Independent Task Force Criticizes CFP Board's Enforcement Program

Posted on December 24th, 2019 at 3:30 PM
Independent Task Force Criticizes CFP Board's Enforcement Program

From the Desk of Jim Eccleston at Eccleston Law LLC:

A recent report by the task force on the Certified Financial Planner Board of Standards’ ("CFP Board") enforcement program recommends internal reforms that will address "systematic, longstanding, governance-level weaknesses."

According to a recent InvestmentNews article, the task force’s report states that the organization must be strict with advisers who abuse the self-reporting system. "The CFP Board should take the default position, in the absence of extenuating circumstances, that all self-reporting failures shall be subject to at least suspension if not revocation and take steps to communicate this position to the CFP certification community," according to the report.

The task force recommended several steps to bolster the CFP Board's governance, including hiring experts to evaluate the CFP Board's governing structure and creating written policies that define specific enforcement outcomes.

In response, the CFP Board says it no longer relies primarily on the self-disclosure of CFP professionals, and it has implemented annual background checks on all CFP professionals. Susan John, Chair of CFP Board of Directors, said: "This process was an essential step that will help the board strengthen CFP Board's enforcement program."

The task force was established in response to omitting negative information about CFPs on the Board's website that aimed to help investors find and hire a CFP. The negative information included regulatory and criminal problems and customer complaints about individual CFPs. In the past, the CFP Board has relied primarily on certificants to report their disciplinary issues with the Securities and Exchange Commission or the Financial Industry Regulatory Authority.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today. 

Related Attorneys: James J. Eccleston

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