On Friday, September 27, CFPs Jeffrey and Kimberly Camarda amended their federal lawsuit (in the Washington, D.C. Circuit) against the CFP Board, asking the Court to vacate the Board’s pending disciplinary action against them; to enjoin the Board from issuing a press release about it; and to award them actual and punitive damages, to be determined.
Their amended complaint states, in part, that the Camardas: “…have been injured, and continue to be injured, in their business, including injuries to their good reputation, good will, established business relationships, income, business designations and certifications, and current and future business relationships.”
Readers of this blog will remember the Camardas as the CFPs who, in defending themselves against a CFP Board sanction for inaccurately describing themselves as “fee-only,” pointed out that three Board members, including then-chairman Alan Goldfarb, had similar business situations while also claiming fee-only status—resulting in the resignations of all three.
The actual basis of the Camardas’ defense (as I understand it) is that although they wholly own both an RIA and an insurance agency, the RIA can rightly be described as “fee-only” because each firm was established as a separate corporation under Florida law, and therefore the Board was wrong to construe them as “functionally one organization,” which isn’t fee-only.
This is one of those cases that I personally have a hard time with: when the claims being made seem so patently ridiculous that my mind doesn’t want to take them seriously. Yet upon a thorough rereading of the complaint, the Camarda case may be more serious than it first appeared. It challenges both the CFP Board’s right to set its own standards for holders of the CFP designation and, by extension, the rights of any organization (NAPFA?) or regulatory body to hold that the “only” in “fee-only” extends to “related parties.”
Should the Board lose the suit, I fear that the term “fee-only” will lose its connotation for consumer-oriented, unbiased advice.