CFP Board To Publicly Disclose Disciplinary Records: Are You Prepared?

The Certified Financial Planner™ Board of Standards (CFP® Board) is shaking things up with a new policy that could significantly impact CFPs® and their clients. Here’s a breakdown of the changes, what they mean for you, and how AdvisorLaw can help navigate these new waters.

Public Report Cards For CFPs®? Starting July 1st, 2024

Get ready for more transparency. The CFP® Board will now publicly disclose disciplinary actions, including public censures, for newly certified CFP® professionals. This information won’t be buried deep within the CFP® Board website, either. It will be prominently displayed on the CFP® Board News page and likely receive wider exposure through press releases, similar to how it currently announces sanctions against CFPs®.   

CFP® Board Adopts Revised Sanction Guidelines & Fitness Standards

In addition to the public disclosure of disciplinary actions, the CFP® Board is also implementing a broader reform effort. On July 1st, 2024, the following will take effect: 

  • Revised Sanction Guidelines: These establish a clearer framework for imposing sanctions based on the severity of misconduct. The aim is to ensure consistent consequences for similar offenses.
  • Revised Fitness Standards: These revised standards outline the ethical requirements for becoming a CFP® professional and regaining certification after disciplinary action.

For more details about these revisions, please refer to the CFP® Board announcement.

What This Means For CFPs

This new policy means that any blemishes on your record as a CFP® professional could become easily accessible to the public, including potential clients. This could raise concerns for CFPs® who have faced past disciplinary actions — even minor ones. A public censure, for instance, could appear more serious than it is, potentially harming your reputation and hindering your ability to attract new clients. 

While the initial policy applies to newly certified professionals, there’s a chance that the CFP® Board could expand public disclosure to all CFPs® in the future.

What This Means For Clients (And How It Can Hurt Your Business):

Increased transparency can be a double-edged sword. While clients may appreciate easier access to a CFP’s® disciplinary history, it’s important to consider how they might react to negative information — even minor infractions. Here’s how the CFP® Board’s new policy could hurt your business:

  • Client distrust: A public censure or termination disclosure, regardless of severity, could raise red flags for potential clients. They may put into question your judgment, ethics, or competence, leading them to seek out a different advisor with a spotless record.
  • Loss of reputation: Negative publicity can be damaging. If news of disciplinary action reaches your potential clientele through press releases, it could erode your reputation.
  • Difficulty attracting new clients: In today’s competitive environment, clients have access to a wealth of information about financial advisors. A public disciplinary record could put you at a significant disadvantage, compared to CFPs® with clean records.

The CFP® Board’s focus on transparency may benefit clients by providing them with more information — but it’s crucial to understand the potential downsides for CFPs®.

How AdvisorLaw Can Help

At AdvisorLaw, we understand the importance of protecting your reputation and career. If you’re concerned about a negative mark on your record, such as a public censure or a U5 termination disclosure, we can help.  We specialize in regulatory defense and expungement for financial professionals. Here’s what we can do for you:

  1. Review your CFP® record: We’ll thoroughly analyze your CFP® record to identify any potential issues and determine the best course of action.
  2. Explore expungement options: In certain situations, it may be possible to get negative disclosures removed from your record. We’ll explore your eligibility for expungement and guide you through the process.
  3. Develop a defense strategy: If expungement is not an option, we can help you develop a strong defense strategy to minimize the impact of a disciplinary action.

Don’t Let A Past Issue Hold You Back

The new CFP® Board policy creates a new landscape for CFPs®.  If you’re worried about the public disclosure of a disciplinary action on your record, contact AdvisorLaw today for a consultation. We can help you understand your rights, explore your options, and take steps to protect your reputation and your career.

Remember: Transparency is a double-edged sword. While it empowers clients, it can also expose CFPs® to greater scrutiny. AdvisorLaw can be your partner in navigating this new era of CFP® regulation.

Contact us today if you’re interested in learning more about our Enforcement Defense services.

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