ANSI - American National Standards Institute
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Financial Planners React to Enron Collapse

Open Letter to Public Encourages Legislative Measures to Implement Financial Literacy Initiatives; Plans Include Free Program to Connect Consumers with Qualified Financial Planners

New York, Feb 25, 2002

In the wake of Enron's collapse and the attendant investment losses incurred by their employees, six members of the financial planning community, including an ANSI membership organization, have jointly published an open letter to the public to encourage Congressional support of educational initiatives to consumers. In addition, the organizations have joined forces to create a free program that connects a potential investor with a qualified financial planner.

In the letter, Certified Financial Planner Board of Standards Certified Financial Planner Board of Standards (CFP Board), an ANSI member and independent professional organization that regulates financial planners through trademark law by certifying individuals who meet its requirements to use the marks, along with five associations in the financial planning community, are "promoting more employee education about financial planning and the value of diversification when planning for retirement." In addition to CFP Board, members of the new coalition include the Financial Planning Association, the National Endowment for Financial Education, the American College, the National Association of Personal Financial Advisors and the Society of Financial Services Professionals.

These groups cite "great sympathy for the thousands of American workers who have not only lost their jobs because of the failure of Enron, but who have also lost ground in their attempts to secure their own and their families' financial futures. … Each of our organizations would welcome the opportunity to serve as a resource to Enron employees where we can." Many of these ex-employees tied the majority of their retirement investments to company benefit packages and company stock options, which were wiped out when the company went under. The letter closes with a call to action for "legislators, consumer advocates and private/public sector interested parties to come together to ensure that Americans have the appropriate knowledge and access to the appropriate tools to secure their futures in retirement."

Doug Nogami, assistant director of communications for CFP Board, explained the impetus for the letter, "A comprehensive approach to financial planning takes into consideration the long-term goals of the client and that is the investment environment that we hope to promote in the future. If there is anything our organizations can do to help prevent a similar situation occurring to other employees of U.S. companies and corporations, we would like to play a role in that within financial planning."

What many of Enron's ex-employees may not have known is the advantage of diversified retirement investments spread across various products and sectors. The associations point out many employees may not be aware of the implications of having a self-directed retirement account heavily weighted in company stock. In an effort to promote increased awareness of investment opportunities, these organizations have stated their willingness to work with Congress to ensure that employees have access to education programs, consumer and industry research and other vehicles that promote financial literacy.

In addition to serving as a resource for legislative action, this coalition representing thousands of professional financial advisors has initiated a free program whereby Americans in need of sound financial advice are put in touch with qualified financial planners in their local areas; the program's anticipated implementation date is the end of 2002. CFP Board indicated that the qualifications of many of the qualified financial planners selected to participate in the program correspond to the organization's standards in personal financial planning. CFP Board's Certified Financial Planner™ credential is awarded to individuals who meet standards in four areas: education, experience, examination and ethics. Nogami noted, "Certified Financial Planner™ professionals are bound by the CFP Board Code of Ethics. Adherence to a professional code of ethics is very important in retaining clients and reassuring clients that they are receiving quality professional advice."

CFP Board has also been involved in related standards initiatives on the international scene including theInternational Organization for Standardization International Organization for Standardization (ISO) Technical Committee (TC) 222's work on personal financial planning. Several years ago, CFP Board put forth a proposal to ANSI to form a new field of ISO technical activity on Personal Financial Planning, which the Institute then submitted to ISO. Thus far, TC 222 has named four working groups, each of which is led by the national standards body of the U.S., Germany, Canada and New Zealand, to develop international standards in four critical areas, including requisite competencies, ethics and experience. ANSI is responsible for the group undertaking the broad category of terminology, processes and practices. [Editor's note: CFP Board administers both the international committee secretariat and the ANSI-accredited U.S. Technical Advisory Group, which establish and manage the administrative framework for developing financial planning standards on behalf of ISO and ANSI respectively.]

"Financial planning is an excellent example of the value international standardization can add to enhanced consumer protection," explained ANSI president and chief executive officer, Dr. Mark Hurwitz, CAE, "because now more than ever fluctuations in international markets have a direct impact on an individual's financial security. The U.S. financial planning community's efforts to increase public access to sound financial advice and their pledge to assist Congressional measures in this regard reflect a commitment to helping the American public safeguard its financial future. The Institute will continue to monitor the progress of these initiatives as well as the resolution of Enron's difficulties. It is hoped that, through this tragedy, consumers will become smarter investors and will be better protected in the future."

-------------------------------------------------------------------------------- Founded in Denver, Colorado in 1985, CFP Board is an independent professional regulatory organization that owns the CFPTM and CERTIFIED FINANCIAL PLANNERTM and CFP (with flame logo)® certification marks. CFP Board is accredited by the National Commission for Certifying Agencies (NCCA), which was created in 1987 to establish nationally accepted criteria, guidelines and standards for certifying agencies. To receive NCCA accreditation, CFP Board must meet the highest national voluntary standards for private certification set forth by the NCCA.

Established in 1947, ISO is a non-governmental, worldwide federation of national standards bodies to which ANSI is the U.S. national member body. It's mission is to promote the development of standardization and related activities in the world with a view to facilitating the international exchange of goods and services, and to developing cooperation in the spheres of intellectual, scientific, technological and economic activity.

ANSI Focus on Services Standards