Restoring Trust in the Financial Planning Industry

Black eyed ben franklinIn tumultuous economic times, and after numerous financial scandals and stories of outrageous financial prophets, more than a few fortunes were soon parted from their unknowing owners.

The financial services industry has always had a black eye.  A Harris Interactive poll was done a few years ago asking Americans whether they trust the advice they’re given from various professionals.   Financial advisors lagged behind doctors, dentists, nurses, lawyers and accountants.  Only mechanics, real estate agents, insurance agents and stockbrokers were found to give worse advice.

What can be done to repair the considerable damage?  The American College of Financial Services saw this opportunity and jumped in to fill this void.   Enter the term:  “CFP” (Certified Financial Planner).   The Board is in the business of selling internally generated designations,  like “CFP,” to prospective practitioners in the financial services field.  Like most American College Financial Services Logo“colleges,” they are non-profit.  They have done a good PR job in elevating a much needed “universal” standard in financial planning where none really existed.   However, a visit to their website finds a peculiar habit of naming “Centers of Excellence” after big insurance companies like Met Life,  Northwestern Mutual, New York Life,  State Farm Life, and Penn Mutual Life.   My guess is that these companies provided substantial funding to support the “college” and indirectly benefit from the altruistic PR association with an ethical, non-profit educational institute.  Somehow, it is not truly unbiased.

CFP LogoWhen I considered a CFP designation in the mid 90’s, this certificate program seemed like just another fringe academic course in the still flourishing business of financial education for sale.  How can CFP practitioners possibly be taken seriously when they’re able to earn their credentials after only seven to nine months of completing their undergraduate studies?  It’s important to remember that the requirement of a bachelor’s degree was required only for those credentialing after 2007, before which many planners could hit the pavement straight from high school.  Scores of potential planners were not only zipping through the curriculum in three CFP Certificateto six months or choosing self-study, but some were also without a bachelor’s degree when they joined wirehouses and financial institutions, which cannot be trusted to adequately train them.  These institutions would often underwrite the cost of this certificate program.  It was a win-win situation. 

So, with post graduate degrees, and decades of experience, I’ve never considered a CFP after my name to be of great significance.  My clients evidently feel the same way.

What keeps you up at night?  Worrying about all kinds of things, right?  For many people, financial worries are particularly high on the list of worries.  Planning for retirement is hard.  We’re here to make it easier.

Wolf of WallstreetA painful truth is that many financial practitioners are sales people masquerading as planners or advisors in an industry whose ethical practices have a shameful track record. Stockbrokers and insurance agents who earn commissions from buying and selling stocks, insurance and other financial products realize that a CFP credential will help grow the volume of their business or branch them into other related and lucrative products and services.

The way to resolve this issue is for the industry to step boldly in the direction of more meaningful professional education that raises quality standards and infuses investment advice with credibility and confidence.

Legacy Advisors Wealth Management is an independent advisory firm that brings high-quality managed account services, investment advice, and planning tools to retirement plan participants on the South Shore.  Working primarily through plan sponsors and the financial intermediaries who serve them, we provide “industrial-strength” advice and management services designed for the everyday investor.  Our goal is to help people manage their money over the entire investment lifecycle – investing it for retirement, spending it in retirement, and passing it on.

Legacy Logo and NesteggsWe deliver individualized financial advice to participants in 401(k) and other retirement plans through a simple, easy-to-understand process.  The advice is based on trusted industry standards of asset allocation, which are built into the software analytics and delivered through sophisticated automation.  From savvy investors seeking reliable projections and independent validation, to reluctant savers looking for start-to-finish help reaching their destination, Legacy Advisors provides as little or as much assistance as each individual prefers.


Although we strive to assist all who come to us for counsel, our services may not be compatible with everyone’s unique needs.  If you’re interested in a personalized Retirement Income Analysis, please CLICK HERE to answer a brief online Assessment Questionnaire or call us at (781) 421- 3204 for more information.


Speak Your Mind