Just over 25 years ago, the two largest professional organizations in the field came together to form the Financial Planning Association.
That painstaking process had begun years earlier, when leaders of the International Association of Financial Planning and the Institute of Certified Financial Planners rallied around a September 1997 essay in Financial Planning.
The light-hearted headline of outgoing IAFP president Peggy Ruhlin's call to action, "If I Ruled the World," belied the serious nature of the proposal to unite the two organizations and the laborious consensus building needed to make it work. A draft of her argument drew support from both groups' boards. The central difference between the two groups: The ICFP served certified financial planners specifically, while the IAFP had for decades remained intentionally "designation neutral." In pursuit of unification, Ruhlin and other IAFP board members voted unanimously to endorse the CFP designation as "the symbol for financial planning," a relatively new profession that needed a single credential before the public and aspiring practitioners, she later recalled in a Journal of Financial Planning interview.
"There's nothing wrong with the other designations, but somehow the CFP designation has emerged as the predominant one, and to be competitive today, you have to have it," Ruhlin said.
Marathon talks among a project team of 14 planners at the Hilton Chicago O'Hare Airport led to a "memorandum of intent and commitment" for a new organization: the Financial Planning Association. (Three decades earlier, 13 mutual fund salesmen and life insurance agents had met nearby at the O'Hare Inn, where they laid the foundation for the industry's first professional standards.) These founding planners of the FPA believed, the memo said, that it was in "the best interest of the public and the financial planning profession to unify their efforts into a new entity that establishes the value of financial planning and the success of the financial planning profession."
The IAFP board and ICFP members then voted to launch the FPA. Its official launch date: Jan. 1, 2000.
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A youthful professional field
A quarter of a century later, the FPA stands as the most influential professional development, membership and advocacy organization in financial planning. This week, members are commemorating its 25th anniversary at the FPA's annual conference in Las Vegas under the leadership of
Planners who advance their careers and give back to the profession through the FPA take pride in their individual and collective accomplishments. With $8.3 million in 2024 revenue, the FPA has 75 local chapters (plus two at the state level), 15 "knowledge circles"
Beyond member services, the FPA has played a significant role in defining standards and protecting investors, with lasting regulatory implications. It took on Wall Street and the Securities and Exchange Commission by winning a lawsuit that enshrined the fiduciary duty across all advisory relationships by eliminating the "Merrill Lynch rule."
Still, the organization has changed over the years. Membership has fallen to about 17,000 from the high of 30,000 at its genesis. And in 2003, the FPA's Broker-Dealer Division split off to form what would become the Financial Services Institute, underscoring enduring tensions around how best to educate the public and practitioners on the meaning of financial planning.
Despite internal squabbles, which advocates say are overstated, the FPA remains the standard-bearer for a field that is technically younger than a Wham-O Frisbee and evolving at a rapid clip.
"We have absolutely everything we need to actually tie a ribbon, if you will, on this profession being a profession," said Elissa Buie, CEO of
The FPA's identity as the champion of the planning profession arose out of the IAFP-ICFP merger and gained strength with its 2007 victory over the SEC — "a very David and Goliath battle" that the FPA won "against all the odds," said Dave Yeske, the RIA's managing director, who was also a member of the Chicago team and the 2003 FPA president.
Large professional fields usually have small percentages of members who participate in their associations. The FPA's membership are the CFPs who care most deeply about financial planning "as a profession and as a process," Yeske said.
"We've got the 17,000 who are out there founding and sustaining chapters and doing pro bono work," he said. "FPA has the membership that is actually the crème de la crème of the CFPs, not all 100,000. It's the ones who care."
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An expanding profession and a shrinking membership base
Defining
Critics have also pointed to tensions between the national office and local chapters, particularly during initiatives such as the OneFPA Network, which some saw as steering resources and control to the group's Denver headquarters.
Falling participation has also raised concerns. Comparing the more than 106,000 CFP mark holders to the roughly 17,000 FPA members represents "the purest and most direct expression of how effectively you're representing your membership in your stakeholder base," according to planner, entrepreneur and writer Michael Kitces of Kitces.com and companies like AdvicePay, the XY Planning Network and Focus Partners Wealth. That is "the metric for FPA to look at," Kitces said. "And I do think, unfortunately, by that metric, FPA has struggled."
Even so, he praised the association's current "PLAN" strategy — practice support, learning, advocacy and networking — and its efforts to emulate the major professional organizations serving doctors, accountants and lawyers.
