Thursday, October 22, 2009

Find a Cause and Get Involved!

Too many people accept the status quo and say thank you and then complain as opposed to getting off their keesters and doing something about it. Being a baby boomer I know that movements of the 60s and 70s did bring change.

Last weekend I attended the second memorial service for a person that I was proud to know and be friends with. There were so many local dignitaries in attendance that I commented to an aide from a Congressman’s office that this is as close to royalty as I’ll get.

What made this person so loved and respected? It wasn’t wealth; she was comfortable but cautious with her spending. It wasn’t what we would call fame; she had published a number of cookbooks but that wasn’t why people paid their respects.

She was a person who simply cared about her community, whether it be her street, city or her country. She was an involved person! Some might even call her an activist or community organizer. She wanted the world to be a better place and she did her share.

I look back at the last 40 years or so and realize that America now is much different than it was then. Or is it? We were involved in an unpopular war then and now, well we have been in Iraq and Afghanistan for 8 years which is longer than we were involved in Viet Nam. What we don’t have today is the sense of outrage that was more pronounced in the sixties and seventies. There have been major improvements in Civil Rights and yet it seems that we will always have a group that is discriminated against. Poverty is perhaps less pronounced but affecting more people. Spending on social programs and defense programs were large then and they are enormous now.

There is a distinct lack of public outrage now as compared to then. Perhaps the internet has provided a forum for people to voice displeasure but I haven’t heard the news anchors discussing web traffic too much.

My friend demonstrated commitment to concerns four decades ago though becoming a leader in the community for the causes she believed in. She would volunteer realizing that no job too insignificant for something that was needed; something that should be changed. She supported politicians who were Democrats but admired those who supported the other party for that meant that people cared. She organized fund raisers and open houses where political leaders could come and meet with constituents.

She was from New York City who moved to the suburbs in the 50’s. She became a supporter of Open Spaces in an urban setting. When she said that green was among her favorite colors it signaled the green of grass, not money; blue referred to the skies. She wanted a nice environment for all.

She would work tirelessly for causes she supported and that seems something that today’s people are shying away from. It truly is sad because while I was listening to the accolades being presented I could only think of a voice saying “Don’t ask why but ask why not?” and knew that social progress is seldom achieved when the status quo is revered.

Sunday, October 04, 2009

Bifurcated Designations or Grandfathering at Its Worst

The public is often confused by the alphabet soup of financial designations and in an attempt by the CFP Board of Standards to show differentiation they have instead highlighted what may be major shortcoming.

People like to look at credentials and think that everyone who has them has satisfied the same requirements. All too often that is not the case, and now in the financial field we are seeing the effects of grandfathering at work.

Grandfathering is the term used when the rules of the game change mid-stream and those who have met certain requirements are exempted from the new requirements.

What has brought this to mind is the recent newsletter issued by the CFP Board of Standards, in which they attempt to explain the differences in the CFP® mark and the ChFC® designation. It is in the message from the CEO.Both are used by professionals in the financial planning, investment and insurance world as well as in the legal and academic arenas.

Kevin Keller, CEO of the CFPBOS refers to the fact that the CFPBOS requires the passing of a comprehensive examination as a litmus test to demonstrate professional competency. The test does not have a traditional passing grade requirement. Instead, if I understand it correctly, certain questions within each category must be answered correctly in order to demonstrate mastering the material. Historically 5 out of every 8 candidates who take the test for the first time have passed it.

He then refers to Michael Shaw, who is an attorney and the Managing Director of their Professional Review and Legal Departments and earned his ChFC from the American College and is still listed as a ChFC in good standing despite the fact that he has not provided financial services since 1990. It appeared that Mr. Keller was dismayed that the American College continued to show Mr. Shaw as a member in good standing considering that he no longer is involved in providing financial services. However, Mr. Shaw still refers to his ChFC designation and in fact in a press release issued by the CFP Board they referred to Mr. Shaw as having both the CLU and ChFC designations.

In 1989 the American College, the academic organization that awards a number of financial designations changed the requirements of continuing education for the ChFC designation. People who had enrolled in a program prior to 1989 would not be covered by the new rules which are 30 hours of continuing education each two-year period.

The American College confirmed that Mr. Shaw is grandfathered. Each organization's CE requirements are somewhat similar.

The CFP Board did not always require a comprehensive exam. In fact it was introduced in 1991, and yet all those who were awarded the CFP® designation prior to the exam requirement are not referred to in any different matter. These people did not demonstrate the professional competency that those who took the test did. There are no asterisks next to their name although perhaps there should be since they did not take and pass the exam.

The issue here is not to decide who is right or wrong or to discuss the merits of any designation or organization but rather to point out to the public that on face value you do not really know what requirements a person authorized to use the designations has met. In the first two instances older advisers may have had to achieve less in order to use the same titles. Conversely, the newer planners who may have the least experience are the ones who have met all the current requirements.

I wouldn’t mind arbitrating a meeting between the CFPBOS and American College in order to clarify the underlying issue. My decree would be those that are grandfathered from CE requirements must meet the new standard and those that did not pass the CFP comprehensive exam have one year in which to do so. That way the public will know that the holders of each respective designation have met the same requirements and have the same ongoing obligations.

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