Protecting Public Trust with CFP Board Discipline
CFP® Certificants in the News
Financial advisors, financial planners, and their employers have a vested interest in preserving, if not building upon, public trust in CFP® Certification. This article will focus on a specific interim suspension that, if anything, may initially err on the side of protecting public trust while ultimately providing a just result for the certificant.
Here’s the agenda:
- Identify CFP Board’s authority in ordering an interim suspension,
- Present a verbatim reproduction of the rules,
- Summarize the players in this drama, and
- Disclose an actual case history.
CFP Board's Authority
Effective January 1, 2022
Article 2 of the Procedural Rules establishes two types of interim suspension, discretionary vs. automatic. Automatic suspensions generally occur when a certificant is convicted of a felony, relevant misdemeanor, or pleads no contest to certain crimes or civil lawsuits. Our focus here will be on the discretionary interim suspension.
The Disciplinary and Ethics Commission (DEC) can issue an interim suspension in circumstances where the DEC has reason to believe that the certificant’s behavior is “more probable than not” to represent a threat to the public’s trust in the CFP® mark. Heads up—the Board’s discretionary power extends even to matters in which the certificant has only been charged, not convicted, of a crime.
CFP Board Text of the Applicable Disciplinary Rule
2.1 GROUNDS FOR INTERIM SUSPENSIONS
- Discretionary Interim Suspension
- CCFP Board Counsel may deliver a Motion for Interim Suspension Order to Respondent, together with a proposed Order granting the Motion for Interim Suspension Order. The Motion for Interim Suspension Order must identify the current members of the DEC, request a hearing date, and request expedited pre-hearing deadlines. Respondent must file a response to the Motion for Interim Suspension within 14 calendar days of delivery of the Motion for Interim Suspension, or at such other time as the Chair of the DEC directs. CFP Board Counsel may file a reply to Respondent's response within 7 calendar days of delivery of the response, or at such other time as the Chair of the DEC directs.
- A Hearing Panel will consider the Motion for Interim Suspension Order. The Chair of the DEC must determine whether to hold a hearing on the Motion for Interim Suspension. The Hearing Panel may hold a hearing in person, by telephone, or by video conference. If the Chair of the DEC decides to hold a hearing, then the Chair of the DEC must issue to Respondent and CFP Board Counsel a Notice of Hearing that provides the date, place, and time of the hearing. Respondent, Respondent's counsel, witnesses, and experts may appear in person or by telephone or video at any in person hearing, and by video or telephone at any video hearing. The Notice of Hearing also must set deadlines for filing the documents that the parties intend to introduce at the hearing, identifying witnesses, and submitting agreed-upon written stipulations of fact that will be binding on the parties to the stipulation. The Hearing Panel may proceed with the hearing if either Respondent or CFP Board Counsel fails to appear at the date, time, and place established for the hearing.
- The Hearing Panel must grant the Motion and issue an Interim Suspension Order to Respondent and CFP Board Counsel if the Hearing Panel determines that CFP Board Counsel has demonstrated by a preponderance of the evidence that Respondent's conduct poses a significant threat to the public or significantly impinges upon the reputation of the profession or the CFP* certification marks. A preponderance of the evidence is a standard of review that means “more probable than not,” i.e., evidence which shows that, as a whole, the matter sought to be proved is more probable than not to have occurred.
The Players
| CFP Board Process | Criminal Trial |
| CFP Board Counsel | Prosecuting Attorney |
| The Hearing Panel | Jury |
| The DEC | Judge |
| Certificant (Respondent) | Defendant |
Next, we’ll use the rules and the players referenced above to track the imposition of an Interim Suspension Order.
Disciplinary Process—John Doe
On March 2, 2021, CFP Board Counsel became aware that the certificant, we’ll call him John Doe, was charged (not convicted) with felony conspiracy by the State of New Jersey. The graphic above puts the following steps into a timeline perspective:
- CFP Board Counsel lacks the authority to issue an Order independently but requested an Order from the DEC against John.
- The DEC considered the available evidence, including any conclusions reached by the Hearing Panel to the extent the Hearing Panel was involved,
- The DEC issued the Order on March 23, 2021—forbidding John from using the mark until the issue was resolved,
- Over one year later, after charges were dismissed against John by the State of New Jersey, the Interim Suspension Order was vacated.
The Bottom Line
A reasonable person could draw any number of conclusions about this process. Here’s the author’s view—it seems overly punitive at first blush to discipline John so severely for charges that were later dismissed by the State of New Jersey. However, how could the DEC know the charges would eventually be dismissed? The answer to that question informs a belief that at times, it’s appropriate to suspend a certificant because the charges are “more likely than not” to be proven.
Disclaimer
The information presented herein is provided purely for educational purposes and to raise awareness of these issues; it is not meant to provide and should not be used to provide legal, compliance, investment, tax, estate, insurance, retirement, or financial planning advice of any kind. An experienced and credentialed professional should be consulted in advance with respect to the issues discussed herein. There are variations, alternatives, and exceptions to this material that could not be covered within the scope of this article.
