CFP Board considers stronger penalties for hiding conduct violations

On Behalf of | Aug 2, 2021 | CFP Board

New measures are being proposed to strengthen ethical guidelines among certified financial planners, according to a report in InvestmentNews.

The Certified Financial Planner Board of Standards is calling for tougher sanctions for CFP professionals who do not report their own potential misconduct to the board on a timely basis or who do not submit an accurate ethics declaration.

The CFP Board, which sets standards for financial planning and oversees the CFP certification, released its set of proposals for public comment.

Under current guidelines, a private censure is imposed for those CFP certificants who do not disclose their own misconduct to the CFP Board within 30 days or who file an ethics declaration that is not accurate. The board has now proposed strengthening the punishment for infractions in those two categories to a public censure, which would include having an individual’s violations published in a press release and posted on the CFP web site.

Another proposed change would allow certified financial planners accused of a single violation of self-reporting standards to avoid having to pay a hearing fee by accepting the public censure.

Public comments on the proposals are due by September 21. The CFP Board will take those comments into account before releasing its final procedural rules. The board’s general counsel, Leo Rydzewski, said tougher sanctions than public censure could be considered depending on the input received during the comment period.

The proposals are based on the first set of recommendations from the CFP Board’s Commission on Sanctions and Fitness, formed this past February to help strengthen enforcement of standards for ethical conduct in the industry.

Lewitas Hyman represents financial professionals, financial institutions and investors in investment loss, employment and disclosure matters, and in regulatory investigations. Contact us by phone at (312) 291-4600 or through our online contact form for a free consultation.

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