Now when the Certified Planner Board of Standards issues a public sanction against one of its members, the announcement will come with more details about the underlying allegations.
The CFP Board, the granter of a credential generally considered the gold standard for financial advisors, announced Thursday that its releases on ethical sanctions will include related orders from its disciplinary and ethics commission. The change, which will take effect Friday, is meant to provide others in the industry with more insight into the commission's reasons behind its disciplinary decisions.
"Publishing these orders enhances transparency and builds trust," CFP Board Chair Dan Moisand said in a statement. "This move aligns with our commitment to elevate the financial planning profession, promoting professional accountability similar to other standards bodies such as medical boards, accountancy boards and attorney disciplinary bodies."
The CFP Board's current releases on temporary suspensions and other disciplinary measures typically contain a sketch of the underlying circumstances and facts in a given case. In planning to go into greater detail in the future, the organization said it would still withhold two pieces of information: the names of firms and people involved in a case other than the main subject.
The first omission is hardly a barrier, though. Advisors' firm affiliations are easily discoverable using either the Financial Industry Regulatory Authority's BrokerCheck service or a similar database maintained by the Securities and Exchange Commission.
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The CFB Board itself also maintains a searchable database on its record showing customer complaints and other disciplinary marks. The board ceased relying on CFPs themselves to disclose their own histories of regulatory troubles, bankruptcies or criminal complaints after the Wall Street Journal wrote an article taking it to task for loose oversight of certificate holders. The CFP Board now checks for that information independently.
The CFP Board is currently conducting a review of its professional conduct standards and guidelines. Among other things, the group is proposing to extend its list of felony convictions that would prevent someone from being able to become a certified financial planner. Anyone convicted of perjury, obstructing justice, tampering with a witness or stealing someone's identity, for instance, would be subject to a permanent ban.
The proposal also lays out specific sanctions for 52 types of misconduct — such as breach of fiduciary duty, forgery and lack of diligence. The CFP Board is using an online survey to collect comments on the proposed changes. The deadline for responding is Dec. 3.
