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February 05, 2014 at 07:44 AM
In assessing the long-term legacy of major figures in the advisory world, nobody has a better lens than Bob Clark, a former editor of Investment Advisor, a longtime columnist for the magazine and a regular blogger on ThinkAdvisor. I asked Bob to write a blog about Harold Evensky, the subject of the February 2013 Investment Advisor cover story.—Jamie Green
A former stockbroker, Harold Evensky became a financial planner in 1986, and in the intervening 28 years founded one of the profession’s pre-eminent fee-only firms (now called Evensky & Katz), served on the board of the IAFP (now the FPA), was chairman of the CFP Board, and through his books—including “Wealth Management,” published in 1996—and other writings and speeches, coined the name and defined the parameters of what today has become known as “wealth management.” In his spare time, together with his wife and partner, financial planner Deena Katz, Harold has worked to build the financial planning program at Texas Tech University to national prominence.
Many veteran financial planners and observers of the profession also recall Harold as the leading advocate of the CFP Board’s “CFP Lite” program back in 1999. Concerned at the time over competition from brokerage firms, the Board, led by Evensky, announced a new “Associate CFP” designation, designed for brokers who were already doing financial planning for their clients. Compared to the 10-hour exam on 106 topics that full CFPs had to take (though the Board’s new electronic exam differs from the traditional test), Associate CFPs would only have to pass a four-hour exam on 25 topics. What’s more, the education programs for the CFP Lite exam were to be administered in-house at brokerage firms.
Faced with a backlash of opposition from rank-and-file CFPs, including 350 formal complaints, the Board withdrew the proposal for “further consideration,” later that same year.
At the time, the concern of CFP Lite’s many critics—including this writer—was that brokers would use their “watered-down” Associate CFP designations to successfully compete with “real” certified financial planners for clients, who wouldn’t make the fine distinction of the differences.
Yet history is always the final arbiter, and with the benefit of 15 years worth of hindsight, I wonder if Harold—who has never wavered in his defense of the Associate CFP program—wasn’t right after all.
I come to this conclusion after watching the CFP Board spend the past decade and a half wrestling with the conflicts of CFP brokers, culminating in shooting itself in both feet over the definition of “fee-only” last year.
The Board’s current difficulties stem from a seemingly new initiative aimed at boosting its regulatory bona fides by cracking down on CFPs who “misused” the term “fee-only,” based on its somewhat nebulous rules. The result was the forced resignations of the Board’s own chairman and two other board members, along with over-the-top sanctions of Jay and Kim Camarda and other CFPs—meanwhile looking the other way as hundreds of wirehouse brokers listed themselves as “fee-only” on the Board’s client referral site.