"Any world of professional services needs some kind of membership association for its practitioners," Kitces said. "The FPA is our version and expression of that. So that was largely the purpose that FPA was brought together to fulfill when IAFP and ICFP merged 25 years ago. And I think it still very much remains on that track."
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The push and pull
Other observers, such as journalist and conference organizer Bob Veres of
At times the association, as Veres put it, pushed for the "membership to support the association rather than the association supporting the members." His
Veres started out at the IAFP's Atlanta office in 1982 as the editor of what was then the association's industry news publication, The Financial Planner, which dated back to 1970 and changed its name to Financial Planning a few months after he joined.
Among the most contentious FPA initiatives was the OneFPA reorganization. Veres characterized it as a bungled attempt
"The consultant … uncovered, in the chapters, 'operational and cultural issues impeding FPA's growth and success.' This, I found astounding," Veres wrote in the book. "The chapters were where the action was; virtually all of it."
Ultimately, the FPA scrapped much of OneFPA, keeping only certain aspects, a move for which Veres applauded the
"I thought the FPA was conceived as a really important part of the profession and, as far as I can tell, it has never lived up to that," Veres said. "To me, it's been 20 years of disappointment and five years of hope, but not a lot of progress, because the battleship had to turn around, and it takes a lot of time to do that. The FPA is too important for it not to be functional and valuable to the membership and to the profession."
But Veres reserves his sharpest criticism for the Financial Services Institute, which
For his part, FSI CEO Dale Brown, who began his career at IAFP in 1988, says the group shares FPA's goal of holding financial advisors accountable to a fiduciary or best interest standard but differs on the question of how to do so. The fiduciary rule proposals under the last two Democratic administrations were too complex and confusing and would price people out of getting financial advice, Brown said.
"This issue has been framed as pro-fiduciary versus anti-fiduciary," he said. "What's going to be workable, so that we can continue to expand access to advice and elevate the standard to which advisors are held?"
FSI took no position on the FPA's lawsuit against the SEC over the Merrill Lynch rule. But Brown noted that when the Broker-Dealer Division departed the FPA to launch FSI, it did so with financial support from the association, along with an acknowledgment that focusing on brokers could have undercut the nascent organization for planners.
"Its principal mission is to promote and grow the profession of financial planning," he said. "There was a concern that if FPA was advocating for issues that were primarily relevant to broker-dealers, that would be a distraction from the core message of the value of financial planning."
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Galvanized behind a cause
Even before the IAFP and ICFP came together, members generally opposed the Merrill Lynch rule. Also known as the "broker-dealer exemption," the SEC proposed the rule in 1999. "Essentially, the proposed rule would allow broker-dealers to collect a fee for providing investment advice without being subject to the Advisers Act," wrote Michelle Kruger, a director of financial planning with Focus Partners Wealth, in a recent
The FPA sued the SEC in 2004, challenging the rule proposal and the later modified rule that was adopted in 2005. In March 2007, the D.C. Circuit Court of Appeals ruled in its favor by vacating the Merrill Lynch rule. Though it was a major victory, not every FPA member supported the lawsuit, 2005 FPA President and 2006 Board Chair Dan Moisand of Orlando, Florida-based RIA firm
"The firms used fear-based tactics to insinuate that the lawsuit would have terrible outcomes for their representatives," Moisand said. "Membership numbers climbed as the lawsuit continued and peaked after we won the lawsuit in 2007. We were galvanizing the profession behind a cause they felt was right."
Elizabeth Jetton, another former FPA president and board chair, told Kruger that the association viewed the case as a duty.
"We were obligated to do what was in the interest of the public, as a part of the mission to bring purpose, recognition and sustainability to our members and their businesses," said Jetton, who's now retired from planning and is an adjunct professor at
Regardless, the FPA's victory has endured as one of the organization's most significant accomplishments.
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FPA's new CEO
At this week's conference, many of the roughly 1,000 attendees may not recall the lawsuit, the former Broker-Dealer Division or the days of the IAFP and ICFP. But the principle of being open to "anybody involved with financial planning," with CFPs at the "core," remains the same as in January 2000, Moore said.
"[We] may not be for every CFP," he acknowledged of the association, but membership ranks "should be more than where we're at right now." The FPA is trying to boost numbers while "making sure we're bringing value to our members and our chapters," Moore added.
Moore said the OneFPA effort had been misunderstood, describing the lingering impact as simply creating some standard charters and optional website templates. One legacy of the project is an advisory council open to any chapter, Moore noted.
