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CFP Board to Split Into 2 Nonprofit Groups

By Janet Levaux

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The Certified Financial Planner Board of Standards says it is setting up a separate nonprofit organization to promote careers in financial planning and the public image of financial planners.

The new 501(c)(6) organization will be called CFP Board of Standards, while the existing 501(c)(3) organization will be renamed the CFP Board Center for Financial Planning — which is a program the group set up in 2015.

The new CFP Board of Standards will work to “credential competent and ethical financial planners, uphold CFP certification as the recognized standard and advance the financial planning profession,” according to an announcement posted online Wednesday, written by CFP Board Chair Daniel Moisand and CEO Kevin Keller.

The CFP Board Center for Financial Planning will continue to “advance competent and ethical financial planning and expand CFP professional diversity for the benefit of the public,” the two leaders explained. 

According to tax rules, the focus of 501(c)(3) organizations must be on public service, while 501(c)(6) organizations — also referred to as nonprofit membership organizations — are formed to serve their members.

Both nonprofit groups will operate under the umbrella of the CFP Board and each will have the same CEO and board of directors.

The reorganization will not affect “the CFP certification requirements or our work to set and enforce the CFP certification standards,” Moisand and Keller stated. 

As to why the new nonprofit is needed, the organization explained in an FAQ: “CFP Board will be in a better position to promote the benefits of a financial planning career and to take other actions that benefit the financial planning profession without the limitations of 501(c)(3) tax registration.”

In addition, the groups says it will develop workforce programs, “including a groundbreaking new program to increase awareness of financial planning careers among college-bound students. We will be able to communicate more directly about the value the public receives from hiring a CFP professional.”

The CFP Board says it plans to spend $15 million a year on its ad campaign starting this year and will spend $3.5 million a year in workforce development over the next few years. The funds will be used to help the group achieve its goal of raising the number of U.S. CFPs to 150,000 by 2030, up from about 95,000 as of Dec. 31, 2022.

On Feb. 7, CFP Board leaders will host a webcast to discuss this news and other developments.

Recently, the organization said that the number of female certified financial planners increased to an all-time high of 22,446 in 2022 — a 4.4% gain from 21,504 in 2021 — accounting for 23.6% of all CFPs, inching up from 23.4%. In 2022, 1,519 women became CFPs, up from 1,374 in 2021, the board said, noting almost 30% of new CFPs in 2022 were women.

Meanwhile, the number of Hispanic CFP professionals grew by 10.3% to 2,710 from 2,499 in 2021, accounting for 2.9% of all CFPs (up from 2.7% in 2021). Also, the number of Black CFPs grew by 8.8% to 1,766 in 2022 from 1,652 in 2021, accounting for 1.9% of all CFPs, up from 1.8%.

(Shown in photo: Kevin Keller)

Janet Levaux

@Think_JanetL

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