Perhaps because he wrote a song about my father, I've always been partial to Pete Seeger. So, when I need an energy boost to overcome that "morning polio" feeling, I blast Seeger songs out of my iPod.

But I always skip John Henry. Now you'd think a song about the best railroad pile-driver of all times would be just the thing to kindle work ethic. But the song is a tragedy-despite Henry's amazing prowess, he is beaten in his race against the machine destined to replace all human pile drivers. Henry dies a broken man.

Although it seems obvious looking back, many people were slow to see the inevitability of machines replacing human labor on a massive scale. It is human nature to ascribe exaggerated permanence to current beliefs, habits and structures. But if history teaches anything, it is the constancy of change.

Technology is just beginning to have the same kind of profound effect on white-color jobs that machines have had on blue-collar ones. Consider these early facts and trends.

Real Estate

• In 1995 two percent of buyers used the internet to look for a home. So far this year 77% of buyers have used the internet to find a home and 25% of these found the home they ultimately bought via this means.
• Real estate Web site traffic is growing at twice the rate of internet traffic in general.
• 65% of sellers who post their homes on for-sale-by-owner Web sites are successful selling that way.
• In 2002 only 2% of brokers offered any alternative services such as flat fees or rebates, in 2005 11% of brokers did. And the author of Freakonomics predicts that in ten years there will be one third fewer traditional brokers as, to quote USA Today, the internet "has reduced the distance between the consumer and the real estate expert to the point where the consumer is so much more informed they don't need the expert that much."

Accountants

• In 2004 ten million tax returns were filed online.
• Individuals now spend $200 billion on PC software and $4 billion on internet-based services to help them prepare their own returns.

Financial Professionals

• Last year, 46% of bills were paid by check. So far this year 37% of bills have been paid by check as online bill payment rises rapidly.
• Costco and other retail shops offer financial planning, along with real estate, banking, investing and other services online.
• Two percent of retail sales were conducted by e-commerce in 2005.
• Broker-dealer fees have been steadily eroding and are now sometimes as low as a dollar a trade.
• Services such as Yodlee now offer free internet-based services allowing individuals to track all their financial information online.
• Reporters writing personal finance columns increasingly recommend dozens of different financial calculators to their readers to enable them to answer their personal finance questions themselves.

Medicine

• By 2007 there will be 1300 walk-in medical clinics in stores such as Wal-Mart and Target. These clinics effectively turn professional medical services into retail products-customers either have no wait at all or take a number and get beeped as they shop; they are seen by nurse-practitioners who use computers to track patient histories and research diagnoses and they walk out in minutes with treatments for a variety of illnesses. Retail health clinics charge a small fraction of what most doctors and emergency rooms do.
• Nursing homes are addressing the high cost of care by installing electronic sensors, trackers and computers to provide services previously provided by nurses.
• Two percent of doctors now use DDS (Diagnostic Decision Software).

Law Enforcement

• Since recently installing cameras to detect traffic violations, the District of Columbia has collected $111 million in fines without paying any traffic officers' salaries or benefits.

Architects

• In 2005 Americans spent $24 million on home design software such as Chief Architect and HGTVKitchenDesign.com.

Sports

• Sabermetricians are supplementing, altering and in some cases replacing judgments of coaches and recruiters-it is hard now to imagine a pro-sports coach without a headset connecting him/her to the number-crunchers.

Academics

• Scholarly journals are facing stiff competition from free Web sites, threatening to alter or undermine the peer-review system. Open access publishing now accounts for 1-2% of the market and the pressure from this competition allowed the University of California to extract a 25% price concession from the dominant academic publisher.

Attorneys

• Technology now allows individuals to comparison shop for attorneys online.
• Technology now allows individuals to acquire online forms to perform a variety of functions previously handled by attorneys.
• Technology allows firms to offer very low prices for services such as company incorporations, divorces and wills.

This isn't the first time the professions have faced a change. From their early origins in the late dark ages the professions-formerly known as guilds-have started, worked with or resisted developments around them. Guilds created many new systems, many of which professions still use. These include creating and enforcing standards of excellence, funding educational and professional programs, providing for widows and orphans of fellow professionals, exercising monopoly pricing power and excluding non-conforming individuals from their ranks.

Guilds' ability to shape professional life has gradually been reduced by a variety of changes. Free trade laws chip away at guild power and therefore guild protectionism. Trademark and copyright laws publicize the information that used to constitute guild trade secrets as a condition of awarding legal protection. Mass production techniques undercut monopoly pricing powers and standards.

