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Concern About CFP Board Controversy Hits Colleges That Teach Planning

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College administrators, professors and students nationwide say they are concerned about the controversy surrounding the CFP Board’s disciplinary policies – and the fact that the board’s ongoing public awareness campaign, called Let’s Make a Plan, has been driving Americans to its website where, until recently, hundreds of advisors were misrepresenting their compensation as fee-only.

As of 2012, the CFP Board registered close to 400 degree and certificate programs in financial planning nationwide. The number has been increasing rapidly as the CFP Board’s influence expands among educators. These institutions and thousands of students nationwide cumulatively have invested untold millions of dollars in the rigorous two-year-plus process of studying for and taking the CFP examination.

Now, the board’s educational partners are contending with fallout from the revelation that the board had been allowing wirehouse advisors to call themselves fee-only on its own website, against its own rules, while punishing other advisors at smaller firms for similar transgressions. Concerns about a potential selective disciplinary process has led some planners to say that holding a CFP certificate now comes with too much liability.

The College for Financial Planning, which prepares the highest number of students for the CFP examination nationwide every year, posted a YouTube video on its website Friday seeking to quell concerns.


“I think it is best if all of us kind of take a deep breath, step back and work with the CFP Board to try to resolve this issue,” Jim Pasztor, vice president of academic affairs at the college, says in the video. “My concern is that we are throwing the baby out with the bath water. There’s all this talk now about people saying, ‘I don’t know, should I keep my CFP certification?’ There are people who hear this and then they wonder, ‘Should I pursue the CFP certification?’ ”

The controversy stems from the way the board defines fee-only, which differs from NAPFA's definition, Pasztor tells viewers. He goes on to urge people not to “paint the CFP Board in a corner,” but to help the board redefine the term.

Elsewhere, professors at Alfred State College in Alfred, N.Y.; the University of California campuses at both Davis and Los Angeles; the University of Minnesota in Minneapolis; the University of Missouri in Columbia, Mo.; Texas Tech University in Lubbock, Texas; and Utah Valley University in Orem, Utah, expressed concerns about the CFP Board’s actions in interviews.

“I’ve always loved the [CFP] program and it saddens me to see this because I don’t care what anyone says, this is going to hurt enrollment,” says Steve Bertino, who has taught CFP courses through the extension program at the University of California at Davis for years. In his view, CFP Board CEO Kevin Keller has tolerated widespread deception and “should resign. This person has done so much harm.”

Asked to respond to Bertino’s call to step down, Keller sent the following statement via board spokesman Dan Drummond: "CFP Board values all of our education partners and those who teach future CFP professionals. Our mission has been – and always will be – to benefit the public by granting the CFP certification and upholding it as the recognized standard for personal financial planning."


In Bertino’s view, Pasztor posted his video to try to stamp out legitimate alarm over the board’s recent actions.

“I hate to say it, but [Pasztor] is just protecting his rice bowl, so to speak,” Bertino says. “He is just trying to keep everyone happy. This guy Jim is saying we [the planning community] backed them in the corner. No, [the board] backed themselves in the corner by this behavior.”

In response, Pasztor told Financial Planning: "What I'm saying is let's not get too concerned about this. I think this is something that can get worked out."

The board stripped all fee-only declarations from 8,000 advisor profiles on its website on Sept. 19 hours after Financial Planning reported that it had been allowing 486 wirehouse advisors to use the term, along with hundreds of other advisors from banks, insurance companies and other large firms.

“At this point we have not had complaints,” Keller said last month of the wirehouse profiles before the board altered them. He said the board does not audit CFP holders for compliance. When asked why the board allowed advisors in wirehouses the option of using the term fee-only on its site in contravention of its own rules, he said, “Our expectation is that people understand our rules and that they comply with them.”

The board’s letsmakeaplan.org website assures consumers that all its CFPs adhere to the highest ethical standards. It also assures them that CFPs on the website are fiduciaries – who put client interests before their own – even when those advisors work for employers, such as wirehouses, that expect them to work to a suitability standard. Wirehouse advisors must sell investment products that are deemed suitable for clients, a lesser standard than a fiduciary one. The board’s rules forbid any advisors who work for employers that take commissions to use the term fee-only.

The board expressed its solidarity with Pasztor’s views in the video in an email from Drummond.

“We have a long-standing relationship with the College for Financial Planning – the birthplace of the CFP certification – and greatly value their insights and input,” Drummond says. “We agree with them wholeheartedly, too, that when someone is looking for competent and ethical financial planning, they should turn to a CFP professional.” The college created the certification before the CFP Board was formed in 1985 to take over stewardship of the marks.

In an interview, Pasztor acknowledges the college’s vested interest in the continued success of the certification. The college has graduated tens of thousands of CFP certificants.

“I will admit that we train people for the CFP certification and we are extremely successful at it,” he says. “If the CFP certification starts to really fail, then what is going to really replace it?”

While the board was allowing wirehouse advisors to commit compensation disclosure violations on its website, it also was investigating or punishing a number of advisors at smaller firms – including its former chairman, Alan Goldfarb – for similar violations.

Goldfarb and another former board official who was sanctioned privately say the board punished them at least in part to avoid a related lawsuit, and not purely on the merits of their cases.

When asked if the board is practicing selective discipline for its CFP holders, Keller has said, “There is no double standard for enforcement. We expect all of our CFP professionals to adhere to our rules and our ethical standards.” Repeated attempts to reach the chairwoman of the CFP Board’s board of directors, Nancy Kistner, were unsuccessful.


Since coming to the board as CEO in 2007, Keller has increased the ranks of CFP holders, often by convincing large firms like wirehouses, as well as insurance companies and banks, to support their advisors in gaining the certificate.

“The fact that these people [who were breaking rules] were with big wirehouses that were very supportive of the CFP marks, it raises questions to me as a consumer,” says Rob Weagley, chairman of the financial planning department at the University of Missouri. “This is wrong. This is troubling. It’s an egregious oversight.”

Katie Simmons, a recent graduate of the planning program at San Diego State University and a planning support specialist with the fee-only firm Pure Financial in San Diego, says she worries about the controversy.

“I work for a company that genuinely abides by the rules, so it does concern me that other people could think that they could do anything they want with this license,” said Simmons, who plans to sit for her CFP examination in March. (She’ll still need another year at least of professional experience before she can call herself a CFP.)

“If someone is trusting you with their life savings based on your being a fiduciary and it’s a lie, then it’s a huge problem,” Simmons says.

At Texas Tech, Vickie Hampton, the head of the planning department and a former director of the CFP Board, says the planning program at the university won't be impacted by the controversy. The courses are geared to training planners holistically, and not solely to prepare them to sit for the CFP exam, as is the case with many certificate programs.

Yet if another planning credential emerges as a dominant one, she says, the university would prepare its students to meet that new standard. "The whole value of the mark lies in the public's respect for it," she says. "If the public loses that respect, [CFP holders] are not going to continue to pay for it. This is a leadership issue,” Hampton says, adding that the board's top officials need to explain "how we got to this point and, then, what’s being done about it. ... If there have been mistakes made that are by accident or by design, it’s a blemish. You always have a responsibility to treat everybody fairly and ethically and honestly particularly if you are a standards setting body," she adds. "We need to use things like this to move forward and do things better."

Ron Rhoades, a former NAPFA board member and head of the financial planning program at Alfred State College, agrees that the board needs to take immediate action.

“Consumers are the real victims here,” Rhoades says of the erroneous fee-only listings. If the board “failed to act when it knew it was going on, that I think is where the big concern arises.”

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