Journal of Financial Planning: December 2017
Bill Harris, CFP®, is a co-founder and principal of WH Cornerstone Investments and president of the board of directors for FPA of Massachusetts. He is passionate about empowering widows with their financial future. A frequent contributor to the Journal, you can follow him on Twitter @whcornerstone or @billmharris.
He was an artist, merchant, manufacturer, and most importantly, a professional. He was a man with a stare and a persuasive personality. A man cut from a different cloth. Daniel Chester French remains one of the most acclaimed sculptors in American history. He’s probably best known as the sculptor of the Lincoln Memorial in Washington, D.C. His statues exude perfection. He was all business; successful by all measures.
Recently, I visited Chesterwood, French’s art studio and summer home in the Berkshires. In an uncanny way, his work made me think of our profession. Financial planning is part art form, business, science, abstract thoughts, theory, and human understanding. It is truly a unique profession. Our obsession with comparisons to other learned professions like law or medicine should be curtailed, because there is no comparison. We are members of an exclusive craft.
We have become one of the most important and impactful professions on the planet. Revisions to our standards of professional conduct or licensing schemes pale in comparison to the simple notion that we need to believe what the CFP® marks stand for.
Defining a Profession
Earlier this year, I met with leaders from the legal and accounting fields as a representative of FPA of Massachusetts. Navigating the cobblestone streets of Boston with straggling groups of weary commuters made me reflect on how far our profession has come.
The purpose of the meeting was to determine how our respective professional trade groups could collaborate with each other. Sitting down with CPAs and lawyers to discuss such a collaboration may seem like no big deal; however, for the CFP® professional, this was not always the case. Other professions do indeed view the importance of our standing, so why the self-doubt?
Our profession seems to suffer from an identity crisis, more so in my opinion from those who have been at it for a longer time. It seems to me that younger planners embrace the profession without the impediments of philosophizing on what the profession should be.
Financial planning is complex and multifaceted in its functions and roles. Collectively, we serve multiple generations, different classes of people, all with different goals. If you toss in words like fiduciary, broker-dealer, registered investment adviser, compensation neutrality, fee-only, and many others, framing the profession into a neat, definitive standard becomes challenging. While our expertise may be varied and therefore appear muddled, we are without a doubt a “defined calling.”
The Encyclopedia of Business Ethics and Society calls a profession a group of people organized to earn a living by providing a service at a standard higher than law, market, and (ordinary) morality demand. According to that definition, we certainly pass the litmus test of a “real” profession. Between the Certified Financial Planner Board of Standards and professional associations like FPA, we are a well-organized profession; we adhere to standards higher than the status quo.
The most respected fields require formal education, prolonged training, and strict qualifications for entry. Between college requirements, advanced degrees, certification, and ongoing continuing education, CFP® professionals must undergo a rigorous and ongoing structure of academic proficiency to enter and remain in the profession. The scholarly aspect of our profession has earned the public’s respect.
The Work Ahead
Our vocation is not perfect yet; there is still much to be done.
Why would we voluntarily burden our livelihood by inviting regulation, potential licensing, and an allegiance to a multi-page Code of Ethics and Standards of Conduct, when a simple, one-sentence prudent man rule serves the same purpose? Because we believe our profession will benefit by taking on these burdens. By adopting standards and adhering to other regulatory requirements, we can reinforce the protective moat around our craft. But, we have to do it right versus just doing it.
Many claim a license will give us legitimacy. Although some may cringe at the thought of another regulatory hurdle, I must admit—erecting barriers strengthens our profession. I recently conversed with Michael Kitces on the subject of licensing. He had a great quote (I’ll paraphrase here): “The more trusted financial planners become, the more lucrative it is to become a financial planner scammer who uses the title with the sole and deliberate intent of abusing that trust for their own enrichment. The attempt to elevate a profession without the regulatory licensure that goes with it just invites the charlatans into the tent with us.”
I believe CFP Board has done an exceptional job of promoting the CFP® marks. Marketing our qualifications and our standard of excellence has done far more to elevate our profession than any license has or ever will. However, if licensing or some other means can crush “hold-out” imposters, let’s erect those barriers.
We also need to address the tug of war for legacy between boomers and millennials. Both groups contribute to the profession. In my opinion, the boomers have already endowed upon us vision and values; now it’s time for them to loosen the reins. The destiny of the Gen-Xers and millennials is to further build this community, infuse it with technology, and create unprecedented influence and affluence.
While we have competition amongst ourselves, we must strive to constantly elevate the role of the CFP® professional. Destiny has given us an array of opportunities, special privileges, and powers.
Daniel Chester French followed his instincts often against conventional wisdom. He studied his art form in Italy, while all other sculptors of his day headed to France. He had the foresight to outsource to other craftsmen. He regularly collaborated with professionals from related fields. Ultimately, he did what he thought was right. He earned many commissions and added value every step of the way. The impact of his works has withstood the test of time. Just like French’s virtuosity, good financial plans will have influence for generations. Isn’t that the true measure of what we do?
Future generations may redefine our current institutions and vocation. Whether it’s our work, our structure, our impact on society, or our upward mobility, our members have respect and enjoy greater status than ever before. The financial planning profession has arrived.