CFP Board Proposes New Rules for Handling Expunged Criminal Records
From the desk of Jim Eccleston at Eccleston Law
The CFP Board has announced that it is considering a proposal to change how it treats applicants with expunged criminal convictions, according to Wealth Management. The proposed revisions would update the Board's Fitness Standards, Procedural Rules and Sanction Guidelines, and they follow the recent creation of the Board's Criminal Expungement Commission.
Currently, the Board's Standards say nothing about how its Disciplinary and Ethics Commission (DEC) should factor in an expungement, so the DEC has been left to use its own judgment on a case-by-case basis, according to CFP Board Counsel. The proposed changes would fix that gap by explicitly stating that the Commission may, but is not required to, treat an expungement as a "mitigating" factor when it reviews an application for CFP certification.
CFP Board Counsel points out that expungement laws differ significantly from one state to the next. Under the proposed framework, the DEC would give more weight to an expungement when the court that granted it made specific findings about the applicant's rehabilitation, good moral character, or low risk of reoffending.
Wealth Management reports that the change with the greatest impact would involve applicants currently subject to a permanent ban from certification, a category that includes felony convictions for fraud, theft, embezzlement, perjury and identity theft, among other offenses. Under the current rules, even a fully expunged conviction in one of these categories never reaches the DEC
The application simply cannot move forward. The proposed changes would give the DEC the flexibility to actually examine the facts and circumstances of an expunged case, which means some applicants with expunged records could have a real path to certification for the first time.
The proposal would preserve the Board's public-notice requirements. The Disciplinary and Ethics Commission would continue to apply its existing standards to determine whether a felony conviction gets added to the CFP Board's public record and included in the press releases the Board regularly issues about sanctions against new or existing certificants.
According to Wealth Management, the CFP Board is accepting public comments on the proposed changes through August 21, 2026.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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