One additional point:

My firm, a wirehouse, has a platform which allows us to charge a client as an "advisor" to invest their money for an asset based fee. Within this account we monitor asset allocation, can use mutual funds, stocks, ETF's, bonds, etc. There is nothing allowed in the account that might give the appearance of conflict of interest, such as our parent companies stock, common or preferred. We get paid the same 1% whether the clients money is invested in stocks, bonds, cash, whatever.  If we use mutual funds, they are load waived a shares, or no load, and ANY 12B-1 fees are automatically credited back to the clients account as miscellaneous income. This is NOT a commission replacement acccount, it is a fee for advice account, that took a lot of work to get approved by the SEC.. I dont see how this is any different, in terms of how we get paid, than what an RIA/CFP does. Can you tell me that the RIA giving advice to a client on financial planning is not "incidental" to the trading of securities"?

Listen, we can debate this all day long, with no agreement, and it will become one of those threads that just perpetuates itself to no constructive end. My original point, and what I took exception to was the implication that any RR or Insurance agent, who has passed the CFP exam, and has attained the right to use the designation, is just using the designation to gain credibility which he'she doesnt deserve. My humble opinion is, that anyone who goes through the rigourous process required to get the CFP, deserves the credibility and respect or any client worthy of his or her attention. There will be rogues in any business profession/ business model, it shouldnt take away from the large number of good people who are dedicated to improving core competency in the interest of serving the client.

[quote=pratoman][quote=AllREIT][quote=pratoman]Please shed some light
on how, if an insurance agent, or RR, actually passes the exam, his
credibility should be considered “unwarranted”. [/quote]

Because the knowledge gained and adviced dispensed will "solely incidental" to the core business of the sale of securities. It is minor dust.

I think you are painting a class with a very broad brush, which is a practice that has been proven throughout history, as being unfair, at best...     I think any RR who has taken the trouble to go thru the torture of gaininng the designation, has 1. the knowledge, and 2. demonstrated a value placed upon the core priniciple of professionalism, to be considered by any client who engages him or her, ans being "credible". I know the language of the code of ethics, and all the other rules and standards of practice, as well as the SEC requirements for being considered an advisor, such as "solely incidental". All I am saying, is that it is a gross mis statement to state that a CFP who is also a RR, is not "credible". In fact, doing so cheapens the CFP designation. 

So unimportant as to be unworthy of regulation per the SEC/NASD.

[quote]Did a wirehouse RR study less, or learn less to pass the exam than any other CFP? Whether the firm he is with allows him to act as a fiduciary or not, does he have less knowledge? And is it warranted that one would assume just because he or she is associated with a wirehouse or insurance agency, that the RR/insurance agent is NOT putting the clients interest first?[/quote]

Well given that RR's operate in a framework where they explicitly do not put the clients best interests first....

There is no reason that a RR cannot operate in the framework to which you refer, which I assume means getting compensated on a commssion base, and not still act in a way that puts the clients interest first. I am not saying that all RR's do so. But lets face facts, not all non RR/insurance agent CFP's act in the best interests first in the true sense of the word.  Have  you ever known a CFP to refer a client to an Estates and Trusts Attorney, because that attorney has referred to him, when he might have referred the client to an attorney who was more knowledgeable in the area the client needed expertise in? I have.

I'm not saying that any single person is unwarranted, but as a class it is an issue. An unavoidable issue. Thus the CFP boards recent revision (and tightening up) of the code of ethics:

[quote]The revised standards require a CFP® professional to “at all times place the interest of the client ahead of his or her own.” The new language replaces the lower standard of “reasonable and prudent professional judgment” contained in CFP Board’s current Code of Ethics and Professional Responsibility.

The revised standards also require CFP® professionals who provide financial planning services do so with the duty of care of a “fiduciary,” a term partly defined as acting “in the best interest of the client.” The heightened duty of care significantly strengthens the current requirement that financial planning services be performed “in the interest of the client." [/quote]

That's the difference between the best, and the suitable.

Again, I think you do an injustice to the CFP standard, when referring to anyone who has gone thru the rigorous training and testing to obtain the designation, as not credible, an again, i think it is not possible nor is it credible, to paint an entire class in such a fashion, as you admit you are doing. It casts a pall over those RR's who do truly care about their clients and put their interests first.

http://www.cfp.net/media/release.asp?id=161

[quote=pratoman]

One additional point:

My firm, a wirehouse, has a platform which allows us to charge a client as an "advisor" to invest their money for an asset based fee. Within this account we monitor asset allocation, can use mutual funds, stocks, ETF's, bonds, etc. There is nothing allowed in the account that might give the appearance of conflict of interest, such as our parent companies stock, common or preferred. We get paid the same 1% whether the clients money is invested in stocks, bonds, cash, whatever.  If we use mutual funds, they are load waived a shares, or no load, and ANY 12B-1 fees are automatically credited back to the clients account as miscellaneous income. This is NOT a commission replacement acccount, it is a fee for advice account, that took a lot of work to get approved by the SEC.. I dont see how this is any different, in terms of how we get paid, than what an RIA/CFP does. Can you tell me that the RIA giving advice to a client on financial planning is not "incidental" to the trading of securities"?

[quote=pratoman]

I really respect all the indies on the board, not only because you guys have a lot to contribute, but because you had the balls to take the risk. But jeez, sometimes you guys can really get on your high freaking horses!! There really are RR’s out there who take great care of their clients. really! And the ones who have earned the CFP designation by taking the same 2 day exam as the rest of the CFP’s have just as much right to use the designation as a f**kin indie, RIA or any other person who dispenses advice.

