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CFP Board


August 30, 2012

 

Study: CFP® Certification Provides Value to Clients, Firms & Financial Professionals

New research by Aite Group shows that CFP® certification can be a key differentiator for firms and individual financial professionals looking to improve the quality of their advice and provide additional value to clients.

According to the new research – “Adding Expertise to a Financial Advisor’s Practice: Measuring the Contributions of CFP® Professionals” – Aite Group took an in-depth quantitative look at how CFP® certification impacts a financial professional’s performance and contributes to his or her firms’ and clients’ success. Aite Group examined this impact across multiple business models (broker-dealer, RIA, insurance) and firm sizes.

Key findings of the research, which was commissioned by CFP Board, include:

  • While 20 percent of all financial advisors hold the CFP® certification, more than 70 percent of all team practices have at least one CFP® professional, providing a holistic view of clients’ finances;
  • 87 percent of clients who work with a financial advisor who has CFP® certification are satisfied or very satisfied compared with 72 percent of those who work with an advisor without certification;
  • Sole CFP® professionals generate between 40 and 100 percent more revenue than those financial professionals who do not hold the certification; team practices with a CFP® professional on staff generate 30 percent more in revenue;
  • Financial professionals with CFP® certification “work with more of their clients on a long-term, recurring basis, managing 45 (percent) of client assets for an AUM-based fee;”
  • 87 percent of CFP® professionals said that financial planning was “equally important” or “more important” than investment management to their advisory practice; and
  • CFP® professionals with less than ten years of industry experience are twice as likely to earn more than $215,000 annually (17 percent to 8 percent); and 35 percent of CFP® professionals with more than ten years of experience earn $215,000 annually compared to 23 percent of those advisors without the certification.

“This study is an important step in aligning a firm’s economic interests with CFP Board’s mission to benefit the public and promote competent and ethical financial planning,” said Tom Crowder, Managing Director for Marketing and Business Development. “For many years, CFP Board has heard that CFP® professionals had a leg up over their peers – this research proves that indeed they do.”

Methodology and Data Sources

Aite Group’s research is largely based on data gathered through a March 2012 online Aite Group survey of 515 U.S. financial advisors, on advisor performance data contributed by a top 50 U.S. financial services firm and interviews of top executives at top 20 brokerage firms.

Aite Group also conducted a December 2011 survey of more than 1,000 U.S. investors with a margin of error of +/- 3 percentage points at the 95 percent confidence level.


CFP Board Urges Consumer Financial Protection Bureau to Protect Older Americans

On August 20, 2012, CFP Board submitted a comment letter to the Consumer Financial Protection Bureau (CFPB) in response to its request for information on senior financial exploitation. CFP Board recommended that CFPB create a ratings system for financial certifications and designations, to help prevent the use of misleading, fraudulent and deceptive designations and certifications to promote financial services to older Americans.

CFP Board appreciates the nearly 2,700 CFP® professionals who participated in our Senior Americans Financial Exploitation Survey, which provided strong data in support of CFP Board’s recommendations to the CFPB for addressing the financial exploitation of older Americans. The survey found that more than half of the CERTIFIED FINANCIAL PLANNER™ professionals who participated have worked with an older client who has been subject to unfair, deceptive or abusive practices in the delivery of financial advice or the sale of financial products.

“Older Americans have already given many years of hard work and dedication – raising families, serving in the military, building businesses – all to become one of our most financially secure generations,” said CFP Board CEO Kevin Keller. “This survey reveals the pervasive financial abuse victimizing America’s seniors. CFP Board applauds the Consumer Financial Protection Bureau for its focus on this problem and urges the Bureau to take prompt action to reduce the use of misleading certifications and designations and to work with other federal and state regulators on legislative and regulatory policies to protect older Americans.”

In its letter, CFP Board noted that with more than 140 designations currently in use in the delivery of financial services, “senior investors are particularly vulnerable to confusion about professional designations and certifications.” As CFP Board highlighted, financial designations vary significantly and investors have no meaningful way of comparing their legitimacy, value or authenticity. With no federal or consistent state regulation or oversight of certifications and designations, Americans – especially seniors – are left on their own to sort through the alphabet soup of letters at the end of a financial professional’s name.

