Last month in this space, we ran the letter of resignation submitted to the CFP Board by the certificant members of the Board’s Disciplinary and Ethics Commission. Washington Bureau Chief Melanie Waddell asked Board CEO Kevin Keller about the resignation in her IA interview. Here’s Keller’s explanation of what was behind the resignation:
“The Disciplinary and Ethics Commission asked at its November meeting for clarity around to whom they were accountable. CFP Board’s governing documents were unclear about whether or not the commission was accountable to the board of directors or to staff. Obviously the board of directors has ultimate responsibility for the organization, and under the good governance practices the board of directors either maintains and holds that accountability for themselves or they delegate it. So in many areas they delegate responsibility to manage staff, etc. And because there was a lack of clarity on this topic, the commission was asking for clarity and the board sat down, looked at its documents through its governance committee, and agreed that there was not clarity on to whom the DEC was accountable. The board clarified that accountability in actions that it took in January. Those actions were ultimately ratified on February 28, and then the chairman and chair elect came to Washington on March 6 to let the commission know of the board’s decision.
“I know the volunteers who’ve resigned; they’ve all made significant contributions to the organization. The board of directors is also comprised of people who care very much about the organization and I would characterize what happened as two different groups of people coming to different conclusions.”
What the chairman says
The changes to the Disciplinary and Ethics Commission are part of the CFP Board’s strategic plan and were made to increase consistency and accountability.
The Board of Directors changed the line of reporting for the professional review process to go through the CEO to the Board. The CEO has the accountability to make sure this process appropriately and fairly serves the public and certificants. This accountability to the Board of Directors requires that the CEO has authority for how the process is structured. This is even more important as the new Code of Ethics and Rules of Conduct become effective July 1, 2008. These increase the level of accountability of CFP certificants to their clients.
Professional review cases in the future will define and provide guidance to certificants and the financial planning profession of acceptable practice standards.
The DEC members retain the autonomy and independence to make case decisions. Each of the changes brings CFP Board in line with many other standards-setting organizations and represents widely-accepted operational standards and best practices.
David G. Strege, CFP, CFA
Senior Wealth Coach
Syverson Strege & Company
West Des Moines, Iowa
Chair, Board of Directors
CFP Board of Standards
In the May 2008 lead story in the Retirement Planning section, “Introducing the Wealthy to Roth IRAs,” we provided an incorrect date on when income limits were imposed on Roth IRAs. The limits were imposed in the late 1990s, not the late 1980s.