world if money were the only thing in it. So American financial maxims are always a mix of calculated business sense and old-fashioned practical morality. Here are two sayings of Thomas Jefferson's that illustrate the point:

Money, not morality, is the principle commerce of civilized nations.

Never spend your money before you have earned it.

And, of course, a bracing dose of homespun humor always helps keep our rising (or falling!) fortunes in perspective:

A fool and his money are soon elected. -Will Rogers

Money can't buy happiness, but it can make you awfully comfortable while you're being miserable. -Clare Boothe Luce

After Benjamin Franklin, Mark Twain is probably the most entertaining American aphorist on money. Twain and Franklin shared a healthy appreciation for the acquisition of wealth, but in practically every other respect the two men were complete opposites. Twain deliberately set out to overturn Franklin's cheerful advice with his own more ornery musings. As a result, whatever Franklin said, Twain said the reverse:

Early to bed, and early to rise, makes a man healthy, wealthy, and wise. -Benjamin Franklin

Do not put off till tomorrow what can be put off till day-after-tomorrow just as well. -Mark Twain

A good example is the best sermon. -Benjamin Franklin

Few things are harder to put up with than the annoyance of a good example. -Mark Twain

Franklin was a successful entrepreneur, but Twain never met a dodgy business proposition he didn't like. He poured money into things like "plasmon," a food additive extracted from dairy waste that never made it to market, and the Independent Watch Company of Fredonia, a business that never actually existed. Twain ended up earning and losing several fortunes in his lifetime, a predicament that undoubtedly led him to conclude:

The lack of money is the root of all evil.

Twain's financial musings are both funny and cynical, reflecting his belief that money did not always bring happiness along with it:

Prosperity is the best protector of principle.

Spending one's capital is feeding a dog on his own tail.

Unexpected money is a delight. The same sum is a bitterness when you expected more.

When it comes to money, though, it's always best to leave the last word to Benjamin Franklin (in an aphorism "borrowed" from the English essayist Francis Bacon):

A wise man will desire no more than what he may get justly, use soberly, distribute cheerfully and leave contentedly.

- James Geary's history of the aphorism, The World in a Phrase, was on the New York Times bestseller list. His blog on aphorisms is at: www.jamesgeary.com

As CEO of National Council on Economic Education (NCEE), a non-profit organization that promotes economic and financial literacy in schools, Robert Duvall is spokesman for the cause of making economic and financial education a core component of the pre-college curriculum.

Duvall will speak at CFP Board's 2006 Annual Meeting on August, 4, 2006 at the Los Angeles Convention Center. Read more about the meeting and register online at: www.CFP.net/annualmeeting

Below is an excerpt from a recent conversation with Duvall:

Robert Duvall: Last spring Lou Harris conducted a poll for us. One of the questions asked to high school graduates and their parents was, "What is an annuity?" Forty percent of the respondents couldn't say. How are you going to talk about privatizing Social Security and managing your own retirement plan if you don't know what an annuity is?

Sarah Ball Teslik, CFP Board's CEO: The survey raises the question of how you measure success.

RD: We're getting more specific at analyzing results. I think there are three levels. The first level is basic data collection: how many teachers did you teach, how many students, where did they come from, were they underserved populations? We have pretty good data for all of that. The second level is to say alright, you know that forty students were in that middle school class that was given by a teacher who was in one of your workshops, but did they learn anything? Did they get it? We have test instruments, which because of the demand for assessment and evaluation are in greater and greater current use by school districts.

Then there's the third level where, frankly, the NCEE and everybody else, as far as I know, barely has a toe in the water at the edge of the sea. And that is figuring out how to measure changes in behavior. And that's one of the major questions the NCEE is trying to think through and address right now. I'm excited about it. I think we're going to be contributing to that discussion in a significant way. So we know the first two are measurable, are there teachers teaching and to whom, and are the students learning something. Then the third step, six months later, have they opened a checking account, are they saving part of their allowances? That's the kind of thing we're just figuring out how to measure.

SBT: That's tough. I think of the teachers that have influenced my life, and sometimes it's thirty or forty years later when something in the back of my head, something they taught me, makes me act differently. How do you capture that?

RD: I think you can capture some proxy, some interim steps, as you will.

Read the complete conversation with Robert Duvall.

Health Savings Accounts (HSAs) with high deductible health plans are rapidly being introduced by employers in the workplace, with an estimated 70% of employers planning to offer them by next year. Myfinancialadvice, Inc. is conducting an online survey to understand your experience with HSA plans and the role they may play in financial planning in the workplace. The survey should take 5-10 minutes to complete, and the results will be published in next month's CFP Board Report. To take the survey, go to: www.surveymonkey.com/s.asp?u=413862304529

If you haven't yet registered to attend CFP Board's 2006 Annual Meeting in Santa Monica and Los Angeles, don't delay. While some of the events are free and open to the public, advance registration is required for others, including the Program Directors Conference, Firm Meeting, continuing education sessions and luncheon presentation with Pfizer Inc. CEO Hank McKinnell. The registration deadline for those events is July 19, 2006.

