CFP Board gets tougher on failure to report misconduct

CFP Board gets tougher on failure to report misconduct
The board also released a proposal to establish an appeals commission to hear appeals of rulings by the Disciplinary and Ethics Commission.
NOV 11, 2021

The Certified Financial Planner Board of Standards Inc. announced Thursday it has approved a tougher punishment for credential holders who don't report their own ethical missteps.

The update to the organization’s sanctions guidelines recommends a public censure for certificants who fail to tell the Board within 30 days about information that may reveal misconduct or who file an incomplete ethics declaration.

The previous punishment was a private censure. A public censure entails highlighting the CFP in a press release and posting the violations on the CFP website.

On Thursday, the CFP Board also announced a proposal to create a new appeals commission to adjudicate appeal hearings. The commission would make the final decision regarding a CFP mark holder’s appeal of an order of the Disciplinary and Ethics Commission or an administrative order. The proposal is open for public comments until Dec. 14.

The CFP Board released its proposal for beefing up its sanctions guidelines in July. A public comment period concluded in September. The rule on inaccurate ethics declarations will take effect on Jan. 1. The public censure for failure to report misconduct will take effect on Jan. 1, 2024.

“These changes are the latest developments in CFP Board’s work to strengthen enforcement of the Code of Ethics and Standards of Conduct for CFP® professionals,” CFP Board chief executive Kevin Keller said in a statement. “Timely and accurate self-reporting to CFP Board helps us maintain effective enforcement processes that are fair to CFP® professionals whose conduct is being evaluated and credible to the public.”

The work on revising the sanctions guidelines comes in the wake of criticism over the last couple years of the CFP Board’s ability to enforce the ethical standards attached to the mark.

In late 2019, a task force issued recommendations for improving CFP enforcement. The task force was formed in response to a Wall Street Journal article that took the board to task over omitting negative information about CFPs on the board’s website, including regulatory and criminal problems and customer complaints.

Over the last year, the CFP Board has reformed enforcement procedures and governance practices to align with strengthened conduct standards that went into force in June 2020. They center on holding CFPs, including brokers, to a fiduciary standard whenever they provide investment advice.

Steps to encourage next-gen talent

Latest News

LPL building out alts, banking services to chase wirehouse advisors, new CEO says
LPL building out alts, banking services to chase wirehouse advisors, new CEO says

New chief executive Rich Steinmeier replaced Dan Arnold on October 1.

Franklin Templeton CEO vows to "do what's right" amid record outflows
Franklin Templeton CEO vows to "do what's right" amid record outflows

The global firm is navigating a crisis of confidence as an SEC and DOJ probe into its Western Asset Management business sparked a historic $37B exodus.

For asset managers, easy experience is key to winning advisors' businesses
For asset managers, easy experience is key to winning advisors' businesses

Beyond returns, asset managers have to elevate their relationship with digital applications and a multichannel strategy, says JD Power.

Why retaining HNW clients ultimately comes down to one basic thing
Why retaining HNW clients ultimately comes down to one basic thing

New survey finds varied levels of loyalty to advisors by generation.

Stocks drop as investors digest Microsoft, Meta earnings
Stocks drop as investors digest Microsoft, Meta earnings

Busy day for results, key data give markets concerns.

SPONSORED Out with the old and in with the new: a 50% private markets portfolio

A great man died recently, but this did not make headlines. In fact, it barely even made the news. Maybe it’s because many have already mourned the departure of his greatest legacy: the 60/40 portfolio.

SPONSORED Destiny Wealth Partners: RIA Team of the Year shares keys to success

Discover the award-winning strategies behind Destiny Wealth Partners' client-centric approach.