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CFP® Makes Decision About State Regulations

How Many Rules Are Too Many in Financial Planning?

 

In the financial industry, streamlined service matters. It matters a lot.

Providing a consistent, efficient set of steps and strategies is very important when it comes to successfully helping guide clients on their unique financial journeys. As a possible “patchwork” of differing state-to-state regulations for financial planners lands on the table, many professionals are speaking out.

 

The Certified Financial Planner (CFP®) Board of Standards (CFP Board) has taken a stance in regard to state regulation of planners. Richard C. Salmen, 2018 Board Chairman of the Board of Directors for the CFP Board, Inc., said the CFP Board opposes the state regulations.


Salmen, who is also President of Family Investment Center, stated in an Investment News article that planning has developed as an interstate profession, rather than intrastate, and that many financial planners have clients in multiple states.

With most state legislatures out of session, the CFP Board is lobbying against bills that would seek to regulate the financial planning process at the state level. With a patchwork of legislation that would differ from state to state, it would make streamlined service more time-consuming and complicated for planners helping clients.

“We just don’t see that as the right way to regulate this new profession of financial planning,” Salmen said in the article. Furthermore, according to a survey by the CFP Board, only 13% of CFP® professionals favor a state regulation.

Another issue with state oversight is that some CFP® professionals would have to answer to the Securities and Exchange Commission, state regulators and the Financial Industry Regulatory Authority. Most would be encumbered by having to follow three different organizations’ rules.

While the CFP Board does not take issue with federal regulation, the Government Accountability Office carried out a study on financial planning and the results of that study did not signify cause for legislation requiring federal oversight. The CFP Board enforces educational and ethical requirements for over 80,000 CFP® professionals in the United States.

At Family Investment Center, we’re proud to have opened our offices from day one as fiduciaries – always putting the interests of our clients first and never operating on a commission-based philosophy. Contact us today and let’s talk about your next steps.

 

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