CFP Board is the professional body for financial planners that issues the Certified Financial PlannerTM and CFP® certification marks. The mission of CFP Board is to benefit the public by establishing and enforcing education, examination, experience, and ethics requirements for CFP® professionals. All CFP® professionals agree to abide by CFP Board’s high standards for competency and ethics.
NAELA members have the opportunity to contribute to CFP Board’s public mission. NAELA members are on the front lines when working with older adults and people with special needs, which means that they are uniquely situated to ensure that their needs are met and that they are not victims of fraud. In the course of their work, NAELA members may learn of a CFP® professional who has engaged in misconduct. In that circumstance, the NAELA member may notify CFP Board so that our professional standards department may take action to protect the public.
CFP Board’s Ethical Standards
CFP Board’s revised Code of Ethics and Standards of Conduct (Code and Standards), which take effect on October 1, 2019, requires all CFP® professionals to act as a fiduciary, and therefore, act in the best interests of the client, at all times when providing financial advice. To act as a fiduciary under the Code and Standards, a CFP® professional must fulfill the following duties:
• Duty of Loyalty – 1) Place the interests of the client above the interests of the CFP® professional and the CFP® professional’s firm; and 2) Avoid conflicts of interest, or fully disclose material conflicts of interest to the client, obtain the client’s informed consent, and properly manage the conflict.
• Duty of Care – A CFP® professional must act with care, skill, prudence, and diligence that a prudent professional would exercise considering the client’s goals, risk tolerance, objectives, and financial and personal circumstances.
• Duty to Follow Client Instructions – A CFP® professional must comply with the terms of the client engagement and follow all directions of the client that are reasonable and lawful.
The Code and Standards contains other important requirements that apply to all CFP® professionals, including the duty to provide clients with several categories of information that are important to the client relationship, such as a description of the products and services offered; how the client pays for the products and services; and how a CFP® professional is compensated for providing the products and services.
CFP Board’s Enforcement Program
CFP Board’s enforcement of its standards distinguishes the CFP® certification from other financial credentials. CFP Board is committed to maintaining an investigative disciplinary process that is fair to the CFP® professionals and credible to the public.
Overview of the Program
CFP Board has a peer-review enforcement process. CFP Board staff investigates alleged violations of its standards and, where appropriate, presents a complaint containing the alleged violations to the CFP Board’s Disciplinary and Ethics Commission (Commission), which is composed of CFP® professionals and members of the public (public members typically are attorneys or individuals with experience advocating on behalf of the public).
Where the Commission finds a violation, it may impose a private censure, a public censure, a public suspension of the right to use the CFP® marks, or a public permanent revocation of the right to use the CFP® marks. The CFP Board levies public discipline where necessary to protect the public by disclosing instances where a CFP® professional has fallen short of his or her ethical obligations or committed violations of the Code and Standards. CFP Board announces public discipline on its website and in a press release.
The Investigative Process
CFP Board has three primary sources for information that may generate an investigation: 1) a CFP® professional discloses potential misconduct; 2) CFP Board discovers regulatory actions taken against a CFP® professional by a financial regulator; and 3) a member of the public complains directly to CFP Board.
CFP Board’s investigations are governed its Procedural Rules, which provide CFP® professionals with the typical hallmarks of due process – notice of the alleged violations, the opportunity to respond to the allegations, the opportunity to be represented by counsel, the opportunity to call witnesses and introduce documents, the opportunity for a hearing and the opportunity to appeal. If CFP Board finds probable cause to believe that a CFP® professional violated CFP Board’s ethical standards, CFP Board will file a written complaint against the CFP® professional containing the specific allegations of misconduct.
The Hearing Process
After CFP Board files a complaint, a CFP® professional has the right to a hearing before a three-member hearing panel of the Commission, which is charged with the duty of reviewing and taking appropriate action with respect to alleged violations of the CFP Board’s ethical standards.
During the hearing, the CFP® professional has the right to be represented by counsel, present witnesses and introduce documents, and testify on his or her behalf. Where appropriate, CFP Board will also facilitate the testimony of the client or consumer who was potentially harmed by the CFP® professional. The hearings are informal proceedings and do not conform to the rules evidence and procedure commonly used in courts.
Once the hearing panel conducts a hearing, it will submit its recommendations to the full Commission which, after considering the recommendation of the hearing panel, will render a final decision. If a CFP® professional disagrees with the decision of the Commission, a CFP® professional has the right to petition the decision to the Appeals Committee of CFP Board’s Board of Directors.
How Can NAELA Members Work with CFP Board?
NAELA members may work with CFP Board in two ways.
• First, CFP Board supports NAELA’s mission and understands the importance of elder law and special needs planning for clients of NAELA members. Given the intersection of the work of CFP® professionals and NAELA members, NAELA members are uniquely positioned to identify potential misconduct by CFP® professionals and to facilitate a consumer filing a complaint directly with CFP Board. CFP Board encourages NAELA members to file complaints directly with CFP Board if they represent a client that appears to have been the victim of misconduct by a CFP® professional.
• Second, NAELA members are uniquely qualified to serve as a volunteer with the Commission due to their legal background and familiarity with estate planning and financial products. Volunteering with the Commission initially involves serving on several hearing panels reviewing allegations of misconduct. Most professionals who volunteer with the Commission find the experience to be personally and professionally rewarding. NAELA Past President Craig Reaves, CELA, CAP, NAELA Fellow, who served as a member of the Commission and continues to volunteer with CFP Board, had this to say about his experience:
I thoroughly enjoyed my four years serving as a member of CFP Board’s Disciplinary and Ethics Commission. It is a fascinating, satisfying, and educational experience that I have not found anywhere else. I was surprised how often conduct encountered in CFP Board disciplinary matters were similar to issues I would see in my law practice and having served on the Commission gave me a better understanding of how to counsel my clients. I strongly encourage any NAELA member who has an interest to volunteer to serve on the Commission. I know you will find it rewarding, and the perspective you bring as an elder law attorney will be very helpful to the Commission.