CFP Board urged the CFPB to take practical steps to reduce the misleading use of certifications and designations. Specifically, CFP Board recommended that the CFPB:

  • Establish a rating system for professional certifications and designations by identifying qualitative and quantitative standards (based on best practices for certifications) against which certifications and designations can be evaluated. The rating system would rank designations from the highest tier to those that are so deficient that their use in marketing is presumptively misleading or deceptive.
  • Communicate the rating system through an educational campaign to educate older Americans on how to use the system to evaluate the financial designations.

CFP Board suggested that CFPB could use the standards upon which the CFP® certification is based – an accredited certification program that requires substantial education and experience, a fair, valid and reliable exam that measures competencies for the standard of practice, continuing education required to maintain competencies, high professional and ethical standards, and a rigorous enforcement process that includes revocation of the certification, evidence that revocation is implemented, and public notice of disciplinary actions – as the model for the types of criteria that should be used to evaluate financial service designations.

CFP Board also urged the CFPB to support legislative and regulatory reforms to protect older Americans, including to:

  • Encourage policies that support the delivery of financial advice to older Americans under a fiduciary standard of care;
  • Encourage reforms – on a state or federal level – that would require those who work with seniors to meet baseline competency and ethical standards; and
  • Address the use of misleading titles, e.g., financial professionals who hold themselves out as financial planners without meeting competency or ethical requirements, by encouraging the implementation of the Government Accountability Office recommendations to gather additional data on this consumer protection issue that affects older Americans.

“As the Bureau takes much-needed steps toward addressing deceptive and fraudulent financial practices targeting American seniors, CFP Board and its nearly 67,000 CERTIFIED FINANCIAL PLANNER™ professionals hope to serve as valuable partners in the identification and prevention of such abuse,” said Keller. “We look forward to working with the CFPB and like-minded organizations to raise awareness of these risks and ensure Americans of all ages receive financial advice from an advisor they can trust.”

Survey Highlights

The statistically significant survey was conducted by APCO Insight and includes responses from more than 2,600 CERTIFIED FINANCIAL PLANNER™ professionals regarding their work with older clients who have been targeted for financial fraud and abuse at the hands of a financial advisor. In addition, in-depth interviews were conducted with select CFP® professionals to further explore older clients’ experiences with questionable financial practices.

  • More than half of CFP® professionals (56%) personally have worked with an older client who has been subject to unfair, deceptive or abusive practices in the delivery of financial advice or the sale of financial products. Another 32% personally knows of an older non-client who has been subject to such practices.
  • Although the vast majority of CFP® professionals always or often encouraged older victims of financial abuse to report abuse to the authorities, the median estimate of the CFP® professionals was that only 5% of those victims actually did report abuse.
  • CFP® professionals were aware of a variety of abusive practices in the delivery of financial advice or the sale of financial products:
    • Nearly three-quarters (73%) were aware of older investors who have been invited to “free meal” seminars that are actually sales pitches;
    • 58% were aware of older investors who have received unsolicited pitches for financial products or services;
    • Half (50%) were aware of older investors who have been offered high-yielding investments described as no-risk or low-risk;
    • More than a third (34%) were aware of older investors who have been pitched for prize-winning scams; and
    • 20% were aware of older investors who have been subject to power of attorney or guardian abuse, among many other types of misleading or fraudulent practices.
  • The majority of those surveyed found older Americans are subject to a variety of practices that could violate federal and state laws and regulations:
    • Nearly three-quarters (74%) of CFP® professionals were aware of older investors who have been offered unsuitable financial products;
    • 58% were aware of older investors who have been subject to omission of material facts about financial products;
    • Nearly half (48%) were aware of older investors who have been subject to misrepresentations about financial products; and
    • 46% were aware of older investors who have been subject to negligence or lack of follow-up in connection with financial products.
  • The financial products involved in unfair, deceptive or abusive practice witnessed by CFP® professionals most often involved equity indexed or variable annuities (76%), variable life insurance (32%), mutual funds (29%), and universal or whole life insurance (28%).

