January 16, 2005
Any broker that is involved in the brokerage industry should not be allowed to hold themself out as a Financial Advisor or Financial Consultant unless there is a form of certification. Several brokerage firms have done an inhouse certification which no way compares to the stringent requirements of the CFP desigination. If someone has the training to give advice in all of the areas of financial planning then they should be able to hold themselves out as Financial Consultants or Advisors, charge a fee for the advice above that being charged for the investment advice and be covered by the Advisors Act. Otherwise, they should only be able to represent themselves as Investment Advisors.
This would address some of the confusion the average consumer has.
I believe the SECs observation that brokers will trend to a fee based practice to ensure an even income is correct. I do see the problem as one with a simple solution.
If you hold yourself out as other than an Investment Advisor and charge a fee in addition to any fee involved with managing investments then a certification should be required. Currently there is a program available to obtain the Certified Financial Planner designation. Obtaining that certification could be a requirement or the SEC could re-invent the wheel and design an optional program. Anyone not qualified could only hold themselves out as a Investment Advisor.