FREE NEWSLETTER
Go to main Forum page »
Today I read the following article by the very respected Allan Roth:
https://www.advisorperspectives.com/articles/2026/07/20/how-cfp-board-sold-public-profession
I have always regarded the CFP designation was the gold standard for advisors, and meant I could trust the advisor was looking out for my best interests. It appears this may no longer be the case.
About a year from now I will be looking for a new financial advisor as we analyze our overall financial situation once we both claim Social Security, and are looking at entering a CCRC within the following decade. Our previous advisor shifted us to his son as he was preparing to retire. Our interaction with the son (reviewing our financial status and whether my thinking of performing Roth conversions was the right decision) led both my wife and I decide he was either a poor communicator, or just did not understand non accumulators’ situations.
Do HD readers have any suggestions on other designations that have fiduciary standards that they stand behind?
I wouldn’t count on any three letters behind a name to ensure moral or ethical behavior.
A CFA would be top-notch, but they generally don’t work with individual clients.
Nice article by Allan Roth. Always remember, “No one takes better care of your money than YOU!”
Speaking as a licensed, but non-practicing CFP holder I can offer that one of the key factors to understand when interviewing prospective financial advisors is this – how are they compensated for serving you? And, this can take some digging and adept questioning to fully uncover. If the majority of their compensation is tied to specific product placement with their clients (e.g. mutual funds from certain investment firms in their clients’ asset allocation strategies, annuities from only a few insurance firms, etc.) then it may be beneficial to interview fee-only advisors who are compensated via a straight-forward fee that is charged to one’s account, most likely on a quarterly basis. In my opinion, the best advisors lead with great questions, are fantastic listeners, and pay even greater attention to the psychological and behavioral aspects of the relationships with their clients. While designations like the CFP and others are worthy achievements and help foster continuing education in the field, sometimes the best advisors are great at what they do too, without those fancy letters after their names.
State licensed Registered Professional Engineers. That’s the design designation that acts with diligence, prudence, and in the best interest of the public, exercising skill and caution in all decisions.
Yeah, I know that might not be the financial answer you were looking for.
I was a PE for 43 years. I gave it up three years after I retired when they still wanted fees and continuing education credits. But the only financials I did were my own.
My state allows a Professional Engineer (PE) to move their license to inactive status to eliminate continuing education (CE) requirements but continues to charge the current $280 every two year license.
Each state and controlling board may also have their own rules to reactivate your license by completing a certain level of CE in lieu of having to retake the exam, you are just not allowed to do any paid professional work after your license is changed to inactive status.
The benefit to me for going inactive when I stopped professional work as a CPA is I remain in my professional society and enjoy seeing old colleagues at the local chapter monthly meeting. In the event I should ever want to do paid work again I would just need to complete a specified amount appropriate CE. The dozen or so lunches I get each year at the chapter meetings offsets the small cost the state society charges me for an inactive status membership and helps keep me current on the matters I am still interested in.
I doubt I will ever need to work for pay again and being inactive creates an easy excuse to say no on the infrequent inquiry of could I help out during tax season.
David, I read the same article this morning and it confirmed my suspicions. About 10 years ago I was interested in taking the CFP course for my own benefit through a local college. I attended a welcome visit and one class. I was appalled how the instructors (CFP’s) portrayed themselves and the negative stories they told about clients. Many of the students attending were from a well known brokerage firm because they were being required to get the CFP certification.
A designation that might be considered is a PFS (Personal Finance Specialist) along with a CPA title.
Surely any qualification is merely a measure of the holder’s “book knowledge” and no strong indication of their ability in client service or willingness to go above an beyond in tailoring personal strategies.
I can see that they provide a minimum level of comfort and a baseline level of competence but it could never be a magic cloak to protect you from all or any ills just like a rogue accountant or lawyer or plumber or……
David, I’ve always harbored doubts regarding the CFP fiduciary standards. I suspect many advisors live on or over the edge of rules, having little fear of being caught.
Other professional designations also qualify as being fiduciarias, but do any guarantee that the advisor takes the standards seriously. Further, how is the average person expected to sort the good from the bad?
Thanks for the article, it is eye opening.