NAPFA Must Do The Right Thing With CPA/PFSs If It Wants To Retain Its Special Role As An Advocate For Consumers

Saturday, February 08, 2014 19:15
NAPFA Must Do The Right Thing With CPA/PFSs If It Wants To Retain Its Special Role As An Advocate For Consumers


It's been over a year since the National Association of Personal Financial Advisors (NAPFA) decided to accept as new members only those holding the Certified Financial PlannerTM (CFP®) designation. I was not happy, to say the least, about this decision and need to get this off my chest.
As a CPA/PFS (Personal Financial Specialist), I thought I would adjust to the new rules, especially since my membership in NAPFA was grandfathered, thus, allowing me to retain my NAPFA membership.  After attending the AICPA's Advanced Personal Financial Planning Conference a couple of weeks ago, however, my unhappiness with NAPFA’s decision came to the surface once again.

This Website Is For Financial Professionals Only

Why is NAPFA — a group I respect and care about so much — saying that only a single designation, the CFP, is acceptable for membership? According to the original press release, the NAPFA National Board made this decision to minimize public "confusion" and build "consumer confidence." Why CFP®? According to NAPFA Chair Lauren Locker (who is, coincidentally, a CFP®), "the CFP® designation hits the mark as a strong, baseline standard.” 
Really? A baseline standard? What does that mean? I think it means that NAPFA is against recognizing a higher standard because of its alliance with the CFP Board and the fact that there are greater numbers of CFP® holders than PFS designees.
Notably, NAPFA’s brief press release cited the relationship between NAPFA and the CFP Board several times. "NAPFA and the CFP Board have a long history of collaboration ..." "NAPFA has been a strong strategic partner with the CFP Board." Did the AICPA not adequately ingratiate itself to the NAPFA Board?
The sheer number of CFP® members of NAPFA made this decision easy to push through. During a merely two-week comment period, "responses were overwhelmingly in favor of supporting the CFP® designation as the baseline educational standard for NAPFA-Registered Financial Advisor membership."  (Again, the word baseline!)
But NAPFA members should have known better. These practitioners, who have long been considered the conscience of the financial advice business and who have become quite good as marketing themselves on that basis, should have asked themselves whether they are doing the right thing by breaking with NAPFA’s longstanding policy of treating CPA/PFS designees the same as CFPs.
For NAPFA, a group that has set itself apart from the rest of the financial advisor industry by supporting consumers, the decision to no longer accord CPA/PFSs the professional respect theys deserve, is more than just a slight, a display of badd manners. It is a betrayal of the public trust. It diminishes NAPFA. After all, why would NAPFA members want distance themselves from a financial planning designation with more stringent requirements than imposed on CFPs®?
Requirements Of NAPFA Members Versus CPA/PFSs
Must hold CFP® designation
Must be a CPA prior to becoming PFS
Must have a bachelor's degree
Must have a bachelor's degree + 1 year
Courses in PFP or equivalent knowledge
Courses in NINE PFP areas; minimum of 75 hours
Pass CFP® exam
Pass CPA & PFS or CFP® or ChFC exams
Three years if experience (or two as apprentice)
One year as CPA plus two years in 9 PFP areas
Ethics requirements & pass ethics exam
Ethics requirements & pass ethics exam
Renewal education 30 hours over two years
PFS renewal education 60 hours over three years plus CPA renewal education requirement of 80 hours over two years
According to NAPFA's website, "NAPFA's requirements exceed those of any other financial industry association." But as you can see from the chart above, it’s just plain untrue!
NAPFA is such a great organization in so many ways, and I respect its members so very much. That’s why I waited a year to say anything. I wanted to give it time to see if I would come to understand the decision. Then, attending the recent AICPA PFP conference stirred me to go public with my views because I care about NAPFA and would like to see my colleagues there reverse this policy. 
If NAPFA wants to continue to have the public’s trust, which it has earned for doing the right thing for so many years, it must always do what’s right for consumers.
CPA/PFSs hold themselves to the highest ethical and professional standards. It is wrong to discriminate against us just because some of us choose not to give the CFP Board money only to add more letters to our titles.


Comments (9)

Although I completely understand the author's frustration, I disagree with the implication.

This is not a competition between those with a CFP designation and those that do not.

This is not a competition between the knowledge and credentials required by NAPFA of individuals holding various professional designations.

This is about establishing a single designation, widely recognized by the public, that will carry the kind of weight that CPA ALREADY has, that Attorney at Law already has, that M.D. already has.

MUCH has been written about the public's confusion, even frustration, around the alphabet soup of designations out there.

Until Financial Planners begin to consolidate, and garner the academic and public acceptance that already exists for accountants (CPA, state board licensing), lawyers (JD, State bar licensing), and doctors (MD, state medical board licensing) under one Financial Planning designation, financial planners will never have what these other professions already have; a designation that, with MOST of the public, makes the expertise, in their perception, self evident.

