More On Legal & Compliancefrom The Advisor's Professional Library
- Where Are We Headed? The ultimate compliance goal is to help ensure that everyone associated with an advisory firm acts ethically at all times. Advisors and RIAs should do the right thing, even when regulators are not looking over their shoulders.
- Risk-Based Oversight of Investment Advisors Even if the SEC had a larger budget and more resources, it is doubtful that the Commission would have the resources to regularly examine all RIAs. Therefore, the SEC is likely to continue relying on risk-based oversight to fulfill its mission of protecting investors.
The Certified Financial Planner (CFP) Board of Standards is seeking comments from professionals and stakeholders on proposed amendments to its “experience requirement” for initial CFP certification as well as revisions to its Disciplinary Rules and Procedures.
The Disciplinary Rules outline CFP Board’s procedures for enforcing its Code of Ethics and Professional Responsibility, Rules of Conduct and Financial Planning Practice Standards, which establish standards of ethical conduct for CFP professionals. The Disciplinary Rules also apply to the Fitness Standards for Candidates and Registrants. As of July 31, 63,398 planners held the CFP mark.
Comments regarding the revised experience requirement are due by Sept. 17 and may be sent to WEComments@CFPBoard.org, while comments on revisions to the Board’s Disciplinary Rules are due by Oct. 3 and can be emailed to compliance@CFPBoard.org. Comments received will be posted to CFP Board’s web site and reviewed by a working group and CFP Board staff. Any final proposed amendments to both areas will be presented to the Board of Directors for review and approval in November.
The CFP Board is proposing revisions to its Disciplinary Rules and Procedures as part of a comprehensive review of its enforcement process, which the board says is being conducted by outside counsel experienced in securities regulation and administrative enforcement processes.
The CFP Board’s current experience requirement requires individuals wishing to attain CFP certification to complete three years of full-time work experience related to the personal financial planning process.
Kevin Keller, the CFP Board’s CEO, said in a statement that the proposed revisions “to initial certification will encourage more people who are providing quality financial planning services to the public, or who want to do so, to attain CFP certification.” The proposed changes, he said, “will provide clarification to our rules and procedures, strengthen our investigative and hearing processes and incorporate best practices of established professions that have a disciplinary process.”
The CFP Board said it recently convened a working group to review the experience requirement. According to the Board, the working group–composed of a diverse group of CFP professionals with a broad range of financial planning subject matter expertise, length of experience, business organizational models and academia–considered the CFP Board’s history with this requirement and other professional certification organizations’ experience requirements.
“After substantive discussions,” the group developed several recommendations for revising the experience requirement, the board said.
Revisions under consideration for the experience requirement are as follows: