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October 01, 2020 at 05:44 PM
The Certified Financial Planner Board of Standards has approved changes to its governance, enforcement and risk management practices to help the organization enforce its new code of ethics and standards of conduct.
The measures demonstrate that the CFP Board “is putting in place new governance and oversight structures intended to support ramping up its enforcement efforts, and continuing to grow the credibility and brand of the CFP marks (and the CFP Board as an extension of that),” said Michael Kitces, an industry blogger and head of planning strategy at Buckingham Wealth Partners, in an email sent to ThinkAdvisor Thursday.
The efforts build on shifts the group has been making over the past 14 months in the wake of a Wall Street Journal report on how the CFP Board website for investors, LetsMakeAPlan.org, omitted “that thousands of the planners bearing the board’s seal of approval have had customer complaints or faced criminal or regulatory problems — often directly related to their work with clients.”
In a statement, Jack Brod, 2020 chair of the organization’s board, explained, “Modernizing our organization — particularly our governance practices, enforcement program and enterprise risk management — is an essential part of our work as a professional certifying and standards setting body.”
Brod added: “Over the last few months, and with the assistance of consultants from a global consulting firm, the Board discussed and agreed on essential actions to improve our governance of CFP Board.”
The changes were shaped by members of CFP Board’s Independent Task Force on Enforcement, announced last September.
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Ron Rhoades, director of the Personal Financial Planning Program and assistant professor of finance in the Gordon Ford College of Business at Western Kentucky University, says the changes show that the CFP Board “continues to evolve in a positive direction.”
Rhoades added that he’s “especially pleased to see the Appeals Committee’s scope expanded to include oversight of the ethical standards and their enforcement,” according to remarks he shared via email.
