Matt Boersen considers his new role as a director at the Washington, D.C.-based Certified Financial Planner Board of Standards Inc. as coming at a pivotal time for the industry. The CFP Board of Standards last fall enacted a “fiduciary standard” that requires financial advisers to act solely in a client’s best interest when providing advice. The 31-year-old Boersen was one of three new directors recently elected to four-year terms on the board of directors for the CFP Board of Standards, which sets professional standards for financial planners and administers the CFP certification. The financial planner and managing partner at Jenison-based Straight Path Wealth Management spoke with MiBiz about the changes and the perspective he brings to the board.
What was the attraction for you to this role on the CFP board?
The financial industry is at an interesting crossroads here over the next few years. There is a lot of debate and a lot made about things like the fiduciary standard, some issues of public trust with some advisers. The industry is at an interesting crossroads on how to deal with some of those issues. At the same time, I think three or four years from now the industry could be sitting in a really, really good place if we handle these things well right now.
What’s the importance of the fiduciary standard for the industry?
The CFP Board issued new guidelines that went into effect in October mandating that CFP professionals now follow a fiduciary standard when they’re dealing with clients, which I think was a huge step forward for the industry as well as for the designation. Making sure that gets implemented, making sure that gets communicated to the public and what that means for the public going forward, I just think it’s a fascinating time. We’ll look back in 10, 15, 20 years from now and look at this next year or two as a real seminal moment in the industry when we made a little bit of a pivot and really became more of a true profession, as opposed to a bunch of individuals doing work for clients.
Why was it necessary to make that pivot?
I just think there’s maybe some conflicting information out there. There’s some lack of public awareness of how the industry is structured, what the legal requirements are for advisers. Most of the time, that’s just fine for clients. I think it works because the vast majority of people inside this industry are phenomenal individuals who are doing phenomenal work for clients. But I think the more that an industry can move toward a common standard — very similar to what CPAs function under, very similar to what attorneys function under — that helps elevate the entire industry, elevates the entire public trust and then helps the people in the industry continue to do really good work for the end clients.
In a nutshell, what’s the CFP saying with the new guideline?
It’s basically saying that anyone who uses the CFP designation needs to act in the best interests of their clients, which means from a recommendation standpoint, from both a financial planning and investment standpoint, as well as disclosing certain conflicts of interest. Certainly inside this industry there can be conflicts of interest. Making sure clients understand those … so clients actually can make a good, educated choice while actually holding the adviser to their recommendations and making sure those are best is at the very crux of it.
In taking on this role, what insight do you bring to the CFP Board?
I’m the youngest member of the board — supposedly I’m the youngest ever on the board — so I do think a big part of it is the fact that I’m 31. One of the other interesting concepts the profession is struggling with right now is that there’s a lack of young advisers coming in to fill what is an increasingly graying industry. There are way more advisers in their 50s and 60s nearing retirement than there are coming in underneath. Some of that’s being fixed with undergrad programs. There are now 105 CFP Board-certified financial planning undergrad programs throughout the country.
Making sure people are making that college decision … and understand what financial planning is, understand what they get to do for people, and the incredible value we get to bring to clients … is certainly a big piece of what I want to bring to the board.
How can you bring the perspective of a younger generation?
Having more recently gone through (college) than the majority of the board, I think I can bring a different perspective, as well as helping just to understand what advisers under the age of 35 are thinking. There’s some business model changes, too. Where historically it’s been a lot of assets under management fees, now there are a lot of advisers who are charging subscription-based and retainer-based fees, and they predominantly tend to be younger advisers. How can the board understand how that (fits) into the overall industry, … support younger advisers and get a more diverse and younger subset coming into the CFP certification of the industry as a whole — that’s the stuff I really want to bring.
What’s the biggest misunderstanding the profession needs to change?
There’s a misperception that the industry primarily, or almost exclusively, serves a bunch of rich old white guys. That’s not the case anymore. This industry and the business models that have been developed allow us to serve a wide range of people. The value and the true life-changing advice you can bring to clients across the board from many different subsets of life is truly rewarding. You get to walk with people … and help them reap the rewards at the other end.
How can changing those perspectives help bring in new people to the profession?
Helping people understand what it really is, that it’s not just sitting behind a screen and picking stocks, it’s not just helping rich people get richer, is a misperception that once cleared up will really help accelerate that younger generation coming into the industry, becoming passionate about it, and bringing new ideas and more diversity into the industry as well.