We're excited to add to the schedule for Friday, August 4, 2006 a breakout session with Harvard Professor of Economics, David Laibson, who will speak on the psychology behind spending. Professor Laibson's research has focused on macroeconomics and human behavior, and he is known for engaging and insightful presentations. In this session he will share psychological insights about why people spend and how bad spending behaviors can be changed. Read more about the breakout sessions.

If you can join us in California, we hope you'll also take time to attend the open session of CFP Board's Board of Governors meeting the morning of Saturday, August 5, 2006. During this session, the winners of CFP Board's 2006 Financial Planning Grants Program will be announced and there will be discussions of the report of the Education Task Force and the Exposure Draft of proposed revisions to CFP Board's Financial Planning Practice Standards and Code of Ethics and Professional Responsibility.

Register today for CFP Board's 2006 Annual Meeting at: www.CFP.net/register

Proposed Revisions to Code of Ethics and Practice Standards Scheduled for Release

On July 24, 2006, CFP Board will release for a period of public comment an Exposure Draft of proposed revisions to its Code of Ethics and Professional Responsibility and Financial Planning Practice Standards. CFP Board's Board of Governors (the Board) regularly evaluates CFP Board's core functions, summarized by the Four "Es": education, experience, exam and ethics. In 2005, the Board began a review of its ethics-related functions, benefiting from the input of many groups and stakeholders that had in recent years suggested improvements to CFP Board's ethical standards.

In addition to accepting written comments about the proposed revisions, the Board will hold a public discussion on the Exposure Draft at its meeting in Santa Monica, California on the morning of August 5, 2006. This meeting is open to the public, and representatives of a number of constituencies will be invited to speak during this discussion.

The Board will consider information received during this comment period at its October 2006 meeting. Further action will be at the Board's discretion.

Board of Appeals Affirms Disciplinary Action

CFP Board recently took public disciplinary action against Bruce L. Fleet of Greenwood Village, Colorado. The details of the discipline are outlined below.

REVOCATION

COLORADO
Bruce L. Fleet (Greenwood Village): In May 2006, CFP Board permanently revoked Mr. Fleet's right to use the CFP® certification marks. After a hearing, the Board of Professional Review found that Mr. Fleet 1) inappropriately invested his client's charitable lead annuity trusts in B shares rather than less costly A shares; 2) entered into a Letter of Acceptance, Waiver and Consent with NASD wherein he agreed to accept findings that he recommended that the client purchase mutual fund B shares, even though A shares would have given greater economic benefit, and wherein he consented to a 20 day suspension from association with any NASD member and a $5,000 fine; 3) used the CFP® marks from 1992 through 2004 while he was not certified and not authorized to use the marks; and 4) failed to comply with CFP Board's renewal requirements and continued to hold himself out to the public as a CERTIFIED FINANCIAL PLANNER™ professional. Mr. Fleet appealed the Board of Professional Review's findings; however, after a review of the record, Mr. Fleet's petition for appeal and CFP Board's response thereto, the Board of Appeals determined to affirm the findings and the discipline imposed.

This disciplinary action was taken by the Board of Professional Review, a board of CFP® certificants that interprets and applies CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Practice Standards as well as investigates, deliberates and takes appropriate action with respect to alleged violations. Public disciplinary actions taken by CFP Board, in order of decreasing severity, include permanent revocation of an individual's right to use the CFP® certification marks, suspension of the right to use the CFP® certification marks for up to five years, and letters of admonition.

Consumers can use CFP Board's Web site to check on a planner's disciplinary history and certification status with CFP Board.

Candidate Fitness Standards

The Board of Professional Review recommended and the Board of Governors recently approved specific character and fitness standards for candidates for certification to ensure an individual's conduct does not reflect adversely on his or her fitness as a candidate for CFP® certification, or upon the profession or the CFP® certification marks. CFP Board determined that such standards would also benefit individuals who are interested in attaining CFP® certification, as many candidates have indicated that if they had known that their prior conduct would bar or delay their certification, they would not have sat for the CFP® Certification Examination. These standards will become effective on January 1, 2007.

The following conduct is unacceptable and will always bar an individual from becoming certified:

• Felony conviction for theft, embezzlement or other financially-based crimes.
• Felony conviction for tax fraud or other tax-related crimes.
• Revocation of a financial (registered securities representative, broker/dealer, insurance, accountant, investment advisor, financial planner) professional license, unless the revocation is administrative in nature, i.e. the result of the individual determining not to renew the license by not paying the required fees.
• Felony conviction for any degree of murder or rape.
• Felony conviction for any other violent crime within the last five years.
• Two or more personal or business bankruptcies.

