FPA to pursue legal recognition of the term ‘financial planner’

DENVER (July 21, 2022) – The Financial Planning Association announced today that the Association will lead a multi-year advocacy effort to achieve the legal recognition of the term “financial planner” through title protection. The decision, announced today during an annual ‘State of FPA’ Virtual Update, will focus the Association’s advocacy efforts in the coming years and will reinforce FPA’s role as a leader in the financial planning profession.

“Financial planning is a true and noble profession that must require practitioners to achieve and maintain standards for competency and ethics,” says 2022 FPA President Dennis J. Moore, MBA, CFP^®. “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 advance the financial planning profession.”

The pathway to the legal recognition of financial planners has been a topic that has been discussed and debated by some financial services organizations and professionals for years and has been explored by the FPA Board of Directors and the FPA Public Policy Council. The FPA Board of Directors considered the future of the Association’s advocacy efforts and stakeholder input, including recent research that showed 78% of FPA Members support title protection. As a result, the Board decided to make the legal recognition of the term financial planner through title protection the central focus of FPA’s advocacy efforts for four central reasons:

 

1. Title protection of “financial planner” will distinguish financial planners from other financial service providers. If federal and/or state policymakers continue to leave “financial planner” undefined, some will take liberties with the title – even if they are not providing financial planning services.

 

1. Title protection will establish minimum standards for financial planners without creating an unnecessary regulatory burden for those meeting the standards.

 

1. Title protection will enable consumers to identify and engage with a qualified financial planner for holistic, comprehensive financial planning services, armed with the confidence that their financial health is the focus of that relationship.

 

1. The legal recognition of the title financial planner is a critical step in recognizing financial planning as a distinct, essential profession. Financial planning is an honorable but young profession, essential to consumers' well-being, and dedicated to society's betterment. Still, it has yet to achieve the same level of recognition as other honorable professions, such as medicine, law, and accounting.

 

In the coming months, FPA leaders will engage Members, partners, allied organizations, and other groups on the Association’s goal of title protection and explore the many potential strategies FPA may pursue.

“Presently, there are no minimum 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. Our work in the months ahead, charting our course and identifying the minimum standards for anyone calling themselves a financial planner, will be critical to this endeavor,” added Moore.

FPA will provide regular updates at financialplanningassociation.org and through other means of communication with Members and other stakeholders.