4 Reasons to Fight for Financial Planners' Legal Recognition

I believe financial planning is a profession. Compared to medicine, law, and accounting, ours is a young profession but a profession nonetheless. And while those calling themselves physicians, attorneys, or accountants can do so because of the competency and ethical standards they must meet, the same is not currently in place for those calling themselves “financial planners.”

This is a profound challenge for the thousands of professionals who devotedly provide their clients with comprehensive financial planning guidance based on minimum standards of competency and ethics. But it’s a problem that can be — and should be — remedied.

Over the past several years, many professionals and industry organizations have debated the merits of protecting the title “financial planner” through legislative action. While everyone is entitled to advocate for or against those policies they deem worthy of such action, I firmly believe this is an endeavor worth pursuing.

It is an objective for which the rest of the Financial Planning Association (FPA) Board of Directors and I have such conviction, that we have unreservedly decided to make it the primary advocacy objective of the Association in the months and years ahead.

For years, we have heard from our members, chapters, and volunteer leaders that they want title protection for the term “financial planner.” A recent advocacy survey FPA conducted revealed that 78% of FPA members support title protection. As the leading membership organization and trade association for professionals engaged in the financial planning process, we owe it to our members to enthusiastically pursue this objective.

FPA will pursue this goal because we believe the legal recognition of the term “financial planner” through title protection is an acknowledgment that anyone proclaiming to be a financial planner meets minimum standards that protect consumers and advances the financial planning profession.

The push for title protection is a substantial advocacy issue that may require allocating resources and many years of planning and effort to realize. But FPA is ready to lead this push.

Why Title Protection Matters

There are four central reasons for this steadfast commitment to the legal recognition of “financial planner” through title protection.

First, title protection will distinguish financial planners from other financial service providers. Leaving the term “financial planner” undefined by policymakers means some can take liberties with the title — even if they are not providing financial planning services, which is misleading to consumers. In 2013, Cerulli Associates conducted research showing that only 38% of self-identified financial planners actually provided financial planning services. This has to change.

Second, title protection will establish minimum standards for financial planners without creating an unnecessary regulatory burden for those meeting the standards. Anyone proclaiming to be a financial planner must meet the necessary competency and ethical standards to ensure consumers receive qualified financial planning services that are in their best interest.