What will technology's effects be on the professions? Among other things, it is rapidly becoming easier for individuals to obtain knowledge and analysis that was once held exclusively by professions. The effects of this transformation are just beginning, but because knowledge and analysis are at the core of what professions offer, it is hard to imagine technology's impact being small.

Luckily for financial planning, human involvement-and not just information and analysis-is essential if financial planning is to have an optimal effect on individuals' lives. Not surprisingly, leading researchers are cranking out large numbers of studies on how best to shape human financial behavior, not just human financial knowledge. The transformation of financial literacy into financial planning is a recognition of the central role human involvement plays in personal finance.

But if financial professionals are to use-rather than be replaced by-the technological equivalent of the pile driver, they need to be aware of, and prepare for this changing environment. CFP Board played a role in this at its recent annual meeting, and we expect to continue to do so going forward.

Sarah Ball Teslik

Not long ago, during a sabbatical at Stanford University, George Loewenstein rented a house in Palo Alto, California. House prices in northern California are high compared to Pittsburgh, where Loewenstein normally lives. Just down the road from Loewenstein's Palo Alto pad, a tiny home-barely larger than a garage-was on the market for $1 million. For the same money in Pittsburgh, Loewenstein reckoned you could buy a mansion. This observation sparked the idea that it would be possible to study the influence of "contrast effects"-the perception of "high" or "low" prices based on previously encountered prices-on people buying or renting homes. The research delivered a surprising result: Buying or renting a home, one of the biggest financial decisions most people make in their lifetimes, is often based on fleeting, irrelevant information that makes no real economic sense.

Contrast effects can be observed everywhere. If you pick up something heavy-say, a pile of bricks-and then pick up something much lighter-like a pile of books-the bricks will seem heavier than they actually are when contrasted with the books. Even animals exhibit contrast effects. In one study, grey jaybirds were divided into two groups: one group had to work really hard to get three raisins, while the second group was able to get a single raisin with little effort. Then the same two groups were offered raisins again; this time, though, the effort required from both groups was the same. In this second round, the harder working birds still worked harder for the raisins-even though the task was much easier. In other words, they put in more effort than required because that was their experience the first time.

The same thing happens with house prices. "People don't react to absolutes," says Loewenstein, a professor in the Department of Social & Decision Sciences at Carnegie Mellon University in Pittsburgh. "A number is always compared to other numbers. So when moving to a new city, people automatically compare house prices with the prices in the city they are moving from. When prices seem comparatively low, people will buy more expensive homes. Even if they don't need an extra room, for example, they will buy a house with an extra room anyway because it seems cheap. When prices seem comparatively high, people won't buy a house with an extra room-even if they need it-because it seems too expensive."

It makes more economic sense for buyers to familiarize themselves with prices in the new city, and then make their choice based on their needs and budget. So when moving to a new city, buyers would be better served by deciding what kind of house they need-say, three bedrooms-and then comparing the prices for three-bedroom houses in different parts of the city. If the price difference for a three-bedroom house in a nice versus a less-nice part of the city is $50,000, a buyer might ask him- or herself: Am I better off investing that $50,000 in a house in a nicer neighborhood or are there other ways (savings, education, vacations, etc.) to use the cash? But that's not the question the folks in Loewenstein's study asked themselves.

Loewenstein's research, carried out with Uri Simonsohn of the University of Pennsylvania and published in The Economic Journal , examined 650 movers among more than 170 U.S. cities. Significantly, money turned out to be no obstacle. People moving from higher- to lower-priced areas picked more expensive homes and people moving from lower- to higher-priced areas picked less expensive homes-regardless of their income levels. "Economics assumes that people pay attention to absolute prices," Loewenstein says. "This research shows that they pay attention to relative prices."

Loewenstein's findings also challenge another longstanding assumption: that people become more price-sensitive over time as they adjust spending in response to rising or falling prices. But the housing study found that, in some cases, the opposite occurs. If prices change suddenly (as happens when moving between cities with drastically different house prices), people initially react dramatically (by picking a more or less expensive home). But over time, as people get used to the new prices, that reaction is smoothed away. When the subjects in Loewenstein's study moved again within their new city, those from more expensive areas moved to cheaper housing and those from cheaper areas moved to more expensive housing-again, regardless of their income levels. Why? Because they had adjusted to the prices in their new hometown and were buying or renting accordingly. "People will be less influenced over time by housing costs where they lived previously, and bring their spending in line with the housing market in their new city," Loewenstein says.