"That's a way for communicating between the national board and the local chapters," he said. "They are still their own independent entity doing what they do. We're just here to support them and help them reach the goals that they set."
Moore declined to comment on FSI's position on past fiduciary proposals, noting that the FPA will continue to push for rules that put clients' best interest first in any business model. He also paid tribute to the IAFP and ICFP leaders who started the FPA 25 years ago.
"There was enough common ground and common vision for what financial planning could become and should become that they decided it was important for them to work together rather than remaining different organizations," said Moore.
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A newish profession, full of squabbles
The roots of financial planning could stretch back long before the FPA's founding — as far back as the 19th century land-grant universities' "home economics" programs, according to Yeske's
Pre-FPA, many planners belonged to both the IAFP and ICFP, even as the organizations tussled over issues that would puzzle a layperson but provoke strong feelings among practitioners. The groups also frequently made overtures toward unification (including a failed attempt to do so in 1989) and held events at the same time and place, according to the Journal's December 1999 article on the FPA's launch.
The friction between the groups stemmed from issues like the ICFP's prohibition on product sponsorship for its annual retreats and the IAFP's move to start a "registry of financial planning practitioners" with a separate set of qualifications from the CFP mark. (The registry was dissolved after the CFP Board acquired it in January 1995.) Another touchy subject arose in the early 1980s, when the IAFP explored the idea of its own self-regulatory organization, something like a FINRA for financial planners. The pushback from ICFP and the response from the National Association of Securities Dealers, FINRA's predecessor, spotlighted the confusion of having separate professional organizations.
"They barely knew what financial planning was, let alone why two different groups were trying to represent financial planners," Alexandra Armstrong, a member of both organizations who was the 1984 IAFP president and the founder of Washington, D.C.-based RIA firm
Longtime members of FPA and its predecessors still recall the blurry lines between the groups. Michael Haubrich, the founder of Mount Pleasant, Wisconsin-based
"There was a lot of heavy lifting to get everyone lined up," Haubrich said.
The IAFP's 1997 endorsement of the CFP mark as the main designation for financial planners marked "a watershed moment," according to Richard Rojeck, chair of IAFP's board from 1992 to 1999, and a private wealth advisor with La Jolla, California-based advisory practice
"Clearly FPA got behind the right mark," he added. "We were trying to maintain the big tent structure while still standing behind the CFP mark that everyone should have."
The resulting agreement and a coin toss installed Roy Diliberto as FPA's first president and Buie, Guy Cumbie and Joseph Votava as the first co-chairs. The respective IAFP and ICFP boards approved the memorandum of understanding in March 1999, and ICFP members voted in favor of it at 81%.
"In striving to achieve universal acceptance of the value and necessity of professional financial planning, the new organization welcomes as members the wide variety of individuals and companies who have built the financial planning profession and all those who champion the financial planning process," the memo's preamble stated. "The new organization will create an environment where financial planners hold the CFP license and will encourage and facilitate attainment of the CFP mark by financial planning professionals, so that ultimately the CFP mark is synonymous with financial planner."
The document outlined "parameters for the new entity" that straddled the ICFP's emphasis on a rigorous professional credential and the IAFP's designation-neutral philosophy, with the ability for non-CFP members to have full status. The organization would have four types of members: the Broker-Dealer Division, the Corporate Division for other advisory firms, the Financial Planner Division and one for allied professionals. Today, the FPA has five kinds of membership at different prices: CFP professional, allied professionals, aspiring financial planners, academic and member emeritus.
"The thrust of FPA's message to the public will be that everyone needs objective advice to make smart financial decisions and that, when seeking the advice of a financial planner, the planner should be a CFP licensee," the document said. "The thrust of FPA's message to the financial services industry will be that all those who support the financial planning process are valued equally as members in FPA and that anyone holding themselves out as a financial planner should seek the attainment of the CFP mark."
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The future of planning
Everything the organization has done ties back to the agreement sparked by Ruhlin, Lau and their contemporaries. That led to a single organization designed to promote the planning profession — with all the messy details and negotiations entailed by efforts to codify the skills and rules for recommending a dynamic plan rather than selling products.
The creation of the FPA represents an agreement among that working group of IAFP and ICFP members that "the process of financial planning is the magic," Buie said. "The two organizations didn't change their values. They recognized a way of supporting their values that was a little more expansive than it was before."
The organization "provides a focal point for the community of practitioners" devoted to a shared mission of planning, Yeske said. "That's where the future of FPA is bright, and FPA is an essential part of the future. I'm looking forward to the next 25 years."
