CFP Board out of touch with founding principles
Has anyone aside from me noticed the changes at the Certified Financial Planner Board of Standards Inc.?
Has anyone aside from me noticed the changes at the Certified Financial Planner Board of Standards Inc.?
It seems to me that during the past 15 years or so, the Washington-based board’s makeup and its thinking have shown a prejudice toward fee-only types with high-net-worth clients. The new CFP rules are a classic example of the board’s callous attitude toward smaller clients and their financial advisers.
In addition, for a not-for-profit entity, it seems mighty profitable.
According to the CFP Board’s 2006 annual report, the latest one it released, it had revenue of $16.9 million, expenses of $9.1 million and “profits” of $7.8 million. This is a 46% after-tax margin, which is about three to four times the margins of the CFPs that the board oversees.
Has no one noticed also the huge pile of money that the CFP Board has accumulated? Net assets as of 2006 were $20.4 million, up from $12.1 million in 2005.
Why set fees so high to certificants and examiners just to build a giant pile of money? I worry that these huge profits and assets may lead to extravagant spending and pay for employees.
I have always supported the industry organization and was active at both the local and national levels. And I do believe that it serves a good purpose.
I just think that the CFP Board has lost touch with its founding principles and become too political.
Lately, it sure looks to me as if it could meet its budgetary needs with lower fees. I and others with whom I have spoken resent being overcharged just so that the board can dole out our money.
This sure feels like a government entitlement program with high taxes. And considering the industry, I find this ironic and terrible.
Thomas Dillon
Branch manager
Dillon Financial Services LLC
St. Louis
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