Loewenstein draws an analogy between housing prices and gasoline prices. "Gas prices are high now compared to a year ago," he says. "But if they stay at this level for another year, consumers will come to regard them as normal. So you'll find that people try to cut back on driving as an immediate reaction to higher prices. But as the higher prices begin to seem normal, they return to their old driving patterns."

Loewenstein's findings have interesting implications, both for individual consumption patterns as well as economic policy. If, for example, long-term term demand for gasoline is actually less price-sensitive than short-term demand, then consistently high gas prices are unlikely to deter people from driving or buying gas-guzzling SUVs. (So much for getting global warming under control.) And if, as the housing study shows, contrast effects have such a powerful influence, then consumers will need to think very carefully-and make the right price comparisons-before embarking on any major purchases.

- James Geary

Diane was living in a car with her small child when Richard Conn first met her. She was destitute. She didn't have a job, a home-or a future. She didn't know where to turn for help. Fortunately, Diane was referred to Partners in Housing (PIH), an organization that provides transitional housing and educational tools to homeless families with children in the Colorado Springs, CO area. Richard Conn is its executive director. PIH gave Diane a house. Over the next couple of years, she completed PIH's life skills course, enrolled in a community college, graduated with honors, and found a job. She joined the PIH board, serving on it for six years, including a stint as president. (That meant she was Conn's boss for a while!) Now, Diane owns her own home and is living proof of the difference PIH can make in the lives of homeless people.

With the assistance of a grant from the CFP Board, Partners in Housing intends to go on helping people like Diane by providing lessons and advice on financial management. "The people we work with are often deserted by their husbands or partners, some are survivors of domestic violence," Conn says. "Many of these women have never had financial responsibility before. When the husband leaves, they ask themselves, 'How am I going to deal with money questions?' And they are often so focused on other issues-like basic survival-that they continue to make lousy financial decisions."

There are a lot of people in Colorado Springs who need the kind of help PIH can offer. According to the organization's statistics, there are some 6,000 families with children living below the poverty line in the area; more than 60% of these families are headed by a single mom. Mothers with two children typically receive $356 a month in federal assistance, but the average rent for a two-bedroom apartment alone is over $500 a month. The women referred to PIH need help to make ends meet. "We often start from scratch," Conn says, "helping people set smart priorities. This can be as basic as, first pay the rent before buying cable TV. Financial education and planning are essential to success and self-sufficiency."

People coming to PIH are first given transitional housing for a period of up to two years. They are then provided with a family case manager, who assists in obtaining everything from health care and educational advice to job training and budget counseling. CFP Board grant will help PIH expand and enhance its self-sufficiency program to encompass financial management topics like how to buy a home, how to save, and how to make investments. The funds from CFP Board will also contribute to establishing a financial management educator position at PIH. The job will entail handling the financial management workshops and helping people plan their futures by, for example, enrolling in an Individual Development Account (IDA) savings program. The goal of all these initiatives is the same: to help people achieve financial literacy so they can start helping themselves.

PIH always refers to the people it works with as "partners" rather than clients. "We sit down together and work with them, not for them, to help build better lives for themselves and their children," Conn says. "Our goal is to expose people to more sophisticated economic skills, get them refocused on their futures and reconnected to the community." In other words, PIH can help partners like Diane find a house-and together they can make it a home.

Read more about projects receiving funding through CFP Board's 2006 Financial Planning Grants program.

Exposure Draft of Proposed Revisions to CFP Board's Ethical Standards: Comment Period Ends September 25, 2006

CFP Board welcomes your comments on its Exposure Draft of proposed revisions to CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Practice Standards. Read the Exposure Draft at www.CFP.net/aboutus/Exposure_Draft.asp and send your comments to CFP Board by e-mail to mail@CFPBoard.org or by mail or fax. The comment period ends September 25, 2006, and CFP Board's Board of Governors will consider the received comments at its October 2006 meeting and determine what further action to take with the proposed revisions.

One of the proposed changes in the Exposure Draft that has received much comment is the proposal of a default fiduciary duty of care to clients. CFP Board's current ethical standards require CFP® certificants to be fiduciaries only when they take custody of client funds for investment purposes (current Rule 103e). The default standard in CFP Board's current Code is to "exercise reasonable and prudent professional judgment in providing professional services" (current Rule 201). For financial planning practitioners, the current Code sets forth an additional standard to "act in the interest of the client" (current Rule 202) as well as a suitability standard for financial planning practitioners who implement investments (current Rule 703). The Exposure Draft proposes raising the default duty of care standard to the fiduciary level and also proposes requiring that the duty of care standard agreed upon by the CFP® certificant and client be stated in a written agreement and be discussed between the parties.

