What is title protection for financial planners?

Title protection is the legal recognition of the title ‘financial planner’ by state or federal policymakers. Today, anyone can call themselves a ‘financial planner’ whether or not they meet threshold standards. Title protection will enable consumers to identify and engage with a qualified financial planner without creating an unnecessary regulatory burden for those who use the title.

Why does FPA believe title protection is needed?

FPA believes financial planning is a noble profession worthy of recognition and legal protection and, as such, anyone representing themselves as a ‘financial planner’ must be qualified to provide these critical services based on threshold standards for competency and ethics.

Why is FPA pursuing title protection now?

Title protection has been discussed by professionals and many industry organizations in recent years. The FPA Board of Directors, after many internal discussions and after reviewing our latest survey that shows nearly 80% of FPA Members want title protection, determined that the Association will pursue this as its primary advocacy objective.

How did FPA arrive at its decision to pursue title protection?

The pathway to legal recognition of financial planners has been discussed at various levels over the years by FPA and others in the financial services industry and the financial planning profession. It’s an issue of interest to our Members and communities, and the drumbeat of interest has grown exponentially in recent years. Based on the feedback received from our Members, including our most recent advocacy survey that shows 78% of our Members support title protection for financial planners, the FPA Board of Directors unreservedly decided that the pursuit of title protection is an ambitious, prudent objective for the Association, our Members, and advances the financial planning profession.

What are the potential benefits of title protection?

Title protection benefits everyone. Financial planners will receive the recognition they deserve for meeting certain competency and ethical standards, the public will become more aware of the value of financial planning, and consumers will be assured that their financial planner has the qualifications to stand behind the title.

How will title protection benefit consumers specifically?

Consumers are confused as to who they can trust to provide financial planning due to the alphabet soup of designations and the general use of the term “financial planner” for marketing purposes. Clarity in the marketplace is critical to ensuring a consumer can identify and engage a financial planner who can build a plan for financial health. Not only will title protection ensure that anyone professing to be a financial planner is qualified to address the full range of financial issues consumer face, but consumers will be able to trust that their financial health is the focus of their relationship with a financial planner.

What does FPA believe the threshold standards for competency and ethics should be?

Currently, there are no threshold standards for competency and ethics for those professing to be financial planners. Some credentialing bodies have their own prescribed standards, but policymakers have established nothing at the state or federal level. In the months ahead, FPA will engage constituents across the financial planning ecosystem in exploring this issue to identify the threshold standards necessary to protect consumers, advance the profession, and ensure anyone calling themselves a financial planner must meet.

When will you come out with your list of requirements and standards?

FPA will be very open and transparent about the standards we believe will protect consumers and advance the profession after fully engaging our stakeholders — free of any artificial limitations or preconceived notions of what the standards should be. We want to take the time needed to hear from our stakeholders and other groups in this profession to advocate for those standards that are in consumers’ and financial planners’ best interests.

Will FPA include the CFP® designation as the standard to be met for someone to hold out as a financial planner?

FPA is focused on the threshold standards one must meet to merit the right to use the title “financial planner.” We are not focused on specific certifications that may or may not meet those threshold standards. 

Does FPA continue to recognize CFP® certification as a standard in financial planning?

FPA’s mission is to serve the needs of its Members and to establish the value of financial planning and the success of the financial planning profession. While FPA believes that anyone holding themselves out as a financial planner should seek the attainment of the CFP® mark, FPA also believes legal protection of the title “financial planner” is a different but complimentary issue that the profession must address — a mission that FPA has chosen to lead on behalf of its members.

Are you envisioning a true profession with standards, accreditation, and all the accoutrements that go with professionalization?

When we talk about title protection, we are talking about ensuring those who claim to be “financial planners” are meeting threshold standards for competency and ethics to be called a “financial planner.” We believe that like medicine, financial planning is an essential profession that should be held in high regard by those practitioners professing to be “financial planners” and by members of the consuming public who seek financial planning services.

Who and how will these standards be enforced?

FPA is focusing on standards one must attain to merit the right to use the title “financial planner,” rather than certifications or designations. Nothing more than that. Downstream, FPA expects it will be contingent on entities responsible for administering the title to ensure industry designations and certifications meet those threshold standards.

Aren’t the regulations in place already enough?

No. Current regulations don’t address the ‘financial planner’ title. The current patchwork of federal and state laws regulates only certain aspects of what financial planners address in the financial planning process, like investments or insurance. This patchwork has led to consumer confusion about who is - and who is not - a financial planner and the opportunity for some in financial services to take liberties with the title. Title protection is not about creating more regulatory burdens. Rather, it is about the adherence to threshold standards for competency and ethics by those professing to be financial planners.

Does FPA envision developing another designation for the term “financial planner”?

We are not advocating for another designation. The reality is that the existence of so many existing designations is one of the problems consumers face when selecting a financial planner. Just because someone has letters after their name doesn’t mean they have the competency to be called a financial planner. We are focused on threshold standards for competency and ethics – not designations.

Will FPA proactively advocate for title protection on the state or federal level?

FPA is open to both on behalf of its Members. The specific strategies we will employ in our pursuit of the legal recognition of financial planners through title protection are to be determined. FPA intends to engage internal and external stakeholders in the coming months to explore various strategies available at the state and federal levels.

What are the next steps FPA will take to achieve the goal of legal recognition through title protection?

This will be a long-term endeavor that may take years and considerable resources to achieve. FPA intends to proceed prudently to ensure our greatest chance of success. In the months ahead, we will be engaging in discussions with critical stakeholder groups, including our Members, chapters, and partners, about what title protection means and their views on the potential approaches to take. This will take time, and we will all need to exert some patience, but we are resolute and know this is the right thing to do for our Members and our profession

When you say you will be reaching out to various constituencies, who do you have in mind? What’s the plan?

We begin our engagement with internal and external stakeholders this month (January), and the journey begins with our Members. We will conduct a series of virtual town halls for FPA Members and regional meetings with FPA chapter boards to continue to socialize the issue and its context and hear from our critical stakeholders throughout 2023. 

How long will it take to achieve title protection?

We are going into this effort knowing this will be a multi-year objective. We are prepared to take the time needed to see it to fruition

How much will it cost FPA to pursue this goal?

That will be determined based on the strategies we will ultimately use to engage in this important advocacy effort. There will be a financial cost, but it will also cost other valuable resources, including staff and volunteer time. While title protection is a strategic priority for FPA, we will ensure that it will not hinder our work in serving the needs of our Members in other areas.

What other organizations are in support of this goal?

FPA will engage other organizations and partners in the months ahead. Regardless of which organizations ultimately support this goal, we know this is the right focus for FPA’s advocacy efforts in the years ahead.

Are CFP Board and NAPFA on board with title protection?

Over the years, FPA has discussed the idea of the legal recognition of financial planners through title protection with CFP Board and NAPFA leaders. While we would like the support of every organization that caters to the needs of financial planners to join us in this endeavor, we recognize that each organization has to determine for itself whether it is something they can support. Whether they support this endeavor or not, CFP Board and NAPFA are good partners, we respect them, and we look forward to working with them on this or other issues in the future.