We know that there are bad doctors, lawyers and accountants out there, but we are at a different place in our profession's evolution.

As Doctor Covey said, "First things first." This is about professional identity.

One can tell, at least infer, that we are not there yet, because of the proposition in the article. We'll be there when the author spends her time (probably very little needed, given her experience and expertise) acquiring the CFP designation, rather then trying to destroy our momentum.

KLM , February 13, 2014
You are correct that the CPA designation is highly recognized; however, there are other designations recognized in the accounting field such as Cerified Management Accountant as well as international designations. There are MDs, chiropractors, dentists, nurse practitioners and other medical professionals. CFP might have more numbers than any other single designation, but it is wrong to imply that it is the best designation just as it is wrong to state that it should be the only designation the public should trust - especially when other designations, such as CPA/PFS and CFA, require a much higher level of expertise. The CFP's current advertising campaign which states, "If they’re not a CFP pro, you just don’t know”, is misleading to the public and dismissive of other professionals who could be even more qualified and trustworthy than many CFPs. For any organization to dictate that their designation should be the only designation is self-serving. And it is disappointing that NAPFA, an organization formed to protect the public with its "fee only" message, feels it needs to support the CFP board's desire to force all financial professionals to fall under their umbrella. Sure, it would be easy for me to become a CFP, but it wouldn't be easy for the vast majority of CFP holders to become a CPA/PFS. So, why would I want to become a CFP? I feel like NAPFA and the CFP board have made a decision to hijack the entire profession. It's not right.
SherylCPA , February 15, 2014
Former NAPFA President James Willson, CFP, posted this comment on LinkedIn regarding this post: "As a former NAPFA President, I understand both sides but in this case, the organization may have erred."
SherylCPA , February 17, 2014
That Mr. Wilson has done this is, in this writer's opinion, a shame. What we are talking about here is recognition, not JUST expertise.

The public understands M.D. the public Understands CPA, and, although the public may not completely understand the the J.D. is a law degree, they know what attorney or lawyer means.

THAT's what this is about ... getting to THAT.

However, when it comes to a designation that means financial planner (the way MD means doctor and CPA means accountant)...

... the more we diffuse, the more we confuse.

Not to get behind the closest thing that we've EVER HAD TO A SINGULAR recognition, not to (as Peter Drucker would have said) exploit this change, this momentum, will lead simply to more and more debate and confusion in the public's mind.

We COULD be, in a few years, to the place where the average person that would say (when they think a friend has a medical problem)"go see a doctor," that same person (thinking that a person really needs to get their arms around their financial situation) would say "go see a financial planner."

We all know that specialties exist within any profession. But we wouldn't expect the layman to understand the exact difference between internal medicine, gastroenterology, oncology, epidemiology, and nephrology.

It's not necessary. Thy will trust that any M.D. knows enough to refer them to the right specialist.

We will probably never get to having any sort of universal recognition of CFA (the single designation for which I have the most respect). We will probably never have any sort of universal recognition for what that PFS after the CPA means (a combination designation that no doubt carries great a breadth and depth of understanding, and evidence of rigorous education.) And the years and years of history and training behind CLU/CHFC still has not garnered that designation any sort of universal acceptance.

It took a CMA (my professor in my my MBA management accounting class) to help me really understand and internalize the difference between isolating what contributes to profit, by rearranging the GAAP income statement to a contribution income statement.

But I would never realistically expect the general public to understand that kind of deep penetration into one AREA of accounting, the way I WOULD expect the public to understand, at least expect, that a CPA could point them in the right direction regarding ANY kind of accounting issue or analysis.

With the CFP, we have a shot. We have momentum.

This is not about disagreement.

This is about agreement, and getting behind the only opportunity financial professionals have ever had at a general understanding by (and protection of) the public.
KLM , February 20, 2014
I stand by my earlier comments. You are missing the point. Chiropractors, dentists, nurse practitioners and other medical professionals are not subsets of MDs. It is wrong for a self-serving membership organization to try to highjack the public into believing that CFP should be the only title the public should trust. Just because the CFP board wants to elevate itself to power does not mean it is best for the public.
SherylCPA , February 20, 2014
KLM: Your personal attack on James Wilson is beneath the respect for divergent opinions befitting a professional forum. Please temper your comments in the future and consider them more carefully. In this forum, James Wilson should respected for saying what he thinks publicly, not lambasted. Whether you agree with him or not, taking a leadership position and saying where you stand publicly should be respected. I don't want to chill the discourse. But the time and commitment people take with serving on any Board of Directors -- and perhaps especially a Board like NAPFA's with so many entrepreneurs -- should be remembered when people step up to take leadership positions. What James Wilson did was not shameful, but is to be praised.
agluck , February 20, 2014

I respectfully submit that using the colloquialism, "that's a shame," or "it's a shame that ..." is a VERY DIFFERENT from calling someone SHAMEFUL.

