New CFP Board Sanctions and Guidelines
Good to Know
CFP Board is changing the way CFP® Certificants and Candidates for CFP® Certification are disciplined (sanctioned) for violations of the Code of Ethics and Standards of Conduct. The new guidelines will be effective on July 1, 2024. In many cases the new potential sanction is more severe than previous sanctions but in other cases the sanction is potentially less severe. The author highlights three revisions to the previous disciplinary rules in this article:
- Forgery,
- Inaccurate CE reporting, and
- Violation of Duty When Recommending, Engaging, and Working with Additional Persons.
Forgery
Prior Sanction Guidelines
- Any forgery [emphasis added] could result in a suspension of the right to use the CFP® mark for “at least a Year and a Day.”
New Sanction Guidelines—The new guidelines differentiate between forgery with and without authorization.
- Forgery Without Authorization—The sanction is revocation of the right to use the CFP® mark for life but a “lower sanction based upon application of the aggravating and mitigating factors” is possible. For example, forgery with the intent to defraud is could result in revocation but forgery where the CFP® Certificant had a “reasonable but mistaken belief of express or implied authority” could qualify for a less severe sanction.
- Forgery With Authorization—Suspension for up to one year is the general penalty with the potential for a less severe or more severe sanction based upon “aggravating and mitigating factors.”
Disciplinary impact—Bottom line, forgery sanctions could be more severe where authorization is absent but less severe when authorization is present or the Certificant has a reasonable basis to believe they had authorization.
Inaccurate Continuing Education Reporting
Prior Sanction Guideline
- Private Censure
New Sanction Guidelines
- Suspension for up to one year is the baseline penalty with the potential for a less severe or more severe sanction based upon aggravating and mitigating factors.
Disciplinary impact—Sanctions could be more severe as a baseline but less severe if there were “mitigating factors.”
Violation of Duty When Recommending, Engaging, and Working with Additional Persons
Prior Sanction Guideline
- Suspension for up to One Year, “with potential aggravation to a higher sanction or mitigation to lower standard based upon the application of the application of the aggravating and mitigating factors.”
New Sanction Guidelines
- Public Censure, “with potential aggravation to a higher sanction or mitigation to lower standard based upon the application of the application of the aggravating and mitigating factors.”
Disciplinary impact—Sanctions could be less severe as a baseline.”
Summary—CFP® Certification is the most trusted financial planning certification and one of the most trusted certifications for financial advisors. After having obtained your CFP® certification, be aware of the risks of losing it by reviewing the entirety of the new Sanction Guidelines.
