April 17, 2004

Elizabeth Jetton, President

Financial Planning Association

Suite 400, 4100 E. Mississippi Ave.

Denver, CO 80246

RE: FPA, SEC, DOI and selective hypocrisy; Life and Disability Insurance Analyst

Dear Ms. Jetton,

I have watched with bemused interest the IAFP, CFP Board of Standards, NAPFA, CPA society play selective hypocrisy to fiduciary responsibility, ethics and certainly the law for well over a decade. And you continue the facade with your recent request to write the SEC regarding reduced duty.

Years ago in the mid 90s, the ICFP, in particular, petitioned various state legislators to get attorneys and CPAs under the umbrella of the RIA because they were offering investment advice as part of their regular routine. Yet, at the same time, the majority of officers and directors of these many organizations were engaging in every type of deception, rationale and fraud with illegal activity in the majority of states- certainly in the most populous state in the nation. No matter how you attempt to explain away the illegal and unethical activity, the laws in California (and over 35 more states) are already in place and require adherence. That the requirements of the law (knowledge and testing) are far more demanding than the material for CFPs is no excuse for the outright fraud being perpetrated by CFPs. NAPFA members, officers and directors of the Board of Standards and FPA, CPA PFS and more. In California, one has to take a 52 hour course to get a license and then take 25 hours of continuing education each year for the next four years and 30 hours each two years after that. That is pretty extensive. If you want to provide insurance advice for a fee, you need five years worth of experience, take an extensive to become licensed as a Life and Disability Insurance Analyst (insurance code Section 32.5). That encompasses at least 167 hours of mandatory schooling before one is able to offer fee advice on insurance. This has been the law since 1957. However, literally every comprehensive fee planner in California (check statutes for your state specific laws- Currently, at least 32 states have licensing requirements for advisers who want to provide fee-based insurance advice. They are Arizona, Arkansas, California, Connecticut, Delaware, Florida, Georgia, Idaho, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Oklahoma, Oregon, Puerto Rico, South Dakota, Texas, Utah, Vermont, Virginia, Wisconsin, and Wyoming.) have refused to adhere to this law since they didn't want to have anything to do with insurance or commissions- further that it would taint their background. Or were simply incapable of passing the exam. So they have been offering fee advice on literally all areas of insurance under the guise of whatever rationale they could find. None of it true. Due to your position, you must have been fully aware of this subterfuge by membership. That said, you also have also turned a blind eye to proper enforcement of ethics- certainly the fiduciary duty you now relate to. I point to Board Rule 606; In all professional activities a CFP Board designee shall perform services in accordance with:( a ) Applicable laws, rules and regulations of governmental agencies and other applicable authorities. And Rule 609; A CFP Board designee shall not practice any other profession or offer to provide such services unless the CFP Board designee is qualified to practice in those fields and is licensed as required by state law. Just what part of those rules do you and other officers not understand?

You note in your communique, the "Financial Planning Association represents the interests of the financial planning profession on key legislative and regulatory issues in Washington...... The proposed rule permits the marketing of fee-based financial planning services without holding the broker-dealer to the fiduciary and disclosure standards of the Advisers Act." Yet under the already in place Life and Disability Insurance Analyst license in California, any attempt for a FPA member to offer any comprehensive fee services is a violation of law. A violation of ethics. And a clear violation of fiduciary duty. There is no California FPA member, outside of myself, who can offer comprehensive fee services. That includes your past president- a fact that can be fully and completely documented by Duane Thompson who attended the meeting with the California Department of Insurance in 1997. In addition to the past president being in default of duty, so are representatives of your ethics staff. I am the only CFP to have ever taken and passed the Analyst exam. The point is not that I did it but the fact that effectively all others have repeatedly refused to participate in legal activity because the effort was hard and the knowledge base required far beyond the education of CFPs. Just how do you validate the FPA as an entity for consumer protection where officers are violating the law?

You also note, "In reviewing any regulatory proposal, FPA relies on its governing principles and CFP Code of Ethics and Professional Responsibility in developing a position and whether a proposed regulation is consistent with these core values. In its review of the SEC proposal, FPA identified two concerns: 1) the rule reduces investor protection; and 2) the rule dilutes the standards of conduct for the financial planning profession by permitting the delivery of advisory services at a lower regulatory standard than for financial planners registered under the Advisers Act.

It is notable that the offering of any comprehensive services, the use of a non licensed FPA member reduces consumer protection. The delivery of services by any other FPA than myself permits delivery of (illegal) services that is clearly below California regulatory standards. Any attempt to suggest that compliance with a state law is irrelevant, useless or whatever justification for illegal activity the FPA membership wishes to authenticate is unethical and a fraud within itself. At the simplest level, it is a breach of integrity. To wit, the FPA notes; Integrity- We strive to have ever more congruence between our words and deeds, and to deliver genuine value to those whom we serve. Integrity demands honesty and candor, which must not be subordinated to personal gain and advantage. Within the characteristic of integrity, allowance can be made for innocent error and legitimate difference of opinion; but integrity cannot co-exist with deceit or subordination of one's principles.

The CFP Board of Standards Rule 101 notes A CFP Board designee shall not solicit clients through false or misleading communications or advertisements: (I am the only CFP offering legal comprehensive fee services.)

( a ) Misleading Advertising: A CFP Board designee shall not make a false or misleading communication about the size, scope or areas of competence of the CFP Board designee' practice or of any organization with which the CFP Board designee is associated; (Yet every offering of fee services is a violation of law)

and

( b ) Promotional Activities: In promotional activities, a CFP Board designee shall not make materially false or misleading communications to the public or create unjustified expectations regarding matters relating to financial planning or the professional activities and competence........ (CFP offering of comprehensive fee services is significantly below the competency level of any Analyst in California)

Rule 102

In the course of professional activities, a CFP Board designee shall not engage in conduct

involving dishonesty, fraud, deceit or misrepresentation, or knowingly make a false or mis-leading

statement to a client, employer, employee, professional colleague, governmental or other regulatory body or official, or any other person or entity. (Already identified)

Your Email also noted that the FPA ........supports a level playing field in professional standards. The securities industry has changed significantly since the current BD exemption was approved by Congress more than 60 years ago. The disclosure requirement of the new rule is insufficient in helping investors understand the difference in protections offered under the Advisers Act and NASD suitability rules, and does not provide any disclosure of conflicts of interest. Further, the SEC has never offered any guidance on what investment advice is solely incidental to brokerage services before the rule was proposed, or in the discussion of the rule. Nor has the SEC ever clarified the distinctions between comprehensive financial planning and brokerage services. The problem is exacerbated by the SEC allowing brokerage firms to use the exemption without any assurance on when it will adopt a final rule, and what, if any, changes it will make to the original proposal.

Well, the insurance industry has changed radically. The California DOI has instituted laws, policies and licensing requirements that far exceed the limited knowledge base and capability of CFPs. The offering of comprehensive financial planning absolutely incorporates a review of any existing insurance. The mere intent to do so is a violation of law and a violation of basic fiduciary duty.

You have known (or should have known) of this issue for years. How to you justify the FPA's selective hypocrisy? You cannot go after an organization or group for reduced duty where you stand, and have stood, for even less.

I await your response.

(Needless to say, there was no response.)