Executive Summary
Five years ago, Kevin Keller became the CEO of the CFP Board, and at a unique and challenging time for the organization. The CFP Board had just announced its decision to relocate to Washington DC, which was likely to turn over most of the staff (at least, those who were left, as prior CEO Sarah Teslik had just slashed the headcount of the organization by nearly 40% in the preceding few years). Beyond staffing issues, the organization seemed to be in turmoil, with one leadership blunder after another, and Keller himself was entering as the 7th permanent or interim CEO to fill the role with the CFP Board in as many years.
Given that Keller was essentially an "outsider" at the time - experienced in leadership at another organization, but with no particular background or connection to the financial planning world - it was not clear how would he (re-)shape the CFP Board as he took over, with the rare opportunity, and danger, of re-staffing the entire organization from the ground up. Would it be the fresh start the CFP Board needed, or would the outsider unfamiliar with the challenges of the industry and the organization blunder?
Looking back over the past 5 years of the CFP Board, the conclusion seems clear now - although the CFP Board's central role in the financial planning profession continues to make its decisions controversial from time to time, the reality is that the organization under Keller's leadership appears to be entirely reinvented, and in a very positive direction. Although there are definitely some challenges that remain, this isn't your father's CFP Board anymore.
The inspiration for today's blog post is a recent interview I did with CFP Board CEO Kevin Keller. Not long after Keller first took over five years ago, I wondered aloud on this blog "So who is Kevin Keller?" and whether or what impact he might have on the organization. Looking back now, it's clear that Keller's impact has indeed been significant.
Improved Transparency And Communications
One of the most significant changes in the CFP Board over the past five years has been its depth and frequency of communication. Historically, the CFP Board was viewed as a very closed organization, that often unleashed "bombshell" announcements and changes to the financial planning world with little input from the community and after a decision had already been made by the Board of Governors, resulting in an uproar and backlash from its CFP certificant base. The problem was not aided by the fact that the CFP Board routinely communicated that it viewed its primary constituency as the public (as a 501(c)(3) organization intended to establish and protect the CFP marks for the benefit of the public), often implying that it didn't even view the CFP certificants themselves as material stakeholders in the organization.
During our interview, Keller remarked about one of the memorable early experiences he had after taking over the CFP Board, when in preparing some written communication that would go out to all CFP certificants, the public relations director suggested that it would be a good idea to note in the message that CFP certificants are considered valuable stakeholders in the organization. "The fact that it even needed to be said," noted Keller, "was a clear indicator of the CFP Board's deficit in the trust bank with its own CFP certificants."
So what's changed now? Significant policy changes from the CFP Board are routinely released for comment, before being implemented, such as the recently proposed changes to CFP CE requirements. And as evidenced by the final version of the new CFP Board experience requirements, the organization truly does appear to listen to the comments, as the rules ultimately adopted were significantly different than the original proposal. In addition, every national board meeting of the organization is now followed by a Business Update webinar to provide information for the community about the latest activity of the organization; in fact, if you miss the session, all the update webinars are publicly available on the CFP Board's YouTube channel! Keller and members of the Board of Governors leadership also meet with CFP certificants throughout the country every year on a series of road trips called the CFP Certificant Connection.
To say the least, the CFP Board under Keller's leadership has taken an entirely different, positive, and more proactive view on communicating constructively with the CFP certificant community and the organization's other stakeholders.
Other Changes At The CFP Board
Keller notes that expanded communications with stakeholders, especially through the Certificant Connections meetings, was also the genesis of the CFP Board's current public awareness campaign - an arguably controversial move that led to a nearly 80% increase in CFP re-certification fees and has almost doubled the operating budget of the organization from just under $15 million/year to nearly $30 million. While the proposal generated no small amount of flak at the time, the CFP Board insisted from its surveys and communications with the planning community that there was widespread support for the campaign, that CFP certificants wanted better visibility and recognition of the marks from the public, and that the CFP Board was capable of having an impact. Although the public awareness efforts are still underway - due for a substantive review from the Board of Governors next year at the 2-year mark for the campaign - the early indications are that the public awareness campaign is already having a small but measurable success impacting the public's recognition of the marks.
