A task force charged with modernizing the Certified Financial Planner Board of Standards’ enforcement practices has found that “the oversight, operation and structure” of the board’s enforcement program “are not adequate to ensure reasonable compliance by certificants with the CFP Board’s standards of conduct.”
Among the recommendations in the task force’s report:
- The creation of an ongoing enterprise risk management program whose primary focus should be the board’s enforcement program
- A substantial increase in resources devoted to ensuring the enforcement program is reasonably designed to achieve an appropriate level of compliance
- The retention of a “seasoned” director of enforcement with prior supervisory enforcement experience with a financial services regulatory entity
- An annual review of every CFP certificant and deployment of systems that can provide continuous searching of publicly available information about CFP certificants, plus a requirement for CFPs to certify annually that they have no reportable events
- Requirement that certificants report such events to the board within 30 days of occurrence or be subject to “severe public sanctions up to and including revocation”
The task force did not recommend explicitly that the CFP Board publicly disclose certificants’ misconduct on its letsmakeaplan.org website, where consumers can search for a CFP professional.
The CFP Board’s failure to do so was the focus of a Wall Street Journal report in July, which led to the creation of the CFP’s Independent Task Force on Enforcement.