CFP Board of Standards Tightens Review of Financial Advisors

CFP Board criticized for not disclosing the disciplinary history of financial advisors featured on its LetsMakeAPlan.org site.

According to CNBC on Tuesday, the CFP Board of Standards, of the Certified Financial Planner credential, is establishing an independent task force to review its enforcement practices, in an effort to help investors choose a trustworthy financial advisor.

“The change comes a day after The Wall Street Journal reported that the Board was not disclosing the disciplinary history of CFP practitioners on its consumer-facing website LetsMakeAPlan.org,” according to CNBC.

According to the Wall Street Journal article, LetsMakeAPlan.org, a directory that prospective clients use to find CFP professionals, makes no mention of disciplinary strikes against more than 6,300 financial advisors on the website, even though those advisors have disclosed customer complaints and more to the Financial Industry Regulatory Authority.

Although users of the CFP website may view certification status of a financial advisor, his or her disciplinary history with the board and whether he’s had a bankruptcy disclosure in the last 10 years, currently there is no record of customer complaints, criminal charges or regulatory enforcement.

Instead, consumers must go to FINRA’s BrokerCheck site or on the Securities and Exchange Commission’s Investment Advisor Public Disclosure Site for that information.

According to the article, the organization has historically relied on CFP practitioners to self-report, even though new candidates for the certification are subject to detailed background checks, including review of any disclosed disciplinary issues.

Critics claim it’s not enough.

The CFP Board reportedly plans to include reviews of FINRA’s BrokerCheck and the SEC’s advisor site during the certificate renewal process instead of relying on self-disclosure.

Further, consumers will reportedly soon be able to access data from the two regulators’ sites through LetsMakeAPlan.org and CFP.net/verify.

According to the article, the best way to choose a financial advisor is by doing your own legwork:

• Check out a potential advisor by visiting FINRA BrokerCheck and the SEC’s investment advisor public disclosure page.
• Find out if your financial advisor is a fiduciary, placing your best interests above his own.
• Ask questions about how your advisor is paid: Will they earn fees or commissions for selling insurance, annuities and investments? Will they charge you a percentage of the assets they manage for you?
• Find out where your money is held. Are your assets in custody of your Broker-dealer firm?

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We represent investors in FINRA arbitration claims in all 50 states. Our attorneys have recovered millions of dollars from many brokerage firms in the past.

If you are concerned about your investments with your financial advisor, please call the securities fraud attorneys at The White Law Group at 888-637-5510 for a free consultation.

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