" Again, I think you do an injustice to the CFP standard, when referring to anyone who has gone thru the rigorous training and testing to obtain the designation, as not credible, an again, i think it is not possible nor is it credible, to paint an entire class in such a fashion, as you admit you are doing. It casts a pall over those RR's who do truly care about their clients and put their interests first. "

Allreit absurdly and continuously tries to define the "moral" and intellectual playing field, but can't be objective because of his own conflict of interest, from a full service planner's point of view, because he is not licensed for insurance or to handle certain securities, for example, if a client comes to him with A shares. For that matter, it remains to be seen how regulation of his platform will compare with the highly regulated insurance and broker dealer platforms. As many jump over to RIA, watch out, this whole high horse arguement may go tumbling off the embankment.

Good Points

[quote=AllREIT]
1) Prato, I think very highly of the CFP designation. Therefore I'd be concerned about the framework in which it exists.

Just like a how a small gang at Aurthur Anderson, caused irreparabile harm to the CPA profession, a smallish number of bad actors with CFP's has the potential to do the same. Especially when operating in a framework of reduced ethical standards, as happened in the past

A CFP (especially with the new standards) imposes a higher standard than the NASD RR standards.

I think this whole industry would be better off if everyone was held to that same high standards, vs the current zoo, which includes CSA's running around.

I think the new CFP is very good thing, and look positively upon people who have that education and stick to the ethical standards of the CFP Board.

2) I hope this NYT times article (which was front page, above the fold) will raise awareness about CSA's, annuity sharks, and EIAs. This can only be to the benefit of legitamate financial planners.
[/quote]

Airreit:

1. I dont disagree with those comments at all. Why cant an RR be held to the higher standard as well? If an RR is an Indie he should be held to the higher standard. Andl, as far as I know (I am admittedly not that knowledgeable on the Indie setup), CAN be. He can charge a fee for a plan, and give the client the option to go elsewere to execute, which I know many do. As far as RR;s in the wirehosues, they should be, b ut the problem is that the wirehouses dont want their RR;s to act in a fiduciary capacity, which makes no sense to me.

I can only speak for myself in that I always put the clients interests first, and still manage to make a decent living.

2. Read the NYTimes article and was happy to see the joke of CSA's and all the other ridiculous titles exposed for what they are, and equally happy to see the CFP and CFA titles put in a different light

As an aside, I amin the process of attempting to pass the CFP now, and cant imagne anyone going thru this JUST to get a "designation", or a few letters after their name.

[quote=AllREIT] [quote=pratoman]

One additional point:

My firm, a wirehouse, has a platform which allows us to charge a client as an "advisor" to invest their money for an asset based fee. Within this account we monitor asset allocation, can use mutual funds, stocks, ETF's, bonds, etc. There is nothing allowed in the account that might give the appearance of conflict of interest, such as our parent companies stock, common or preferred. We get paid the same 1% whether the clients money is invested in stocks, bonds, cash, whatever.  If we use mutual funds, they are load waived a shares, or no load, and ANY 12B-1 fees are automatically credited back to the clients account as miscellaneous income. This is NOT a commission replacement acccount, it is a fee for advice account, that took a lot of work to get approved by the SEC.. I dont see how this is any different, in terms of how we get paid, than what an RIA/CFP does. Can you tell me that the RIA giving advice to a client on financial planning is not "incidental" to the trading of securities"?

[/quote]

That type of IAR account is the same as what I'm doing. In that space you are compensated solely by the client and not from the sale/trading of securities.

With that type of account, the advice is integral to the account and compensation. With a fee-in-lieu account or traditional commisioned account, that advice is "solely incidental" and the duty of care is much lower.

The future of this industry is IAR's servicing those types of accounts. It was the Fee-in-leiu accounts that got everyone fired up. Since externally it looked like an advisory account, but had a much lower ethical standard.

Sort of like chinese toothpaste.


[/quote]

I couldnt agree more. It is why I am making that platform a more and more integral part of my practice. Perhaps that this the answer for wirehosue RR's who are and want to practice as CFP's.

So Prato how is the studying going?

[quote=joedabrkr]So Prato how is the studying going? [/quote]

Yucchh!

This weekend, got a 78 on a 40 question test taken from the actual 2004 cfp EXAM, INcluded a case study. Felt great. Then I took a 100 question MC exam, got a 54. Shoot me.

[quote=pratoman]

[quote=joedabrkr]So Prato how is the studying going? [/quote]

Yucchh!

This weekend, got a 78 on a 40 question test taken from the actual 2004 cfp EXAM, INcluded a case study. Felt great. Then I took a 100 question MC exam, got a 54. Shoot me.

I remember thinking of the exam as me being an airplane, hurtling down the runway, trying to achieve lift off. All you have to do is clear the trees. Just barely clear the trees, and achieve flight. It is completely consuming - when you make it, you’ll have even more perspective. Just clear the trees, you already have enough speed - don’t worry if you stumble or ignore some test questions - do the easy stuff first on the test where you can.

Thanks for the advice. Spoke with Keir today, they tell me tha 100 q exam had a lot of insurance questions on it (i sort of sensed that as I was taking it). I also realize there were no calculation q's on it, which there will be on the actual exam, and I am pretty ggood at that. They said that getting a 78 on the 40 question exam taken from the acual 2004 CFP exam is a good indication that I am on track. Still, keeping a deer in headlights mentality, gotta keep working hard for 2 more week.s

[quote=GolFA]I remember thinking of the exam as me being an airplane, hurtling down the runway, trying to achieve lift off. All you have to do is clear the trees. Just barely clear the trees, and achieve flight. It is completely consuming - when you make it, you’ll have even more perspective. Just clear the trees, you already have enough speed - don’t worry if you stumble or ignore some test questions - do the easy stuff first on the test where you can. [/quote]

Nice analogy…