The Certified Financial Planner Board of Standards Inc. admonished two Florida planners for using a misleading description of their compensation, citing the 2013 incident that led to a court case that the organization won.
In its latest
announcement of disciplinary actions, the CFP Board said that it sent letters of admonishment to Jeffrey M. Camarda and Kimberly K. Camarda, owners of Camarda Wealth Advisory Group in Fleming Island, Fla., for asserting in 2013 on the CFP Board's website that their practice is "fee-only" when it was connected to a larger advisory firm that sold insurance on commission.
In the intervening years, the Camardas sued the CFP Board, which
prevailed last year at the appeals court level. The CFP Board did not publicly discipline the Camardas until now.
In the disciplinary action announced on Thursday, the CFP Board said that an appeals committee of its board of directors "unanimously affirmed" the original disciplinary action against the Camardas.
"While we regret the CFP Board has decided to publicly impose it's mildest rebuke on us, and feel it is entirely unwarranted and unfairly inconsistent with its treatment of others, it does not surprise us," Mr. Camarda said in a statement.
"We lost confidence in the Board long ago, and voluntarily resigned our CFP licenses last year. While we value our CFP training and believe it is an important beginning credential, we have frankly grown far beyond it, and find the downside of association with CFP Board far more onerous than any benefits we might receive."
INSURANCE CONFUSION
The Camarda case was the highest profile of several disputes over the last few years involving the CFP Board's compensation descriptions. Thursday's disciplinary list included actions against four other CFPs for representing their compensation as "fee-only" when they also earned insurance commissions.
One letter of admonishment went to Grant Blindbury, a partner at FMB Wealth Management in Westlake Village, Calif. He said that the incident involved a client who had an existing annuity and wanted to convert it into one with a long-term-care rider.
The client asked the firm to handle the purchase of the new annuity. The firm earned an approximately $8,000 commission, which it then discounted from the client's advisory fees, making the transaction revenue-neutral for the firm.
But the process violated the CFP Board's rule for using the fee-only label.
"It's the letter of the rule, not the spirit of it" that the CFP Board enforces, Mr. Blindbury said. "I accept responsibility for misunderstanding it."
The firm no longer will make insurance purchases for clients.
"I didn't realize how aggressively they come after their own members on stuff like this," Mr. Blindbury said. "Lesson learned."
"FEE-BASED"
Donald G. Heatherly, an adviser at Northern Trust in Wheaton, Ill., David C. Valente, an adviser at Casner & Edwards in Norwell, Mass., and Daniel L. Chamberlin, an adviser at The Chamberlin Group in Helena, Mont., also received letters of admonishment for misusing the fee-only label while earning insurance commissions. None of the planners immediately responded to a request for comment.
As part of its review of its standards of professional conduct, the CFP Board is proposing to expand its compensation definitions to
include "fee-based." Planners who use that terms can collect commissions and must not imply that they are "fee-only." Under current CFP rules, there is a "fees and commissions" category.
The CFP Board grants the CFP designation and enforces its rules for approximately 77,000 CFPs in the United States.