About the Survey Methodology

CFP Board developed the survey of U.S.-based CERTIFIED FINANCIAL PLANNER™ professionals with APCO Insight, which administered the online survey from July 24 through August 7, 2012 and 2,649 CFP® professionals participated. The statistically significant survey has a margin of error of 1.9% with a confidence level of 95%. In addition to the quantitative portion of the study, APCO Insight conducted in-depth interviews with CFP® professionals about their experiences with older Americans who have been subject to deceptive, fraudulent or misleading financial practices. A synopsis of these interviews is included in the report.

Read the full comment letter > (PDF, 1.04MB)
View the full Senior Americans Financial Exploitation Survey > (PDF, 389KB)


Financial Planning Days Enters Third Year with 25 Events across the Country This October

2012 marks the third year of Financial Planning Days. This important national initiative unites the collective resources of the financial planning community and city governments nationwide to deliver free, no-strings-attached financial advice and education to the public through a series of Financial Planning Day events in cities around the country.

Organized by CFP Board, Financial Planning Association, Foundation for Financial Planning and the U.S. Conference of Mayors, this groundbreaking project features hundreds of financial planners volunteering their time and expertise to work with individuals and families to address their pressing financial issues and offer financial planning education.

Financial Planning Day events consist of financial planners meeting one-on-one with attendees to offer pro bono advice. Financial planners also present classroom-style workshops addressing key financial planning topics. Participation is open to planners who either hold the CFP® certification or are members of the Financial Planning Association.

At a time when many Americans are still struggling as a result of the recent economic turmoil, we expect the Financial Planning Days initiative to generate high levels of interest from the public and the media. Additional information about Financial Planning Days, including the list of participating cities and how CFP® professionals can get involved, is available at www.FinancialPlanningDays.org.


CFP® Professionals Volunteer at Financial Readiness Day on Fort Riley Army Base

Thirty CFP® professionals from around the country volunteered at the Financial Readiness Day on Fort Riley army base in Kansas on August 7, 2012. The event, which was the first pro bono financial planning event of its kind organized on a military installation, was organized by CFP Board in partnership with Fort Riley, Kansas State University, Financial Planning Association, Foundation for Financial Planning and Association for Financial Counseling and Planning Education.

The event was attended by 140 soldiers, veterans and family members and was designed to provide attendees with free, competent and ethical financial planning advice in a unique, pressure-free setting and with no strings attached. It was kicked off by a welcome note to the troops and volunteers from Garrison Command Sergeant Major, Colvin D. Bennett, Sr., and Kevin Keller, CFP Board’s CEO. At the event, CFP® professionals presented a series of financial planning workshops and met one-on-one with service members to address their financial questions and concerns.

Fort Riley Financial Readiness Day was organized as a pilot to determine the feasibility of organizing similar events on military installations around the country. The feedback from both the attendees and volunteers has been overwhelmingly positive and in post-event surveys, 100% of soldiers indicated they would recommend the event to someone else.

CFP Professionals Help Military Families at Fort Riley Army Base


Your Input Requested: CFP Board Seeks Comments on Proposed Changes to Appeal Rules, Disciplinary Rules and CE Requirements

CFP Board is currently seeking comments on three sets of proposed changes to its Appeal Rules, Disciplinary Rules and Continuing Education (CE) requirements. Follow the links below to review the proposals and comment submission guidelines.

Review proposed changes to the Appeal Rules > (PDF, 117KB)
Review proposed changes to the Disciplinary Rules > (PDF, 364KB)
Review proposed changes to the CE Requirement > (PDF, 73KB)

Comments on the proposed revisions to the Appeal Rules and Disciplinary Rules must be submitted no later than September 20, 2012, to be considered. Comments on the proposed revisions to the CE requirement must be submitted no later than September 30, 2012, to be considered.


