A March 8, 2010 article in Investment News states that the Certified Financial Planners Board of Standards Inc. ("CFP Board") disciplinary and ethics boards have been operating at heightened levels of activity due to problematic behavior by CFP certificants arising, in part, from the market problems of 2008 and 2009.
Kevin Keller, the CFP Chief Executive was quoted as stating “There's been an unfortunate increase in the number of interim suspensions over the past year,” he said, “and our caseload is going up as well.”
While temporary revocations of the right to use the CFP mark are increasing, the number of full-time dismissals of certificants and notifications to regulatory authorities has dropped in recent disciplinary hearings. “That shows we work hard to ensure that our process is fair”.
The CFP board's enforcement unit plans to begin issuing private-letter rulings to give certificants more clarity about how their practices intersect with the group's ethical standards. The organization has been increasing its outreach to insurance companies, mutual fund companies and other financial services firms, whose push of proprietary products and services sometimes comes in conflict with the obligations of employees or affiliated contractors who hold the CFP designation.
The efforts are aimed at balancing the group's campaign to promote its certification as the highest standard for financial planners, with its goal of popularizing the certificate, which is now held by about 61,000 individuals. A competing professional designation, the Chartered Financial Consultant ("ChFC") offered through the American College, has over 97,000 designees "at last count" according to the American College.
Keller is also quoted to emphasize that “It's always unfortunate when financial planners make decisions that merit discipline, but it's important for the public to see that our disciplinary proceedings have teeth...The CFP Board is the only one of more than 100 financial planning standard groups that enforces its code of ethics.”
This author, John Darer, has often called into question the enforceability of the code of ethics of the National Structured Settlement Trade Association and the Society of Settlement Planners in the past. Some of his more aggressive efforts address issues such as credential puffery, the structured settlement transparency initiative, paid for testimonials and exposing the ethical duplicity of marketing plaintiff exclusivity contemporaneous with a signed declaration to the United States Department of Justice, under penalty of perjury, that renders the first statement impossible (under the mutually exclusive theory of logic).
With regime change at NSSTA coming July 1, 2010 this author hopes that incoming Executive Director Eric Vaughn and the new NSSTA Board take inspiration from what the CFP Board is doing.
I also toss an olive branch out to the factoring industry. NASP, please show us that your code of ethics has teeth!
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