In reading InvestmentNews, I came across an article about the proposed language that Senator Herb Kohl (D-Wisconsin) wants to add to the financial reform bill.
Under the proposal, anyone affiliated with an investment adviser who advertised himself or herself as a financial planner and offered at least two planning services would have to become a registered financial planner. Those not designating themselves as planners wouldn’t be in the clear, because the draft also says that registration would be required for planners who claimed exclusions because they advertised professional or educational attainments, an allusion widely believed to apply to insurance agents who identify themselves as chartered life underwriters and list other credentials after their names. –Kohl’s oversight proposal is panned
I believe there are some positives to this proposal.
- Anyone who desires to advertise themselves as a financial planner would have to be a certified financial planner. In doing this, it would ensure that the recommendations that the general public is receiving is coming from the mouth of someone who has received proper training.
- “Financial planners provide advice on a wide range of issues, including homeownership, saving for college and selecting appropriate investment products. Because this advice will have a lasting impact on the financial health of a consumer, it is important the service provider meets certain standards.”
However, there is one big problem that come with this bill.
- Churches and non-profit organizations would be hit hard by this legislation. Many churches (including the one that I attend, DGBC) currently, or have in the past, used Dave Ramsey’s Financial Peace University. In the case of our church, the leaders of FPU are not financial planners (as defined by Certified Financial Planner Board of Standards) and my guess is that that would be the case in most churches and other non-profits that take part in this course. In order for FPU to continue, these leaders would need to become certified financial planners if Senator Kohl’s bill is passed.
As a college student who is currently pursuing my degree in finance and financial planning with the goal of becoming a Certified Financial Planner, I believe that this bill will knock out people that give financial advice that are not properly trained. It is important that those that give financial advice be trained correctly. One wrong move could end your financial life.
I do however see the problems that this bill could have. As I’ve mentioned, Financial Peace University has occurred at the church I attend for the past three years and numerous families have had their financial lives changed from their experience there.
What do you think?
Do you support this bill? Why or why not?