CFP Board Disciplinary Actions

CFP Board recently took the public disciplinary actions listed below. 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. The basis for each decision can be found in a Disciplinary Action Report on CFP Board’s website, and the public may check on an individual’s disciplinary history and certification status with CFP Board at www.CFP.net/verify.

STATE

NAME

LOCATION

DISCIPLINE

Alabama

Henry E. Walker, Jr.

Helena

Interim Suspension

California

Michael R. Frager

La Jolla

Revocation

California

David B. Hooks, CFP®

Camarillo

Letter of Admonition

California

Fielder J. Mattox

Cardiff

Suspension

Florida

Thomas J. Gregory

Maitland

Revocation

Florida

Michael Hanke

Lutz

Suspension

Florida

Neal S. Smalbach

Palm Harbor

Revocation

Michigan

Brett M. Plew

Kalamazoo

Revocation

Minnesota

Bruce D. Workman

Hamel

Revocation

New Jersey

Rebecca A. Huntley

West Long Branch

Revocation

Ohio

Paul T. McCormack, CFP®

Beachwood

Letter of Admonition

Pennsylvania

Gary J. Siano

Downingtown

Suspension

South Carolina

Emmet Martin, CFP®

Greenville

Letter of Admonition

Tennessee

Gala Gorman

Brentwood

Revocation

Texas

Brian W. Armstrong

Cleburne

Suspension

Texas

Lee A. Przybyla, CFP®

San Antonio

Letter of Admonition

Utah

Gregory N. Peterson

Orem

Interim Suspension

Virginia

James A. Avery

Mechanicsville

Revocation

Virginia

John R. Graves

Fredericksburg

Interim Suspension

Read the full news release announcing these disciplinary actions >


Recorded Webinar: What Should I Know About CFP Board’s New Sanction Guidelines?

A recording of the August 14, 2012 webinar on CFP Board’s new Sanction Guidelines is now available for on-demand viewing. This webinar provided an overview of the Sanction Guidelines, explained how they affect CFP® professionals and CFP Board’s disciplinary process, and addressed questions from the live audience.

View the recorded webinar on YouTube >
Read the full text of CFP Board’s Sanction Guidelines > (PDF, 163 KB)


Help Us Extend the Reach of CFP Board’s Public Awareness Campaign

CFP Board's multi-year “Let’s Make a Plan” Public Awareness Campaign includes a toolkit of resources – including customizable advertisements, artwork for the CFP® marks and more – available to CFP® professionals who wish to extend the reach of the campaign in their local communities.

Recent additions include a Social Media Guide and an Update on the Campaign’s First Year, including information from a brand tracking study that confirms that the campaign is having impact and positively moving awareness of and preference for CFP® professionals.
 
CFP Board’s online store also offers a range of products with the new CFP® (with plaque design) mark featured in CFP Board’s Public Awareness Campaign.

 

CFP Board Online Store

Visit the Public Awareness Campaign Toolkit >
Visit CFP Board’s Online Store >


CFP Board in the News

A Chat with CFP Board CEO Kevin Keller
The Longest Running CEO in Seven Years Talks about the Board's Missteps and Achievements

Kevin Keller must be doing something right. He just celebrated his fifth year as CEO of the Certified Financial Planner (CFP) Board of Standards. When he took over, he was the seventh person in less than seven years to hold that position.

Maybe his staying power has something to do with the fact that he helped transfer the CFP Board from Denver to Washington five years ago this November. As he told me in a late July interview, the CFP Board "had no public policy infrastructure" until it moved its headquarters to Washington.

It's been a crucial time for the CFP Board, as part of the Financial Planning Coalition, to be able to sit alongside other advisor trade groups before Congress to help fight against, for instance, House Financial Services Committee Chairman Spencer Bachus' bill calling for a self-regulatory organization (SRO) for advisors – which looks to be on hold at least for the rest of this year – and to fight to make sure that a fiduciary standard for brokers sees the light of day (which has yet to happen). Read more >

AdvisorOne
Melanie Waddell
August 21, 2012

Letters to the Editor: Auditing Financial Advisers and Protecting Investors

Rep. Bachus gives voice to the myth that advisers prefer to skate by with thin and ineffective oversight.

