Advisors under an interim suspension of their official certified financial planner credential would have two years to file a petition for reinstatement under newly proposed rules.
If they don't hit the two-year deadline, their certification would be revoked, says the Certified Financial Planner Board of Standards, which bestows and monitors its official certification on advisors who pass an official examination and meet other requirements. The nonprofit group is giving financial professionals
Rydzewksi said the proposed rule concerning petitions for reinstatement is in part meant to prevent board staff from putting in the time needed to assemble a detailed ethics complaint if the person who's the subject of an interim suspension doesn't intend to seek reinstatement. The Board would impose an interim suspension of a planner's license while its Disciplinary and Ethics Commission works to decide if further sanctions are warranted. Advisors subject to interim suspensions are not allowed to hold themselves out as certified financial planners until their certification has been reinstated.
Rydzewksi said CFP Board staff have better things to do than to pursue people who never intend to try to reclaim their certifications anyway.
"It doesn't make a lot of sense to put forward the kind of detailed complaint that would be presented to the Disciplinary and Ethics Commission," he said.
Another proposed change would prevent the Disciplinary and Ethics Commission from altering a settlement reached in a dispute with a financial planner without first rehearing the arguments in the case. Rather than reject a proposed settlement and replace it with a counteroffer, the commission would require the parties to a dispute to appear before it to restate their cases and try to work toward a new agreement.
Rydzewski said the proposal is meant to ensure that proceedings make use of the adversarial principles underlying the U.S. court system. These principles generally hold that the best way to reach just resolutions of disputes is to allow disputing parties to separately press their case before an impartial judge or arbitrator.
"The parties would come back in for a hearing," Rydzewski said. "And the commission would have the full benefit of that process."
Still another proposed rule would require that the parties in a dispute meet and confer about any written motion they intend to file in a disciplinary proceeding before the motion is filed. The meetings could take place by email, telephone or video conference or in person. Rydzewski said the proposal would formally incorporate into the CFP Board's procedural rules an existing practice.
Yet another rule would set standards for the use of expert witnesses in CFP Board disciplinary hearings. The proposal would give the Disciplinary and Ethics Commission authority to decide if a potential expert's testimony would be useful. Among other things, the commission would have to consider whether the expert could provide "scientific, technical, or other specialized knowledge that is relevant to the issues raised by the Complaint or Petition."
Rydzewski said the proposed changes are the latest in a series of revisions the CFP Board makes every two years or so to its procedural rules. Comments on the proposals will be reviewed by the group's code and standards enforcement committee, which will then make a recommendation to the full board of directors.
If the board eventually adopts the proposed changes, they will be announced with a later effective date meant to give planners time to come into compliance.
"We encourage and welcome candid feedback from CFP professionals and other stakeholders on these proposed changes to CFP Board's procedural rules," said