Beyond communications with stakeholders, the CFP Board under Keller's leadership is generally more proactive and willing to "play well with others" and work constructively with the FPA and NAPFA, especially regarding regulatory and advocacy issues through the Financial Planning Coalition. While some still lament the fact that the CFP Board no longer openly shares its list of new CFP certificants with the membership organizations the way it did a decade ago (which Keller indicates is simply not feasible anymore, and perhaps shouldn't have been occurring in the first place, given the CFP Board's privacy agreement with CFP certificants), Keller notes that the leadership of all three groups are in monthly contact (and more frequently as necessary) and states that the relationship between the groups is as strong as it has ever been.
The CFP Board has also recognized that there is ongoing concern for effective enforcement of the CFP certification marks, and has been making efforts to improve in that regard, including the appointment of a new Director of Investigations position within the organization, making arrangements with the SEC to allow firms to release information regarding customer complaints without violating customer privacy provisions to help facilitate the CFP Board's investigation process, and the publication of new Sanction Guidelines, amongst other changes.
And throughout all of these other changes, it's notable that the CFP Board itself continues to grow. On the day of our interview, the CFP certificant base had just reached a total count of 66,666 - an increase of just over 20% from when Keller first took over, despite having navigated a significant recession, and despite the fact that the overall number of financial advisors in the industry has remained stagnant for nearly a decade.
Challenges And Opportunities From Here
Notwithstanding the significant, positive changes the CFP Board has made, some challenges and uncertainty remain about where the CFP Board goes from here.
Perhaps most notable is whether or what role the CFP Board will play in the emerging regulatory battle on the oversight of financial advice. Keller notes that the CFP Board does not envision itself sending out examiners to do on-site investigations, implying that the organization's ultimate role could be setting the regulatory standard - if the CFP certification became required for delivery of financial advice, as the CPA license is required to be an accountant - but not necessarily being the regulator that enforces it. In fact, Keller expressed a vision that he'd like to see the CFP certification ultimately move away from being the gold standard in financial planning, but instead simply become the standard.
In the nearer term, though, this raises the question about whether the CFP Board can "keep its house in order" or whether the CFP certificant base will become filled with people who just want the marks as good marketing cover (built on the back of the CFP Board's public awareness campaign) to sell abusive products. The issue became highlighted again in a recent article on the Wall Street Journal's personal finance blog, entitled "Is The Fiduciary Standard A Joke?" that looked at a situation where a CFP certificant gave what at best was highly questionable (and non-fiduciary) advice, yet was not publicly sanctioned.
Granted, the case occurred in the past, and the CFP Board has continued to raise its standards since then (in point of fact, the addition of a fiduciary standard of the CFP Certificant Practice Standards only came about in 2008), but the issue remains whether the CFP Board can and does sufficiently enforce its own standards on its own certificant base. In point of fact, one of the most common complaints I still hear levied at the CFP Board is that it grants the CFP marks to so many people who don't really do financial planning, yet still hold themselves out as such - even if it's a violation of the CFP Board's Practice Standards, it's not entirely clear whether the organization truly has the capabilities to enforce the standards as such, and right now some CFP certificants may skirt the fiduciary obligation by claiming they're CFP certificants (for marketing value and credibility) but not actually doing financial planning (the fiduciary standard only applies if two or more material elements of financial planning are delivered to the client, and there's no restriction against promoting that you're a CFP certificant but avoiding the fiduciary standard by just not doing financial planning for the client!).
Nonetheless, the reality seems to be that the CFP Board today is nothing like the organization was in the decade(s) prior to when Keller took over. With a combination of new leadership and an entirely new staff, the loss of institutional memory when the CFP Board relocated from Denver to Washington appears to have done far more good than any harm, as the organization has spent the past five years reinventing itself and repairing its relationship with CFP stakeholders, and is increasingly positioning itself at the center of the financial planning profession after years of resisting the role.
So what do you think? Has Kevin Keller done a good job with the CFP Board since taking over the organization? Has the CFP Board's communication and transparency improved? Has the CFP Board resolved its "trust deficit" with CFP certificants? Is the organization going down the right path?
I like the general direction things are heading, but really wish the CFP Board would step-up and take hold of regulatory issues in a similar manner to the Bar or AICPA. I am not sure I understand the hesitation, particularly if the ultimate goal is to be THE standard. I would applaud it, I would support it, and it is absolutely something CFP professionals would rally around.