In the wake of the D.C. Court of Appeals ruling on March 30 that killed the broker/dealer exemption and fee-based brokerage accounts, the Financial Planning Association is making an effort to help brokerage firms and their advisors comply, said Dan Moisand, Chairman of the FPA, at a Sunday press briefing during its annual meeting in Seattle, Washington. In particular, the FPA said it is working to help any financial advisors who use the Certified Financial Planner designation on their business cards and do not already act as fiduciaries, get registered as investment advisors under the Investment Advisers Act of 1940, and to help the firms employing them handle the additional liability this entails. Firms have until October 1, 2007 to comply with the Court of Appeals ruling.
Currently an FPA task force is working to clarify how the profession should define "holding yourself out" as a financial planner—the results of which should be released in a report some time soon, said Moisand. Moisand also said that a report released earlier this year by an FPA task force showed that financial planning professionals feel they should be regulated separately from insurance and investment advice professionals. They also feel that there should be a distinct financial planning license, and a legal forum set up for resolution of financial planning disputes, he said. The Investment Advisers Act of 1940 is not enough. Members are split, however, over whether licensing of financial planning professionals should happen on a state or federal level.
The FPA has big plans for the growth of the organization over the next few years, the group's leadership announced. The FPA plans to boost membership to 37,000 by 2010, an increase from today's 28,300 members. And whereas member retention today hovers around 80 percent, the group says that should rise to 83 percent by 2010.
In part, that increased membership will come from efforts to bring more non-planner professionals into the fold—people like paraplanners, geriatric specialists and others who want to build partnerships with planners, said Marv Tuttle, the FPA's executive director. This year's conference in Seattle, Wash., is attended by at least 2,916 participants, just a couple hundred more than last year's meeting, with some 332 international attendees from 25 countries.
Among other initiatives, the FPA says it is working to help the profession provide better service to those on the lower rungs of the socio-economic ladder—particularly the mass affluent—through technology and public relations efforts. Separately, the FPA recently launched a partnership with an organization called Junior Achievement Worldwide to teach financial literacy in the schools. So far there has been an enthusiastic response from FPA members who have offered to volunteer as teachers, said Mark Johannsen, president elect of the FPA.