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Byline: Deborah Adamson Staff Writer

Financial consultant. Investment adviser. Financial planner. Investment representative.

They're called many things, but essentially what all of them do is charge for financial advice. And, as many people have found out, the quality of advice isn't uniform - some are great, some atrocious and others fall in between.

Throw into the fray the fact that accountants, attorneys, real estate agents, insurance and stock brokers might also offer investment advice on the side and consumers are left asking, ``Will the real financial planner please stand up?''

Indeed, it's getting quite muddled out there.

``The term `financial planner' is very poorly regulated,'' said Noel Maye, a spokesman at the Certified Financial Planner Board of Standards in Denver. ``We think many people are misleading the public by using this term.''

That's why the board is coming out with a new set of accreditation standards in September to ensure that more financial planners are qualified to give advice.

Indeed, the board believes that not all investment advisers are created equal, with apologies to the Declaration of Independence.

They might call themselves such, but how good is their advice if they're not registered, licensed or don't carry any professional designations? Even if they're licensed, what kind of training have they received?

``A financial planner is not a professional classification,'' said Bill McDonald, chief enforcement director at the California Department of Corporations. ``Anyone can call themselves a financial planner.''

First, let's get one thing clear: A stockbroker is not a financial planner. A broker's main business is to buy and sell securities even if he or she offers advice on the side as well. Technically, a financial planner charges to give investment advice. But the differences often get blurry.

The board is so concerned that the public might be getting advice from unqualified folks that it's expanding its accreditation efforts.

The nonprofit regulatory group already awards the certified financial planner designation - the CFP mark one can find attached to names of professionals. To get the CFP assignation, advisers have to pass rigorous exams and take courses every two years to update their investment knowledge.

But the board wants to accredit more folks to make sure their advice is backed by adequate investment education.

It wants to ensure that financial planners across the spectrum - be they financial advisers at American Express, financial consultants at Prudential Securities, investment representatives at Bank of America or financial planners at small and midsize firms - are being trained properly.

This fall, the board will start certifying three things: The quality of a company's investment advice, its investment training program or its financial planning services. In addition, it will begin accrediting people for the new associate CFP designation. The mark is for entry-level financial planners who don't meet the three-year work experience requirement to take the CFP exam.

This is not to say that the current training being received isn't adequate. Maye makes the point that there should be at least some minimum requirements set as to what investment knowledge each financial planner should possess.

With no standards, it's a financial free-for-all that will get investors hurt.

Think of it this way: Just as the FDA's seal of approval on food means the product meets minimum safety standards, the CFP board hopes its accreditation mark is a sign that a financial adviser has met its requirements.

The first program, accreditation for the entire company, is more appropriate for small companies and solo practitioners, Maye said.

To qualify, the main business must be financial planning, all financial planning services must be supervised by a CFP, at least half of the firm must be owned by a CFP and folks giving advice should be a CFP or an associate CFP.

The second accreditation effort targets training programs. This affects large companies with many financial advisers, as well as colleges and universities.

To pass the board's muster, a company's internal training program must require 45 hours of studying that covers 25 financial planning topics. The board will scrutinize its training staff, courses and facilities for quality control. Every three years, the companies have to re-register for certification.

Courses at a university or college have to cover 106 investment topics and they must provide adequate education for seekers of CFP and associate CFP marks.

The third program accredits an entire financial services division. Here, not only must a company's training program meet board standards but it has to undergo compliance audits.

But the associate CFP mark is a matter of controversy among the members.

Mark Pash, a CFP and president of Pash & Benson International in Encino, said that while the idea to accredit companies is an excellent one, the associate CFP mark is stirring the pot because some planners believe it would deflate the value of the tough-to-get CFP designation.

However, he doesn't mind it because it would raise the standards of other practitioners and benefit the public.

``I'm kind of in favor,'' Pash said.

So what do the changes mean for investors?

It's additional protection against unqualified financial planners. With the board's seal of approval, investors can rest assured that a company or individual has met certain minimum standards.

However, investors still need due diligence in finding out whether an investment adviser has had a successful track record. The board's certification doesn't guard against bad advice.

To check on a particular CFP, call toll-free at (888) CFP-MARK or go to to see whether the individual has violated any rules or ethics.



Photo: (color) Mark Pash, a certified financial planner in Encino, supports tighter regulations - for the most part.

Hans Gutknecht/Staff Photographer
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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Date:Jul 19, 1999

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