DENVER, April 14, 2022 /PRNewswire/ -- The Financial Planning Association® (FPA®), the leading membership organization for Certified Financial Planner™ professionals, sent a communication to all members today to provide an update on the Association's recent successful lobbying effort in the State of Kentucky.
In response to the Kentucky legislature's consideration of House Bill 8, which eliminates the state income tax and replaces it with a sales tax on services, FPA quickly engaged in influencing the final bill's design. As part of its wide range of taxes on services, the original bill included proposed sales taxes on "personal financial planning" and "personal investment management." To protect the interests of members in Kentucky, FPA and the FPA Political Action Committee (FPA PAC), the only federally registered political action committee representing the interests of financial planners, committed the financial resources needed to secure a lobbyist in Frankfort, KY, to push for the removal of those taxes from the final bill.
The result of the effort was a victory for the Association and FPA members, financial planners, and investment advisers in the State of Kentucky. As FPA CEO Patrick D. Mahoney shared in a member update this morning, "I am pleased to announce that FPA's efforts resulted in removing those proposed taxes from the final bill in Kentucky. While FPA was not the only group lobbying to have the bill amended, we know that our efforts directly influenced the outcome and, most importantly, protected our Kentucky members."
As part of the lobbying effort, FPA engaged members from the FPA of Kentuckiana chapter and authored op-eds providing the rationale for the removal of the proposed taxes, including:
Kentucky has passed laws to require financial education as part of the high school curriculum, which means lawmakers recognize the need to support their citizens in making better financial decisions. The taxation of financial planning services would have been counterproductive.
The demand for financial planning services has never been higher. In recent years, there has been a dramatic increase in the number of Americans seeking guidance from a financial professional, and evidence shows this guidance is working. A recent survey by John Hancock reported that 74% of those working with a financial planner were on track or ahead in saving for retirement, compared to 45% of those not working with a financial planner.
Taxing personal financial planning and personal investment services decreases an individual's rate of return on investments. With the cost of living rising, investors and savers shouldn't have to choose between paying for everyday expenses and the costs of long-term planning.
Taxing personal financial planning services increases the cost of financial planning services, which could be passed on to clients. The Nation is facing a crisis in terms of long-term financial planning, and every effort must be made to make financial planning and saving more attractive – not less.
While FPA's efforts were reactive to what was transpiring in Kentucky, the Association did it with a broader strategic focus to thwart similar actions across the Nation. Given a history of states proposing such taxes, a victory like this lessens the opportunity for states to use precedent as justification.
"FPA will continue to provide our members with a voice and is ready to deploy its resources to protect them and their interests. Over the past few weeks, what we have done in Kentucky will serve as a model for future legislative advocacy efforts for the Association," added Mahoney.
About the Financial Planning Association
The Financial Planning Association® (FPA®) is the leading membership organization for CERTIFIED FINANCIAL PLANNERTM professionals and those engaged in the financial planning process. FPA is the CFP® professional's partner in planning by helping them realize their vision of professional fulfillment through practice support, learning, advocacy, and networking. Learn more about FPA at financialplanningassociation.org and on Twitter at twitter.com/fpassociation.
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SOURCE Financial Planning Association