Download the Whitepaper
Defining Financial Planning (PDF | 279KB)
About the Whitepaper
Early in 2009, members of the FPA Major Firms Advisory Team initiated discussions around the need for an industry-wide, clear, specific definition of financial planning that could serve as a minimum standard for consumer expectations and a bright-line distinction between financial planning and other financial services that could be employed by regulators. While both large financial services firms and small financial planning practices generally agree that financial planning is a distinct service that is fundamentally different from insurance consulting, investment management, or trade executions, there is a wide divergence in how financial planning is delivered and defined.
While debates around the best way to deliver financial planning or what model is most appropriate are healthy and valuable within the financial planning profession, an agreement as to what, at a minimum, constitutes a financial planning engagement is essential in the current environment of a growing consumer need for financial planning and enhanced regulatory oversight of the entire industry. To that end, the Major Firms Initiative developed the Defining Financial Planning whitepaper from a series of discussions, online feedback, and taskforce evaluation.
The purpose of this whitepaper is to build upon the foundation established by existing standards (CFP Board and ISO). The intention is to present a clear and specific definition of financial planning activity by (1) giving voice to, and an explanation of the different views on financial planning, and (2) identifying the most commonly held views. With this explanation, the FPA Major Firms Initiative hopes to provide additional insight to regulators to enable them to more effectively regulate financial planning and move the industry closer to consensus on the minimum elements that characterize financial planning so that consumers can better understand and align expectations with what the industry provides.
Note: This whitepaper is not intended to discuss who a financial planner is but rather provide a definition of the act of financial planning.
