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NAPFA's CFP Requirement Causes Stir

The National Association of Personal Financial Advisors’ (NAPFA) announcement that it would require the CFP designation to be a NA PFA-registered planner set off some arguments about designations.

NAPFA said it wanted to cut through the clutter of designations to boost consumer confidence, but it caused some critics to express a lack of confidence in the CFP designation, administered by Certified Financial Planner Board of Standards. The most significant critic has been The American College, which also issues designations, calling the NAPHA move a monopoly of designations.

Others have criticized that the CFP administrators have not moved strongly enough to adopt a fiduciary standard of conduct in all investment advising, which would be allowed by Dodd-Frank legislation but has not been defined by the Securities and Exchange Commission. CFP administrators have said they require all advisors to act in the interest of their clients and for advisors to follow the fiduciary standard in financial planning.

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