A Worrisome Precedent? CFP Board Taps Non-Full-Time Planner as Chairman
When advisors think of the CFP Board, they might assume the main financial planning certification body would be overseen by, well, financial planners. Yet the board announced Dec. 1 it had elected fi360 CEO Blaine Aikin as 2017 board chairman, even though he has not been a full-time planner for years.
That invites the question of whether the decision will be beneficial to the board’s constituents, or potentially harmful, especially if his election paves the way for future chairs who have never done planning.
Indeed, former chairman-elect Joseph Votava, who stepped down from the part-time, one-year position unexpectedly this summer, sees Aikin's appointment as a possible "segue" to a non-planner chair. Aikin himself indicated there could be merits to having a non-planner serve. In 2011, the board had a chair who was not a working planner, Chuck Moran, who had transitioned to academia from a planning career.
Yet, a number of outside experts and prominent planners, including Votava, hailed Aikin as a great choice.
"Blaine is a terrific leader," says Kathleen McBride, who serves with Aikin on the steering group for the Committee for the Fiduciary Standard. "He may not do individual planning himself anymore, but what he does in leading fi360 is make planners better fiduciaries."
However, given the precedent it might set, his election raises an alarm for some, including Dave Yeske, a former chairman of the FPA and now director of the financial planning program at Golden Gate University in San Francisco and managing director of prominent planning firm Yeske Buie.
"If you are going to get into a situation where you have a string of chairs who have never practiced financial planning, who utterly lack the framework for understanding what the profession it is, I think that could be highly problematic," Yeske says.
Because of the board's tax-exempt status as a nonprofit, it has been over-scrupulous in seeking to portray itself as serving that role to the potential detriment of its planners, Yeske says.
"The practitioner is the vehicle through which you serve the public," he says. "The CFP board serves the public by creating and serving its licensees" by holding CFPs to an appropriately high standard of ethics and professionalism.
Most staff members at the board, including its CEO Kevin Keller, are not CFPs and have not worked as planners.
The board's current chair Richard Rojeck said the board "certainly agrees" with Yeske's belief that the board serves the public through its CFPs. He points out that Aikin spent 10 years as a practitioner and has a long résumé of related experience in the field.
30-YEAR TENURE AS A CFP
Aikin will serve as 2016 chairman-elect, and chairman the following year. Mike Greene of Ameriprise will be 2016 chairman, succeeding Votava.
Chairs are elected from the board's 15 directors, who include mostly CFP holders as well as public members who are not employed in the planning profession. In a similar, precedent-setting move, the board recently allowed certain professionals who've never done planning for clients to earn CFPs.
Aikin is a CFP, CFA and consultant to advisors. He also heads fi360, whose customers include financial services firm and advisors. The firm trains them in fiduciary practices and certifies advisors as fiduciaries.
Given his years in the industry, Aikin says he doesn't see his résumé as detracting from his ability to serve.
"Let me just say I just celebrated my 30th year as a CFP practitioner," he says. "I have been a practitioner, though not recently. … I'm engaged in following the financial planning community literally on a daily basis, so I don't see that as being a problem."
Nor does Aikin, who served on the CFP Board’s board of directors for three years, see his election necessarily as a step toward the directors electing a chair who has never done planning — though he sounded open to the concept.
"I’m sure that [the idea] has also been expressed as in, 'What does that mean for the chairmanship?' but it was not a focus of attention," Aikin says. "What I will say is, as you look at the credentials and the backgrounds of directors, these are high-powered, high-capability individuals, so whenever an election rolls around … you go for the individuals."
During his time on the board, Votava says the directors frequently discussed whether one of its public members should serve as chair. Aikin "might be a decent segue toward that," he adds. "He's kind of a 'tweener.' "
The board also elected four new directors: CEO of software company Advicent Solutions Phillip Cunningham; former Labor Department official and JP Morgan executive Michael Davis; former NAPFA board member and chairwoman Susan John; and Arlene Pietranton, a nonprofit executive and speech language pathologist.
2 CHAIRMEN EXIT IN 3 YEARS
Aikin steps into the role following the exit of two chairmen in the last three years, and amid criticism about the board's leadership.
Votava said in August he would not serve in his elected role as chairman in 2016, explaining that he wanted to spend more time with his family and that the position demanded more time than he felt he could devote to it.
In 2012, the board pushed out its sitting chairman Alan Goldfarb, saying he allegedly misused the term fee-only to describe his practice when he worked for a parent company that could take commissions. The move drew criticism from those who believed the board scapegoated Goldfarb in order to avoid a lawsuit. At the same time, it launched investigations into an expanding number of sitting officials for similar reasons, ultimately sanctioning another two and forcing them out of their positions. During this period, the board was permitting hundreds of advisors — and possibly more — to commit the same transgressions on its website. The board stopped after an investigation by Financial Planning and later said it had made a mistake.
Goldfarb said he also finds Aikin's election troubling.
"This is just another step toward the CFP Board … moving away from representing its most formidable dues-paying stakeholders, its certificants," he says.
'HE WOULD TAKE CARE OF IT'
Given the board's tumultuous last two years, some planners say Aikin is a great choice.
"I'm so pleased about Blaine, I have to tell you. … I have no question that if Blaine felt that something was not being handled properly that he would take care of it," says Patricia Houlihan, a former board chairwoman. Aikin served as a board director for the past three years, through the bulk of its recent controversies.
Today, Houlihan serves with Aikin on the steering group for the Committee for the Fiduciary Standard, which advocates "for the authentic fiduciary standard as established under the Investment Advisers Act of 1940."
"Blaine is a great choice, someone who can bridge the gap between planners, service providers and financial institutions," says MarketCounsel founder and frequent board critic Brian Hamburger.
'THE VOICE OF THE BOARD'
When Houlihan was the board's chairwoman also during a time of controversy, she spoke regularly to the media and the public on behalf of the board, a habit Goldfarb maintained during his tenure.
Subsequent chairs have rarely spoken to the media, except in the presence of CEO Kevin Keller or another member of the board staff.
Houlihan, however, said she believes Aikin will strike a new tone. "In the role of chair, I think Blaine will speak as the voice of the board," she says. "I think Blaine would pick up the phone and talk to [the media]."
During a conversation that included a board staffer, Aikin says that, to the extent he's able, that's what he plans to do: "I thoroughly enjoy speaking and being out in public."
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