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Board Action Weakens Planning Organization Prominent advisor quits the Financial Planning Association

For Immediate Release
December 20, 2002

Media Contact: Will Casserly
wcasserly@ricedelman.com
(703) 251-0110

A recent board action will damage the Financial Planning Association, says well-known financial advisor and long-time FPA member Ric Edelman, CFS, RFC, CMFC, CRC. As a result of the board's action, Edelman is terminating his membership in the organization.

The FPA board recently voted to allow in its "financial planner" membership division only those advisors who hold the Certified Financial Planner designation; other financial advisors of the FPA who do not hold that particular designation ? about 7,100 advisors, or almost one-third of FPA's advisor membership, including Edelman ? will be relegated to a nondescript "member" status. The FPA board made the decision; the issue was not voted on by the general membership.

"The board's action will weaken the planning profession," Edelman said, "by dividing CFPs and non-CFPs." He noted that the planning community was divided on this issue in years past, and reconciled through a merger of the IAFP and the ICFP. "The board's action is returning us to the foregone days of divisiveness," Edelman said. "I thought those days were behind us, but I guess they're not." He noted that the FPA is increasingly becoming a CFP-only organization, just as the ICFP was before it. "You might as well call it the CFPA from now on," Edelman said, adding, "This is no way to bring unity to the profession, and it will further harm FPA's efforts to serve as an effective voice in Washington, D.C."

Edelman noted that the board's action says that the FPA does not consider him to be a financial planner, despite the fact that, 16 years ago, he founded what is now one of the largest financial planning firms in the area, with nearly 6,000 clients and $1.7 billion in assets under management. Edelman holds four professional designations, an honorary doctorate, and two patents for financial innovation. He has written five financial planning books that have sold more than one million copies. He also publishes print and Internet newsletters with more than 55,000 subscribers. His financial planning firm employs 14 CFPs, two of whom are also CPAs and all of whom have been trained, at least in part, by Edelman.

"The FPA Board is solely concerned with designations," Edelman said, and does not care whether planners contribute to the planning community. Edelman, who has donated $25,000 to the Financial Planning Foundation, serves on the foundation's Grants Committee. Edelman also speaks frequently to financial planner groups on practice management, and has produced a video called, "How to Become a Successful Financial Advisor." Ironically, he noted, his courses are approved by the CFP Board of Standards as qualifying for Continuing Professional Education credits. "It's astonishing that I am qualified to teach financial planners, but yet am not considered by the FPA board as being one of them," he said.

Edelman is involved with the American Savings Education Council, the Jump$tart Coalition for Personal Finance Literacy, the National Endowment for Financial Education, and he serves on the Washington, DC, area board of Junior Achievement. He taught personal finance for nine years at Georgetown University, and recently formed the Edelman Center for Personal Finance Education, a 501(c)(3) organization. Edelman was twice selected by the White House to serve as a delegate to the National Summit on Retirement Saving (1998 and 2002), has testified before Congress and is active in federal and state policy-making in the financial arena.

Financial Planning magazine once called Edelman "one of the most successful advisors in the nation" and both The Washington Post and the CBS Evening News have called Edelman a "financial planning guru." Edelman's firm has won more than 50 professional, business and community service awards over the years.

Yet, Edelman said, his long and prominent career as a financial advisor does not matter to the FPA board. "Under its new edict, the board has stated that nothing matters other than attaining a designation that is available to anyone through a self-study mail-order program," Edelman said. He noted that many who hold the CFP designation are not financial planners, don't work in the planning field, and don't even hold a college degree. "How the board can conclude that membership is to be determined by this single criterion [holding the CFP designation], without regard to one's career that is filled with experience, service and contribution, completely befuddles me," he said. "It is blatant discrimination."

Under the FPA board's edict, the FPA will continue to call Edelman and planners like him a "financial planner" until 2010. Still, Edelman is leaving the organization now.

"I see no reason to remain in an organization that has clearly said that I am second class. Never before have I seen a membership organization show such little regard for its members, or for its mission," he said. "Instead of making consumers its primary focus, the FPA has chosen to highlight a small debate on designations, and to take a position that is in direct conflict not only with a large portion of its members, but with the even larger advisory community who are not members ? and who now, never will be members." Some estimate the advisory community to consist of 80,000 to 100,000 individuals.

"The ideal planner association," Edelman said, "is one that does not discriminate based on designations or compensation methodology, but rather is devoted to developing and acknowledging competence among its members and in supporting the best interests of American consumers. The FPA board has clearly stated that the FPA is not that organization."

Edelman questioned why any non-CFP advisor would want to remain in the FPA, and he welcomes comments from other advisors at quitfpa@ricedelman.com