COVID-19 has slowed down―or halted entirely―many businesses, industries and even our way of life. Nearly two months ago, we were seeing a thriving economy, spring training baseball, presidential campaign rallies and more, but all of that came to an abrupt end with the pandemic taking hold of our day-to-day lives and psyches. And while the disease has caused turmoil in the markets and canceled in-person conferences and events, we need to view this as a short-term inconvenience that will not get in the way of getting our work done and accomplishing our long-term objectives.
From my view, it has been heartening to see so many in financial services embrace their passions to further elevate the financial planning profession. Think about it. While this current reality is horrible, it has made those of us in the profession more aware of the need to do our parts to support our fellow practitioners and the consumers of financial services.
While we will hopefully see a "flattening of the curve" in terms of the pandemic, we are seeing a new spike of activity that is showcasing the power of financial planning. More practitioners than ever are raising their hands to offer pro bono financial planning, providing programs to boost financial literacy among the public and connecting with their peers virtually to provide support. We are seeing this within the Financial Planning Association (FPA) and across the profession.
We also can’t let this virus hinder us from further elevating the profession and effectively advocating on the federal and state policies that could influence the trajectory of the field. That means we need those passionate practitioners who believe in the power of financial planning to join their voices to advocate on The Hill and in state capitols across the country. And even though the virus has impacted the ability of the FPA to move forward with its 7th Annual D.C. Advocacy Day, which was to be held June 2-3, the FPA Board of Directors has embraced a set of 2020 Advocacy Strategic Priorities and will engage members and chapters in actively advocating for the profession—in-person and virtually.
Specifically, there are several key issues that are currently in deliberation where a continued show of strength could result in positive news for financial planners and consumers of financial services. For example:
- FPA joined with several other organizations, including Financial Services Institute (FSI), Investment Adviser Association (IAA), National Association of Personal Financial Advisors (NAPFA), LPL Financial, Cetera Financial Group, Raymond James and Commonwealth Financial Network, to form a Federal Tax Coalition that is advocating for legislation that amends the Tax Cuts and Jobs Act (TCJA). The coalition urged Congress to clarify via legislation that financial service professionals would be eligible for a 20% deduction on “qualified business income” for owners/shareholders of pass-through businesses, such as S corporations, partnerships and sole proprietorships without income threshold limits. FPA will continue to push for this throughout the year.
- In a move that could increase access to—and drive consumers to seek—financial planning services, FPA joined with CFP Board, NAPFA, IAA and FSI to ask Congress to restore and expand the pre-2017 (pre-Tax Cuts and Jobs Act) tax deduction for investment advisory fees and financial planner fees without the 2% adjusted gross income (AGI) threshold. The 2% AGI limit permitted tax deductions only to the extent they exceeded 2% of a taxpayer's AGI, which unfairly benefited upper-income households more than middle-income households. This deduction should be available to all American households regardless of income.
- And as we have seen over the past couple of years, the move toward a fiduciary standard of care is evidenced with more states considering rulemaking. FPA will continue to support regulation and legislation that would require a fiduciary standard of conduct when providing personalized investment advice and will be ready to work with our members and chapters―as we have in Massachusetts and New Jersey―when the opportunity arises.
There has been too much momentum built over the past several years to allow this pandemic to hinder us from making our voices heard on those policies and regulations that have an impact on practitioners and consumers. I believe there is power in financial planning and we must remain committed to doing what we can to continue to push this profession forward. Whether you are passionate about advocacy, pro bono, financial literacy or supporting your peers, stay engaged and stay committed.
We will get through this difficult time, and when we do, the profession will be better because of your engagement and commitment.
Martin C. Seay, a Certified Financial Planner and Ph.D., is the 2020 president of the Financial Planning Association (FPA) and chair of the Personal Financial Planning Program at Kansas State University.