Skip to content

Two Birds, One Stone

One of the most interesting things I'm learning through our annual Insider's Forum conference is how the planning profession is divided into very distinct tribes. To serve each constituency, we're jumping through extra hoops to provide CE credits for people with the CFP designation, and also NAPFA CEs, and CPA CPEs. As we bring in attendees from different tribes, I'll introduce the attendee who has served for years on the AICPA PFP Section Committee, and is known to all at the PFP annual conference, to a well-known member of the NAPFA community-and discover that their paths have never crossed before. Not only that, they often have never even heard of each other. And yet they're both extremely prominent contributors to the same profession.

Everywhere in our hallways, there are dozens of these meetings across tribes, new friendships are formed, and you get something important and unusual: a cross-fertilization of ideas and perspectives. Each group has its strengths. The CFP community members are often advanced in life planning, while the CPA advisors tend to have a powerful command of tax, estate and technical strategies. IMCA members tend to focus on investment due diligence and portfolio construction.

I confess that I'm enjoying the fact that our conference is unique in this cross-cultural orientation, and I really enjoy the conversations that emerge. But I can't help wondering whether the profession, going forward, is best served by all these insular tribal divisions. But then I look around and wonder where we would find a common home for everyone, where these cross-culture discussions would happen routinely until, eventually, advisors were all truly members of one unified profession. And I don't see a solution at hand.

None of the organizations we have now-the FPA, IMCA, NAPFA, the AICPA PFP Section-seem to me to be ideally suited to serve as the home for all things financial planning. The FPA will allow anyone to join regardless of credentials or regulatory history, which seems to me to be too broad, while the other organizations tend to focus their energies on vibrant subsets of the profession. Our planning world has nothing like the American Bar Association, and nothing like it on the horizon.

At the same time, the profession has another problem that urgently needs to be addressed. Wall Street and the top sales agents among the independent broker-dealers and insurance companies have done an amazing job of muddying the distinction between a professional and a sales person. In an ideal world, these would be very distinct professional activities, and the consumer would have at least a faint clue that the recommendation made by Advisor X is the best Advisor X could find, while the recommendation made by Advisor Y results in winning a sales contest and a trip to the Cayman Islands.

What's interesting here is that the two problems-one internal, one consumer-focused-have the same potential solution. The profession could create one omnibus organization that supplements the tribal organizations we have now, but which only permits membership to Advisor Xs and excludes Advisor Ys (who would, of course, be free to create their own organization, although they already have SIFMA and the FSI). Most of the valuable member services to the profession would still be provided by the tribal organizations, which would continue to host their annual conferences. But the (let's call it) professional organization would list all the Advisor X members from each of the tribes under one banner, somewhere on the Internet, allowing consumers to check whether they're getting recommendations that will serve their best interests or add to the billions accruing in a Wall Street bonus pool. It would also facilitate important industry discussions, in a broader way than the Financial Planning Coalition does now among the various boards.

Of course, the question of the hour is how this professional organization could possibly come into being without seeming to be a mortal threat to the existing membership organizations. One possibility is to have its dues cover membership in the tribal organization of your choice. You join the professional association, and you have a menu. Would you also (if you meet the standards) want to be a member of NAPFA, or IMCA? If you have the CPA and PFS credentials, you'd probably check off the PFP Section option. The point: each member of the professional organization would also be a member of at least one underlying membership organization.

How soon can we make this happen? I suspect that the longer Wall Street and the cleverest insurance sales agents obscure the distinction between professional advice and sales pitches, the more professional advisors will start demanding some kind of resolution. And the longer the SEC hems, haws and temporizes, the longer FINRA pretends to be a credible regulator rather than the staunch protector of the Wall Street/independent BD business models, the more our real professionals will realize that nobody is coming to their (or the consumer's) rescue.

I'm in a hurry, but I'm going to have to wait for the profession to catch up with me on this issue. Meanwhile, I can console myself with looking forward to seeing those interesting cross-cultural conversations at our own conference in Chandler, AZ this September-and, as far as I can tell, nowhere else in our emerging profession.