The Exposure Draft is the result of much effort by many people who care deeply about clients, CFP® certificants and the financial planning profession, and the proposed revisions were intended to maintain or increase the strength of CFP Board's ethical standards and present them in a clearer, more concise format for the benefit of CFP® professionals and their clients. But we know that each person holding CFP® certification has experienced unique client relationships that provide invaluable perspectives on how standards can add value to or detract from a financial planning practice. We look forward to hearing those perspectives and learning about which elements of the proposed revisions would affect individual practices. Please take time to consider the Exposure Draft and provide CFP Board with your thoughtful feedback by September 25, 2006.

Revised Guide to Use of the CFP® Certification Marks Released:
Regional Trademark Education Initiative Focuses on Atlanta

CFP Board's Trademark Department is pleased to announce the release of an updated Guide to Use of the CFP® Certification Marks (Marks Use Guide).

The new Marks Use Guide introduces several changes to the guidelines for use of the CFP® marks. The most significant update is the requirement that the appropriate trademark symbol be used with all appearances of the CFP® mark and the CERTIFIED FINANCIAL PLANNER™ mark. This update and the others align CFP Board's trademark usage guidelines with current trademark law and help protect the value of the CFP® certification marks.

The revised Marks Use Guide is also intended to make correct trademark usage easier and more understandable for CFP® certificants. For example, while the CERTIFIED FINANCIAL PLANNER™ mark still must be followed by an approved noun when used in a sentence ("John Doe is a CERTIFIED FINANCIAL PLANNER™ professional."), it is now acceptable to use the CERTIFIED FINANCIAL PLANNER™ mark without an approved noun when it directly follows a CFP® certificant's name (i.e. "John Doe, CERTIFIED FINANCIAL PLANNER™").

The updated Marks Use Guide also adds a sixth noun to the list of approved nouns that may follow the CFP® mark and CERTIFIED FINANCIAL PLANNER™ mark when they are used in a sentence. The approved nouns are "professional," "practitioner," "certificant," "certification," "mark," and the new noun, "exam."

Additionally, the mark will no longer be referred to as the "flame logo"; instead, it is now referred to as the "flame design." As a certification mark, the flame design must be used in conjunction with a CFP® certificant's name, and not as a separate "logo." We hope the change of name eliminates some confusion about the nature of this trademark.

In addition to releasing the revised Marks Use Guide, CFP Board's Trademark Department is gearing up a Trademark Education Initiative by focusing efforts on the Atlanta, Georgia area during the month of September. Those of you in the Atlanta area may be contacted by CFP Board staff for a review of your use of the CFP® marks in your business materials. Each month we will announce a new regional area in which CFP Board will work with CFP® certificants to correct misuse and unauthorized use of the CFP® marks.

Proper use of the CFP® marks is important to insure that CFP® certification continues to represent standards of excellence for personal financial planning. If the CFP® marks were used improperly and if CFP Board did not take reasonable action to correct the misuse, trademark protection could be lost, and CFP Board could lose its authority to stop persons from using the marks without having first met CFP Board's high standards. We hope you'll take time to become familiar with the updated Marks Use Guide and apply its rules and guidelines when developing materials that feature the CFP® marks.

CFP Board's Trademark Department is available to answer questions or review materials, and we welcome any feedback on the updated Marks Use Guide. Send your questions, materials and comments by e-mail to mail@CFPBoard.org or by fax to 303-860-7388.

Report of Education Task Force Released

CFP Board's policy-setting body, the Board of Governors (Board) reviews CFP Board's core operations on a regular, rotating basis upon the belief that a regular review promotes excellence. In 2006, the Board selected for review CFP Board's involvement in education and assembled a high-level Education Task Force, comprised of individuals both inside and outside the financial planning profession. The Task Force was charged with the task of reviewing CFP Board's current educational goals, standards and practices, comparing them to those of other certification bodies and to models of best practice, and providing its findings and recommendations to the Board.

After conducting its review, the Task Force affirmed that education is an important, stand-alone component of the four "E"s of CFP® certification. The Task Force also presented the Board with several recommendations and considerations, including recommendations to strengthen the standards for review and accreditation for CFP Board-Registered Programs, to foster connections between the academic community and the professional planning community and to encourage opportunities to promote and advance the optimal use of technology in its educational activities.

The Report of the Education Task Force is available for download and review. Comments about the Report may be sent to CFP Board at education@CFPBoard.org by November 1, 2006.