CFP Board rebuts criticism of fee increase
NASHVILLE, Tenn. -- Facing criticism about its plans to hike recertification fees, CFP Board leaders note it is a rare move and emphasize the benefits planners get from their CFP designation.
"We've increased the value of the certification marks by a significant amount. That doesn't come without a price," CEO Kevin Keller told reporters Wednesday on the sidelines of the FPA's annual conference on Tuesday. His comments came in response to an article by Michael Kitces, co-founder of the XY Planning Network. Kitces is also a Financial Planning columnist.
The fee is rising to $355 from $325.
The board’s senior executives also said the board may adjust its proposed alterations to the conduct of standards. In June, the CFP Board recommended sweeping changes to its ethics rules and standards of conduct, which have not yet been finalized.
The number of CFPs has risen dramatically in the past decade, increasing 45% to nearly 80,000, Keller noted. The board has engaged in a number of activities to promote the CFP designation, including an ongoing public awareness campaign.
"The mantra and strategy we are focused on is making CFP certification the must-have designation for the providers of and consumers of financial advice," Keller said.
The door has closed for public comments on the board’s propositions. While some industry heavyweights commended them, critics call out contradictions.August 25
Over 75,000 advisors in the U.S. will be affected by what is expected to be the most significant version of CFP standards to date.August 15
The certification tells clients you have their best interests at heart. After that, is the name of the school important?October 2
SCHOOL'S IN SESSION
Part of that strategy includes added attention to building out CFP board-registered baccalaureate degree programs. Currently less than 10% of those sitting for the exam come from degree programs, according to Keller. The board is hoping that number will grow.
"We think that's the future," he said. "It's because we're building a profession — and I think that's based on building a degree in financial planning."
Keller also said the board hopes to encourage students to sit for the exam immediately following graduation.
"When you're a student, you're never more focused … life hasn't gotten in the way yet. It's a lot easier studying for the exam right out of school," said Keller.
FEE HIKE: CREATING VALUE?
In his article, Kitces acknowledged the work the CFP Board has done to increase the value of holding the designation, but raised questions about the organization's transparency, saying "accountability is crucial, and especially since the CFP Board has been prone in recent years to taking actions without soliciting much input or holding public comment periods."
This is only the second fee increase in the past decade. In 2011, the board raised the fee to $325 from $180 to fund its public awareness campaign. Keller said this effort builds client demand for CFP professionals.
He added: "We're creating value for the CFP community and I hope that is what we are judged on."
Another increase isn't likely any time soon, according to CFP Board Chairman Blaine Aikin. "There’s a great deal of discussion that necessarily takes place among the board that examines what the priorities of the board are," Aikin said.
MORE CHANGES COMING
The board is also taking in the feedback it received on its proposed changes to the standards of professional conduct.
It is due to meet in November, when it will consider amending its proposal, Aikin said.
He declined to provide specifics, but said alterations were likely.
"I think it is safe to say that there will be meaningful changes," he said.
The board also found an exceptionally high level of support for the fiduciary standard during the comment period.
Keller added that the CFP Board has to consider how the proposed changes can have unintended effects.
"One of the things that is important when thinking about the standards: When we make a change, a firm doesn't have one set of documents for their CFP advisors and another for their non-CFPs," he said. "That is why it's so important we listen. The impact goes way beyond the 78,000 CFPs."