More On Legal & Compliancefrom The Advisor's Professional Library
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
The Certified Financial Planner Board (CFP) of Standards opened its Nov. 9 business meeting with a question about the recent resignation of the Board’s Chairman, Alan Goldfarb.
Diahann Lassus, co-founder of Lassus Wherley, a wealth management firm in New Providence, N.J., moderated the webinar discussion with CFP Board CEO Kevin Keller (left), as well as Nancy Kistner, 2012 Chair-elect who was elected to fill the remainder of Goldfarb’s term.
Lassus asked both Kistner and Keller to provide an update on the resignation of Goldfarb as well as the two members of the Board’s Disciplinary and Ethics Commission (DEC).
Reiterating the “deliberative process” the Board took after hearing of allegations of potential violations of the CFP Board’s Standards of Professional Conduct, Kistner said the “special committee” that was set up “found sufficient merit to pursue [the ] three cases.” Said Kistner to the CFPs listening: “It’s important for you to know we take [these allegations] very seriously.”
But Katie McGee, director of marketing for Weaver Wealth Management, where Goldfarb is director of wealth advisory, told AdvisorOne that the CFP Board’s investigation is “over what we believe was a misunderstanding of how [Goldfarb’s] compensation was disclosed on the Financial Planning Association’s website.” Goldfarb’s resignation, McGee said, was “voluntary,” adding that the potential violation “doesn’t involve a client complaint.”
Keller said during the webinar that while “some people have looked at the incident and noted that it’s a sign of weakness, nothing could be more incorrect.” CFP Board, he said, has “standards of professional conduct and we enforce those standards, which sets the CFP designation apart from other designations.” Noting the public sanctions the Board brings against CFPs, Keller cited the “140 designations” that are listed on the Financial Industry Regulatory Authority’s (FINRA) website. “When was the last time you saw people of these other designations sanctioned?” he asked.
Lassus added that she “commended” the Board for its “openness” on the resignations. “It is reassuring that there is a fair process for addressing these allegations.”