WASHINGTON -- When the CFP Board made the move from Denver to the nation's capital around Thanksgiving five years ago, the group was looking to insert itself into the policy discussions about the rules of the road for the financial-services sector.
For most of that time, that work has fallen to Marilyn Mohrman-Gillis, the CFP Board's managing director of public policy and communication, who heads what she describes as a "lean and mean public-policy staff" of three full-time employees, including herself.
The CFP Board continually seeks to amplify its message to policymakers by joining with other, similarly focused groups to form a broader advocacy base. Those partnerships, together with the strategic counsel from a clutch of outside experts, have helped the board establish its presence in Washington, even with only a meager staff of three.
"When I started four years ago we had nothing," Mohrman-Gillis said in a recent interview. "We moved from Denver to Washington, D.C., and one of the strategic goals was to develop more of a public-policy presence in Washington, D.C., and get a seat at the table and speak with a clear voice on behalf of the public on these issues."
The CFP Board's advocacy work is shaped by its 501(c)(3) mandate, which charges the group with working in the public interest to maintain a high standard for competent and ethical financial planning. In the policy arena, that translates into support for stricter oversight of the industry on a variety of legislative and regulatory issues, including a uniform fiduciary standard for advisors and broker-dealers and a new regulatory program that would require financial planners to register with the SEC.
Much of the board's policy work comes under the aegis of the Financial Planning Coalition, an organization formed in January 2009 that includes the Financial Planning Association and the National Association of Personal Financial Advisors, as well as the CFP Board. The groups banded together in the coalition in a bid to establish a unified voice for the financial-planning sector, working to distinguish and elevate the profession while ensuring fiduciary accountability and consistent regulation.
"A hallmark of what we do in public policy is we try to put together like-minded, aligned organizations on policy issues to strengthen the voice that we bring to the Hill or to the SEC or to wherever," Mohrman-Gillis said. "Relatively early on, looking at how do we speak to Congress and to regulatory agencies with one clear voice on behalf of the public related to financial-planning issues, we wanted to enlist the cooperation and collaboration of our partners at the Financial Planning Association and NAPFA."
On some issues, such as its work on expanding the fiduciary standard in a rulemaking process set in motion under the Dodd-Frank act, the CFP Board has a broader base of partner organizations, including the AARP, the Investment Adviser Association and the Consumer Federation of America.
The CFP Board also maintains the Public Policy Council, a group of 10 policy experts in various areas such as legal affairs, consumer issues and state-level securities regulation who, on a voluntary basis, meet in Washington four times a year to advise the board's leadership on its advocacy work.
"We use them because we want to make sure, again, that we're focused on policy that benefits the public, and so the Public Policy Council is broadly constructed to help us have that viewpoint," Mohrman-Gillis said.
In an effort to expand its message outside the Beltway, the CFP Board in October 2009 launched an online grass-roots action network, coinciding with the debut of its public policy Web page. On that page, the CFP Board will post call-outs to readers urging them to call or write their representatives to support or oppose a certain proposal, offering sample form letters that they can email directly from the site.
"Those are the people that we go to first when we want to have people weigh in on legislative or regulatory issues," Mohrman-Gillis said.
In addition to its work pressing the SEC to adopt a uniform fiduciary standard for advisors and broker-dealers, the CFP Board has also been making its voice heard at the Department of Labor, asking officials there to move ahead with a separate proceeding that would impose fiduciary responsibilities on investment professionals working with retirement plans under the Employee Retirement Income Security Act (ERISA).
Another controversial area where the CFP Board has been making its voice heard is in the debate over what organization should be responsible for examining investment advisors.
Two competing bills addressing that issue emerged this year in the House Financial Services Committee. One, authored by Chairman Spencer Bachus (R-Ala.), would grant the SEC authority to name one or more self-regulatory organizations (SROs) to assume responsibility for auditing advisors. The other proposal, backed by Maxine Waters (D-Calif.), would permit the SEC to collect user fees from industry members to finance a more rigorous examination framework. The agency is currently responsible for overseeing advisors, but examinations are infrequent owing to a tight budget.
Unable to find a consensus within his committee, Bachus said in July that he would not bring the bill to a markup, a development for which the CFP Board takes a share of the credit.
"Bachus, I think in part because of the work that we did as well as our aligned colleagues, essentially took a step back and said that he didn't have consensus on his bill and he was going to look for other formulations upon which he could build a consensus," Mohrman-Gillis said. "The bottom line, I think, is it's very, very unlikely that that bill is going to move forward this session, and hopefully we'll be starting the debate again next session with something that looks more like the Waters bill, which is our preferred solution, which is authorizing the SEC to collect user fees from the advisor industry to increase examinations."
She acknowledged that the debate between vesting the SEC with authority to collect user fees and tapping a non-governmental group like FINRAto perform that function is essentially an either/or proposition, though she held out hope that some Republicans on the Financial Services Committee could warm to the SEC framework that the CFP Board is championing.
"In my view there is not a middle ground between those two proposals," she said. "I'm not sure that I would say that both sides are dug in. I actually believe that the debate can start kind of on a fresh ground with people taking a step back and looking at the problem and then looking at the solution. I don't think we have entrenched views on the user-fee issue."
So that debate, like many of the other areas where the CFP Board is advocating, can be expected to resurface next year, and, as ever in Washington ahead of an election, the expected shuffle of committee memberships adds another level of uncertainty.
In the longer view, the CFP Board plans to continue to press for a more comprehensive regulatory structure that would encompass all financial professionals who advertise themselves as planners.
As the Dodd-Frank bill was taking shape, the CFP Board offered a proposal for what it called a financial planner oversight board, a panel that would be organized under the auspices of the SEC where anyone offering planning services would have to register.
"One of the reasons we were pushing this is, most importantly, we think there is a gap in regulation that is harmful to consumers, that we really need to fill that gap not just with a voluntary agreement to abide by standards but with a requirement to abide by standards," Mohrman-Gillis said.
"We believe that it was very much of an opt-in kind of regulation, because those people who didn't want to be recognized regulated as a financial planner didn't have to because they didn't have to present themselves [as a financial planner] to consumers. It's kind of like truth in lending. If you present yourself to the consumer as a financial planner then you need to be competent, you need to be ethical, and that was the whole premise of this."
The CFP Board's push for a uniform regulatory structure to oversee all planners fits with the group's efforts to make financial planning understood as a distinctive profession, and came in response to what Mohrman-Gillis described as "silo regulation," where broker-dealers, investment advisors, insurance providers and others are each governed by a distinct set of regulations. That framework, she argued, fails to address the holistic set of services that certified financial planners provide.
"We believe that financial planning is not under any one of these siloes, but is an umbrella concept that integrates across these services that are provided by these silo-regulated entities," she said. "And even more -- if you look at retirement planning, you look at investments, you look at tax planning, you look at insurance, you look at education, you look at estate planning -- you're providing integrated advice across all of these areas."
The Government Accountability Office considered the CFP Board's proposal for a financial planner oversight board, but ultimately concluded that it did not have enough information to endorse the idea, and the measure was not included in the Dodd-Frank bill. But that was only a temporary setback for the board, which intends to continue to press lawmakers on the issue, while also exploring options at the state level and under the SEC's existing authorities to strengthen oversight of financial planners.
The CFP Board is also making its voice heard at one of the newest additions to the federal bureaucracy, the Consumer Financial Protection Board that was established under Dodd-Frank. There, the board is asking regulators to begin to examine the dizzying array of certifications and credentials that various industry groups offer to financial professionals. The CFP Board, which holds its own certification up as the gold standard, points out that many of the credentials other groups offer don't require a rigorous exam or much in the way of continuing education or adherence to ethical standards. Moreover, consumers can't reasonably be expected to determine whether the letters financial professionals tack on after their title actually mean anything.
"A very practical and meaningful initiative would be if they would take on the task of essentially developing criteria for designations and rating the designations that are out there. There's over 140 designations on FINRA's website, and many of them are virtually meaningless," Mohrman-Gillis said. "Essentially they're all marketing tools. And they're vehicles really for misrepresentation, not only just to older Americans but to all consumers because a typical consumer has no ability to do the research that it takes to determine whether three letters mean something. They just don't."