Samantha Power, the former U.S. ambassador to the United Nations, once said, “All advocacy is, at its core, an exercise in empathy.” Empathy has power. It unites like-minded individuals who share a common belief and purpose because it means those engaged in the advocacy process understand each other, the challenges they face, and the opportunities that are collectively embraced to elevate something bigger than themselves.
We see the power of empathy every day at the Financial Planning Association through our members who call FPA their professional home. They are professionals of varying backgrounds and business models, all united by a common commitment to the financial planning profession and a calling to serve their clients without compromise. It is through this empathy and their willingness to engage in the advocacy process that we are having an impact in advocating for an established profession that transforms lives through the power of financial planning.
FPA’s advocacy vision and policy is to champion financial planning that’s delivered under a fiduciary standard of care. We further believe that financial planning ― as an honorable profession — should be recognized in law and by the public based on the certified financial planner marks and practiced by professionals who are required to adhere to the standards that the CFP marks represent. This policy focuses our association’s advocacy priorities, strategies and how we direct our resources.
Through the generous support and action of members, the FPA Political Action Committee has opened doors to federal lawmakers to ensure financial planners are heard as policies are formed. FPA members who travel to Washington and to state capitols across the country for advocacy days are meeting with lawmakers to make the financial planning profession known while advocating for important measures that will elevate the profession and serve the public well.
In 2019 alone, our members’ efforts helped shape policies that protect vulnerable adults from financial exploitation in Arizona and New Hampshire, protect the ability of CFP professionals to use the marks in Louisiana, amplified the importance of a fiduciary standard of care in New Jersey and Massachusetts, and ensured the voices of financial planners were heard when the SEC passed Regulation Best Interest, which we continue to work on to this day.
FPA’s comment letter provides further analysis of the amendments and recommendations for how they can be modified to make them more agreeable to the investment adviser community.
Also at the federal level, the Tax Cuts and Jobs Act created a 20% deduction on “qualified business income” for owners and shareholders of pass-through businesses, such as S corporations, partnerships and sole proprietorships. Unfortunately, financial planners as owners and shareholders of certain types of businesses, “specified service trades or businesses,” are limited in their ability to apply the 20% deduction if their overall taxable income exceeds certain thresholds.
In response, FPA joined a coalition of financial services organizations, including Cetera Financial Group, Commonwealth Financial Network, the Financial Services Institute, the Investment Adviser Association, LPL Financial, the National Association of Personal Financial Advisors and Raymond James, to urge Congress to clarify via legislation that financial service professionals, including financial planners, shall not be considered a “specified service trade or business” so that financial planners would be eligible for the 20% deduction without the income threshold limits.
Advocacy provides financial planners with a seat at the table, which is why we will be focused on working with our members and chapters to influence several state proposals that attempt to use the terms “financial planning” and “financial planner” or that will adversely affect the profession. For example, we are actively monitoring proposed legislation in Washington, where two bills (HR 2211 and S 6052) were approved by the House Consumer Protection Committee and Senate Rules Committee, respectively, and would permit life insurers to provide financial planning services as noninsurance benefits as part of an individual life insurance policy.
The laws and regulations that will govern financial planners into the future are being introduced and voted on every day. If you’re a financial planner and believe in the profession, we need your commitment. If you believe that financial planning has the power to transform lives, we need your commitment. If you believe that financial planning is a true profession, we need your commitment. And if you believe that financial planning must be delivered with a fiduciary standard of care, we need your commitment.
Advocacy, when done well, ensures voices are heard and positions are known by those who bear the power to influence. Join us this year on the Hill and in state capitols ― or as a contributor to the FPA PAC ― as we work to advocate for the profession of financial planning and financial planners, and to ensure empathy is at the heart of all financial planning engagements.
We’re in this together.
Martin C. Seay is the 2020 president of theand is chair of the