The following conduct is presumed to be unacceptable and will bar an individual from becoming certified unless the individual petitions the Board of Professional Review for reconsideration:

• One personal or business bankruptcy within the last five years.
• More than one judgment lien.
• Revocation or suspension of a non-financial professional (real estate, attorney) license, unless the revocation is administrative in nature, i.e. the result of the individual determining not to renew the license by not paying the required fees.
• Suspension of a financial professional (registered securities representative, broker/dealer, insurance, accountant, investment advisor, financial planner) license, unless the suspension is administrative in nature, i.e. the result of the individual determining not to renew the license by not paying the required fees.
• Felony conviction for non-violent crimes (including perjury) within the last five years.
• Felony conviction for violent crimes other than murder or rape that occurred more than five years ago.

Other matters that very rarely result in the delay or denial of certification will continue to be reviewed by staff and the Board of Professional Review under the current procedures, after the candidate has successfully completed the education, examination and experience requirements for certification. These include customer complaints, arbitrations and other civil proceedings, felony convictions for non-violent crimes that occurred more than five years ago, misdemeanor convictions, and employer reviews and terminations. CFP Board will continue to require candidates for CFP® certification to disclose certain matters on the ethics portion of the Initial Certification Application.

Individuals who have a transgression that falls under the "presumption" list must petition the Board of Professional Review for reconsideration and a determination whether their conduct will bar certification. The basic process for these reviews will be:

1. The individual will submit a written petition for reconsideration to Professional Review staff and sign a form agreeing to CFP Board's jurisdiction to consider the matter.
2. Staff will review the request to ensure the transgression falls within the "presumption" list.
3. If the transgression does not fall within the "presumption" list, i.e. falls in the "always bar" list, staff will so notify the individual.
4. If the transgression falls within the "presumption" list, staff will request all relevant documentation from the individual. A fee will be charged all candidates submitting a reconsideration request.
5. All of the relevant information will be provided to the Board of Professional Review for a determination.

The Board of Professional Review may make one of the following decisions regarding a petition for reconsideration:

• Grant the petition after determining the conduct does not reflect adversely on the individual's fitness as a candidate for CFP® certification, or upon the profession or the CFP® certification marks, and certification should be permitted; or
• Deny the petition after determining the conduct does reflect adversely on the individual's fitness as a candidate for CFP® certification, or upon the profession or the CFP® certification marks, and certification should be barred.

The Board of Professional Review's decision regarding a petition for reconsideration is final and may not be appealed, unless the relevant professional revocation or suspension is vacated or the relevant felony conviction is overturned, at which time the individual may submit a new petition.

Record Number of Registrants for July 2006 CFP® Certification Examination

CFP Board continues to see record numbers of registrants for the CFP® Certification Examination, with 3,223 individuals registered to take the exam on July 21 and 22, 2006. The last exam, held in March 2006, was taken by 2,607 individuals.

The final exam of calendar year 2006, to be held on November 17 and 18, will test for the first time the updated Topic List created as a result of the 2004 Job Analysis Survey.

The November 2006 exam will also be the last opportunity for those who wish to attain CFP® certification before the bachelor's degree requirement goes into effect in January 2007. Beginning in 2007, a bachelor's degree in any discipline will be required in order to attain CFP® certification. Applicants for CFP® certification who do not hold a bachelor's degree must have completed five years of relevant work experience and all of CFP Board's other certification requirements by December 31, 2006.

The registration deadline for the November 2006 exam is October 4, 2006, and applications may be submitted online at: www.CFP.net/become/examdetails.asp

CFP Board to Release Revised Marks Use Guide and Increase Enforcement Efforts

CFP Board will release an updated Guide to Use of the CFP® Certification Marks for both certificants and Registered Programs in the early fall. Not only will you find the Marks Use Guide has been shortened, but you will also find it more "user friendly" and understandable. We welcome constructive comments about the new version.

Along with the revised Marks Use Guide, the Trademark Department will renew efforts to educate CFP® professionals and Registered Programs on the proper use of the CFP® marks. We will be featuring a trademark usage rule each month in the CFP Board Report newsletter.

You can also expect an increase in enforcement of the trademark rules as CFP Board's Trademark Department begins to focus on specific regional areas. Each month, CFP Board will announce the region and will concentrate efforts on correcting misuse by certificants and Registered Programs, as well as seeking out and addressing unauthorized use and infringement of the CFP® marks in these areas.

We will still follow up on any tips we receive regarding misuse, unauthorized use and infringement, even if these violations occur outside the regional area we are currently focusing on. You may forward your tips to mail@CFPBoard.org.

As the owner of the CFP®, CERTIFIED FINANCIAL PLANNER™ and certification marks (the "CFP® marks"), CFP Board is responsible for ensuring that the CFP® marks are used appropriately and according to established legal standards by those who are authorized to use them. Failure by CFP Board in this regard could adversely impact the CFP® marks, possibly lead to cancellation and leave financial planners who meet CFP Board's stringent certification standards with no way to differentiate themselves from financial planners who have not received the certification.