If that was anyone's connotation, my apologies.

However, looking back at my comments, I think the reasonable reader would have inferred my meaning; that I think it's shame that this important individual took the position he took

The pronoun "this" in my phrase "that Mr. Wilson has done this" was a response to Ms. Rowling's reference top a COMMENT made by Mr Wilson, not any sort of reference to the person, or the person's character.

And quite honestly my intuitive response when I saw your response, Mr. Gluck, was that your (1) characterization of my comment as a personal attack and (2) turning "it's a shame that ... " into calling someone shameful is the post that elevates this to something personal, not mine.

Now, as to Ms. Rowling's most recent comment that I am missing the point, then saying "Chiropractors, dentists, nurse practitioners and other medical professionals are not subsets of MDs....

I never mentioned any of those professions. Nor did I refer to any group as "subsets" of another.

My comment was the following:

"We all know that specialties exist within any profession. But we wouldn't expect the layman to understand the exact difference between internal medicine, gastroenterology, oncology, epidemiology, and nephrology. "

I stand by the logic and the passion of my post above, submit that NO one was personally attacked, and would like to remind any reader here that the first amendment protections of freedom of expression apply here.

Since Gitlow v. New York, 268 U.S. 652 (1925), we've had Holmes' very reasonable bright line, regarding what speech is protected and what is not; "The most stringent protection of free speech would not protect a man in falsely shouting FIRE in a theatre and causing a panic."


(1) use phrases like "personal attack,"

(2) paint my saying "it's a shame" as calling someone shameful,

(3) characterizing my comments as "beneath the respect for divergent opinions," and

(4) using phrases like "publicly lambasted" ...

is much closer to shouting FIRE than anything I said here.

I DO, most certainly, respect Mr. Wilson for saying what he thinks publicly. Further, my thinking that it's a shame that Mr Wilson took this stance shows that I DO respect Mr Wilson. If I didn't, his comments would have mattered to me.

KLM , February 21, 2014
(Apologies for the typo)

I said, in the last paragraph above, ...

"I DO, most certainly, respect Mr. Wilson for saying what he thinks publicly. Further, my thinking that it's a shame that Mr Wilson took this stance shows that I DO respect Mr Wilson. If I didn't, his comments would have mattered to me."

I meant "... If I didn't [respect Mr. Wilson] his comments would NOT have mattered to me"

KLM , February 21, 2014
As a former national Chair of the AICPA PFP Division Executive Committee, and with the knowledge of the politics of the alphabet wars going back many years, all I can say due to confidentiality agreements is that there is something behind the actions of NAPFA and probably the CFP Board remind me of Ben Franklin's saying that "fish and company stink after three days." My guess as purely an individual, no longer on any AICPA committees and certainly not speaking for the Institute, is that there is at least a grain of truth to Sheryl's observations related to an attempted power grab by these organizations.

Why would NAPFA align themselves so strongly with the CFP designation. Perhaps that is a question whose answer might get to the bottom of the "why" behind their action. As Simon Sinek always says, "Start With Why." Could it be that NAPFA has been challenged to grow its numbers significantly enough to wield enough industry power to gain the national recognition for its members that CFP attained? And could it be that by pushing for an alliance with the 1000 pound gorilla that is the CFP organization, like through osmosis, NAPFA would become assimilated enough into the CFP culture that they would gain stature by association?

Or would it be guilt by association? Would the organization be selling out its founding principles to become assimilated into the organization that it fought for years to differentiate itself from?

As to the reason that NAPFA believes that only by having one designation that the public will recognize as being the recognized designation conferring the aura of professionalism around financial planning services, I say what a red herring that is. Ask any medical patient who finds out they need the services of a doctor with a specialty in the area they need help with, and I guarantee you that they will know the difference between a board certified proctologist and a board certified thoracic surgeon! I think it is rather demeaning of the public's intelligence to assume they don't know the difference between internal medicine, gastroenterology, oncology, epidemiology, and nephrology, as you stated.

The point is that CPAs do have similar specialty designations. As a CPA financial planner, I want the public to recognize that just as in the medical field, CPAs with the PFS designation are specialists in providing financial planning. And another point that is overlooked, the AICPA is committed to their specialty credentials. The PFS is not going away. The AICPA is not going away. As a national organization, the AICPA has a lot of clout. To attempt to diminish the relevance and professionalism of CPA/PFS practitioners by attempting to brainwash the public into thinking that only the CFP credential represents the only valid financial planning credential is not only NOT in the public interest as Sheryl said, but is a subversion of the truth. Of course, all this is only IMHO.
a guest , February 21, 2014

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