The Certified Financial Planner Board of Standards’ updated background checks of the 87,000 CFP professionals detected conduct requiring investigation of about 1,240 individuals, or 1.4% of the total CFP population.
“Nearly 40% of these investigations involve a tax lien or a civil action that is not customer related,” the CFP Board said. All matters will be reviewed on a case-by-case basis, but not all matters will require adjudication, according to the Board.
The updated background checks are “additional efforts” to enforce the Board’s Code of Ethics and Standards of Conduct, which will take effect June 30.
Jack Brod, chair of CFP Board’s board of directors, said the Board “recognizes there are gaps to close, has prioritized this work and has supported the funding required to implement these improvements, including more than $5 million to complete the background checks, investigate and adjudicate matters of possible misconduct.”
CFP Board CEO Kevin Keller said on a recent call that the board’s enforcement program was “in place to make sure that CFP professionals live up to our Code and Standards. We publicly sanction or permanently revoke certification from individuals who have been found with serious violations of our standards,” through news releases and through the disciplinary information available on CFP Board’s website.
The board is taking steps to modernize its enforcement program in light of findings and recommendations of an Independent Task Force on Enforcement. The task force 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.”
Since December, CFP Board said it has invested “significant resources, both financially and operationally,” to implement many of the task force’s recommendations.
These actions include facilitating consumer access to BrokerCheck and IAPD information from listings of CFP professionals on its public-facing websites, letsmakeaplan.org and CFP.net; requiring CFP professionals to make ongoing disclosures of an expanded category of information within 30 days; and conducting updated background checks.
The CFP Board also created a database of state regulatory actions related to insurance and securities licensing for use when evaluating candidates for CFP certification, along with developing a process to review a leading national database to obtain reports that identify criminal records, tax lien filings, bankruptcy filings and civil lawsuit records.
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