Is Ric Edelman good enough for the Financial Planning Association? For that matter, is the FPA good enough for Ric? The questions are stirring a fresh dustup between the outspoken financial advisor and the organization.
In an interview last Friday with financial writer Andrew Gluck, Edelman—host of the nationally syndicated radio program, The Truth About Money with Ric Edelman—says he quit the FPA after three years of fruitless effort to join the Rep.’s Diana Britton wrote about it this week.) ’s board. The remarks came at the end of an hourlong discussion that focused on Edelman’s plans to launch a new online investing service this fall. (
“For three years, I tried to join the board of directors and I was told very specifically, very clearly, that they would not allow me on the board for the sole reason that I do not hold the CFP,” Edelman (right) says in an interview, a recording of which Gluck posted on his website, Advisors4Advisors.com.
“The FPA made a decision a number of years ago to align with the CFP and CFP board, and made a distinction in their membership criteria that if you are not a CFP, you are not considered to be a financial advisor,” Edelman continued. “You can be in the category of ‘other,’ such as vendors and students and other people in the , but you are not a financial advisor, according to the FPA, if you are not a CFP licensee.”
He sounds irritated when he talks about his qualifications, which include top rankings as a financial advisor by Barron’s, as a book author, and a personal finance instructor at Georgetown University—“but according to the FPA, I am not a financial advisor,” he says.
“So I quit. And because I’m obnoxious and have an ego,” he added with a flourish.
For the FPA’s side, I e-mailed board President Paul Auslander. He wouldn’t comment on discussions concerning board candidates, but he denied that the FPA requires board members to hold the certification—three current members don’t have it, he says.
There’s a big catch to that, though.
FPA bylaws state that three-quarters of the national board must hold a CFP, Auslander (below left) said. So if a candidate applied when one-quarter of the board lacked the certification, the board wouldn’t consider non-CFP holders for vacancies.
Auslander went on to dispute Edelman's assertion that a CFP was a requirement for FPA recognition.
“We have several thousand members who do not hold the CFP mark and serve the financial planning profession in a variety of advisory or investment management capacities. We have repeatedly stated that many of those within financial services and allied industries are vital to supporting the overall financial planning profession and I/we would ask him to provide a single example of FPA stating you must be a CFP to be considered a financial adviser.”
Edelman’s dis on the FPA didn’t end with his complaint about their handling of his board application.
“Most of the industry is focused on the industry—how we could we make more money, how can we reduce our regulatory burden, how we can make our lives easier,” he told Gluck. “There doesn’t seem to be much of a focus on our obligation to serve the community, employees, clients and the next generation. This kind of focus is why consumers don’t like our industry.”
Auslander said the FPA “is a professional membership organization first.
“However, we have clearly been able to make a significant mark in consumer education that is extremely evident in numerous pro bono and consumer initiatives we conduct (80+ percent of our chapters work with us on some type of consumer outreach program); partnerships which find ways to advance financial planning in the public (AARP, NAACP, military groups, national business associations, health care organizations, etc.); and educational tools, resources, Planner Q&A and tips, columns and more on FPAnet.org, which numbers in the tens of thousands of unique visitors each month,” he wrote.
It’s clear there are others in the industry that agree with Edelman about FPA; I wrote about the group’s falling membership last week. It may also be that some of the FPA board found Edelman too abrasive.
Serving on boards, after all, requires equal measures of street smarts and diplomacy in order to be effective.