First, let me offer my condolences to former CFP Board chairman Alan Goldfarb and the other two (undisclosed) members of Board’s Disciplinary and Ethics Commission who resigned last Friday after a “special committee” found “sufficient merit” in the also undisclosed allegations against them “to refer them for further proceedings” under the Board’s disciplinary rules (see Melanie Waddell’s Nov. 12 article for AdvisorOne: “Shake-Up at CFP Board”).
It’s a lamentable way to end a public career of service that culminated at what some would call the top of the financial planning profession. To their credit—and like former NAPFA chairman Ron Rhoades—the accused advisors voluntarily left their positions so as not to further tarnish the Board, the CFP mark and the planning profession.
Is there a lesson here? Who knows? Unlike Mr. Rhoades, who resigned over an inconsequential disclosure delay which he himself brought to light, Mr. Goldfarb et al.’s infractions remain a mystery due to the Board’s medieval closed door disciplinary proceedings. That disciplinary process doesn’t merely invite, but seemingly begs for speculation, which is damaging both to the reputations of the accused and to the credibility of the CFP Board itself.
Personally, I have little sympathy for Board under the theory that any failure to disclose can easily be construed to signal a coverup of the worst possible behavior on the part of those refusing to disclose: anything less would only enable the non-discloser.
What Your Peers Are Reading
Here’s how Board CEO Kevin Keller explained the situation in an email to Ms. Waddell: “Because of [the Disciplinary Rules and Procedures] confidentiality provision, CFP Board cannot disclose details related to allegations against CFP professionals,” adding that “if a public sanction is warranted, it will be made public once the process is complete.”