With the number of bankruptcies among certified financial planners on the rise, the Certified Financial Planner Board of Standards announced Thursday that it will start making CFP holders’ bankruptcies available to the public.
Come July 1, the CFP Board said during a conference call on Thursday that CFP professionals’ bankruptcy filings will be noted on their public profile on CFP Board’s website and will also be mentioned in a news release that CFP Board will issue no less than four times each year.
The board subjects CFP professionals and candidates for CFP certification who have filed a single bankruptcy within the previous five years to its disciplinary process, which CFP Board says has resulted in some outcomes that are not available to the public.
Following a public comment period, which ended on Feb. 17, the board’s directors adopted a new procedure for addressing those individuals who have filed a single bankruptcy within the previous five years and are not under investigation by the board for any other conduct.
Under CFP Board’s new procedure, it will disclose all such bankruptcy filings to the public.
Michael Shaw, CFP Board’s managing director for professional standards and legal, said on the call that CFP bankruptcies have been rising steadily over the past several years, with one filing in 2008, eight in 2009, 20 in 2010, 49 in 2011, and 37 filings in just the first quarter of 2012.