We question the practicality and necessity of Chairman Bachus's proposal to create a new, more expensive and less accountable regulator when there is a more effective, less costly option available. The simple fact (and the big secret) is that, together, Congress and the SEC can build and fund a very effective oversight program without creating a new regulator, and it wouldn't cost taxpayers a cent.

There are different ways to get there, one of which has been offered by Reps. Maxine Waters and Barney Frank, who have introduced a bill that allows the SEC to charge investment advisers for the cost of increased oversight. The vast majority of advisers surveyed have embraced this idea and are supportive of paying these costs out of their own pockets. In addition to costing only one-fifth that of outsourcing oversight to a self-regulatory organization like Finra, the Waters-Frank legislation also fairly spreads the cost of investment adviser oversight among firms big and small.

In the end, we want what will best protect investors, and outsourcing investment adviser oversight flies in the face of increasing consumer protection. So, instead of pointing fingers, we hope that Chairman Bachus will work with us, find that common ground and do what's right for the American public.

Kevin Keller
Certified Financial Planner Board of Standards
Washington

Marv Tuttle
Financial Planning Association
Denver

Ellen Turf
National Association of Personal Financial Advisors
Arlington Heights, Ill.

The Wall Street Journal
August 13, 2012

CFP Board Ads to Hit NPR Airwaves This Fall
Seeking to Increase Brand Awareness, Encourage Using Planners

Public-radio listeners will be encouraged to turn to a [CERTIFIED FINANCIAL PLANNER™ professional] for investment guidance when advertisements touting CFP® [professionals] hit NPR this fall.

The Certified Financial Planner Board of Standards Inc. said last Friday at the group's conference in Washington that the radio spots, which will run Monday through Friday from Oct. 1 through Nov. 16, are the next step in a $40 million, four-year effort to raise awareness about the CFP® [certification].

Recognition Rises

A study released by the CFP Board on Aug. 13 shows that between April 2011 and this April, the number of people in a target audience who mentioned CFP® [certification] as a financial credential that they recognize rose by 7 points.

The number of people who said that working with a CFP® [professional] is "appropriate and beneficial for someone like me" rose 4 points in the total sample and by 7 points among those with $500,000 or more in investible assets.

"We're very pleased with the initial results," CFP Board chief executive Kevin Keller said in an interview. "The reaction of CFP® professionals as well has been very favorable." Read more >

Investment News
Mark Schoeff, Jr.
August 12, 2012

Read more highlights of CFP Board in the News >


Upcoming Events

  • CFP® Certificant Connections in Milwaukee, Chicago & Indianapolis, Sept. 12-13: Join us for these town-hall style events, which provide CFP® professionals and other CFP Board stakeholders the opportunity to engage in two-way dialogue with CFP Board's leadership. Register to attend >
     
  • Upcoming Webinar: How CFP Board’s Checklist and Disclosure Documents Can Help You Comply with the Standards of Professional Conduct, Sept. 27, 1:30pm (ET): Save the date for this webinar that will focus on documents from CFP Board that can assist CFP® professionals in upholding their obligations under the Standards of Professional Conduct.
     
  • CFP® Certification Examination, Nov. 16-17: Registration for the November 2012 administration of the CFP® Certification Examination is open through October 2, 2012. Encourage your qualified colleagues to register at www.CFP.net/exam.

Volunteer Opportunities

CFP Board’s work benefits greatly from the generous contributions CFP® professionals and other stakeholders provide through volunteer service. If you have interest in making a direct contribution to CFP Board’s work, please take time to complete a volunteer application form.


 

CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS, INC.
mail@cfpboard.org
P 800-487-1497 • F 202-379-2299 • CFP.NET
1425 K STREET, NW #500 • WASHINGTON, DC 20005
 
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Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete initial and ongoing certification requirements.