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CFP Board News - October 2006


BOARD OF GOVERNORS TO REVIEW COMMENTS ON EXPOSURE DRAFT OF PROPOSED REVISIONS TO CFP BOARD'S ETHICAL STANDARDS

CFP Board thanks the hundreds of individuals and the many organizations that submitted comments on the Exposure Draft of Proposed Revisions to CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Practice Standards. The 60-day comment period ended on September 25, 2006, and CFP Board's Board of Governors will consider the comments at its October 2006 meeting to determine what further action to take with the proposed revisions. CFP Board appreciates all those who took the time to consider the Exposure Draft and share their comments and concerns. That valuable input will help CFP Board ensure that CFP® certification continues to remain a standard of excellence for competent and ethical financial planning.

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CFP BOARD CREATES DEVELOPMENT DEPARTMENT

As the recent Warren Buffett gift to the Gates' foundation highlights, private philanthropy is exploding. Fortunately for CFP Board, two of the three most popular causes foundations fund are education and financial self sufficiency-two areas vital to the promotion of financial planning. CFP Board has therefore created a Development Department to attempt to capture some of this funding. Keith J. Soressi, recently CFP Board's Director of Education and Examination, has agreed to lead the Development Department, which will seek out and secure funding for activities that promote CFP Board's mission.

One of the Development Department's initial activities is to assemble data reflecting the influence that CFP® certificants have in providing benefits to the public. One particular project will involve the review of lists of top financial planners and advisers compiled by business publications to determine the percentage of listed individuals who hold CFP® certification. The lists might be those of investment advisers, brokers, financial planners, insurance professionals or any other financial services area in which CFP® certificants practice. The goal is to show that the CFP® certification helps insure excellence in any financial services field.

If you are aware of city magazines, national magazines, newspapers or online publications with such lists, we would appreciate being notified about them or sent a copy. The more lists we have, the more powerful the resulting data will be. Please send information about lists or copies of lists by e-mail to mail@CFPBoard.org or by fax to 303-860-7388. We expect that quantitative information like this should prove to be convincing data for grant applications and also useful data for CFP® professionals to use in their practices.

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CFP BOARD DISCIPLINARY ACTIONS

CFP Board recently took the public disciplinary actions listed below. Public disciplinary actions taken by CFP Board, in order of decreasing severity, include permanent revocation of an individual's right to use the CFP® certification marks, suspension of the right to use the CFP® certification marks for up to five years, and letters of admonition.

These disciplinary actions were taken by the Board of Professional Review, a board of CFP® certificants that interprets and applies CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Practice Standards as well as investigates, deliberates and takes appropriate action with respect to alleged violations. Consumers can use CFP Board's Web site to check on a planner's disciplinary history and certification status with CFP Board.

Revocations

GEORGIA
David Edward Marcinko (Norcross): In August 2006, CFP Board permanently revoked Mr. Marcinko's right to use the CFP® certification marks after he failed to respond to CFP Board's Complaint investigating his company's use of a mark that is confusing to the public and dilutes the CFP® certification marks. Because Mr. Marcinko failed to respond to CFP Board's Complaint, the allegations in the Complaint were deemed admitted and an order of revocation was issued.

NEW YORK
Steven D. Klein (Lynbrook): In August 2006, CFP Board permanently revoked Mr. Klein's right to use the CFP® certification marks. After a hearing, the Board of Professional Review (Board) found that Mr. Klein entered into a Letter of Acceptance, Waiver and Consent with NASD wherein he consented to a finding that a company, acting through him, allowed an individual to engage in the sale of direct participation programs while the individual was not properly registered with NASD, for which Mr. Klein consented to be jointly and severally fined $10,000. The Board also found that Mr. Klein entered into a Consent Order with the Georgia Commissioner of Securities wherein he admitted 1) an individual was operating an unregistered branch office of Mr. Klein's company and was holding himself out as an investment adviser without being registered; 2) he submitted a document to state regulators falsely stating that an internal audit of his company took place; and 3) an individual under the direction and supervision of Mr. Klein's company advised clients to withdraw money from safe, income-producing IRAs to purchase certain high-risk notes that were not registered or exempt from registration. Pursuant to the Consent Order, Mr. Klein was barred from association with a registered dealer, a limited dealer, or an investment advisor in Georgia. The Board also found that Mr. Klein entered into a Consent Order with the Connecticut Department of Banking wherein he consented to a finding that he willfully violated state law by filing documents that were false or misleading and by failing to file a correcting amendment. Pursuant to the Consent Order, Mr. Klein agreed to a ten-year bar from conducting the following securities activities in Connecticut: a) acting as an agent by representing a broker-dealer or issuer in effecting or attempting to effect purchase or sales of any "security"; b) transacting business as a broker/dealer; c) transacting business as an investment adviser; d) transacting business as an investment adviser agent; or e) acting as a finder for compensation, splitting commissions, or receiving referral fees, directly or indirectly, in connection with any recommendation, sale or purchase of securities. Finally, the Board found that the New Jersey Securities Bureau revoked Mr. Klein's registration as an agent. Mr. Klein appealed the Board's findings; however, after a review of the record, Mr. Klein's petition for appeal and CFP Board's response thereto, the Board of Appeals determined to affirm the findings and the discipline imposed.

Suspensions

CALIFORNIA
David M. Rivkin (San Diego): In July 2006, CFP Board issued an Order of Interim Suspension to Mr. Rivkin pending its investigation of his guilty plea to two felony counts of tax fraud and tax evasion. Mr. Rivkin failed to provide evidence that his right to use the CFP® certification marks should not be suspended, and accordingly, his right to use the CFP® certification marks was suspended immediately, until further notice.

WISCONSIN
Kelly L. Diestler (Oneida): In August 2006, CFP Board suspended Mr. Diestler's right to use the CFP® certification marks for one year and one day, effective from August 18, 2006 through August 19, 2007. After a hearing, the Board of Professional Review found that Mr. Diestler 1) was found jointly and severally liable with his employer to pay a $175,000 compensatory damage award to a claimant who filed an NASD arbitration claim seeking $2 million in damages and generally alleging that Mr. Diestler failed to make a requested transaction and engaged in misrepresentation, churning and unauthorized trades; 2) was found jointly and severally liable with his employer to pay a $145,000 compensatory damage award to claimants who filed an NASD arbitration claim seeking $3 million in damages and generally alleging that Mr. Diestler sold unsuitable investments and used B shares when A shares would have been more appropriate; 3) was found to have caused damage through a negligent breach of fiduciary duty and ordered to pay a $105.721.35 damage award and all arbitration fees and expenses to a claimant who filed an AAA arbitration claim seeking $150,000 in damages and generally alleging unsuitability, fraud and misrepresentation with regard to investments Mr. Diestler recommended; 4) failed to disclose the AAA arbitration on the applicable Certification Renewal Application as required; and 5) falsely attested on an earlier Certification Renewal Application that he had not been a defendant or respondent in a civil, self-regulatory organization or government agency inquiry, investigation or proceeding, as well as mediation or arbitration relating to his professional or business conduct, despite an NASD arbitration filed against him.

Letters of Admonition

ARIZONA
Kelvin William Gold (Phoenix): In August 2006, CFP Board issued Mr. Gold a Letter of Admonition after its investigation of four NASD arbitrations filed against him. After a hearing, the Board of Professional Review found that testimony during the hearing provided evidence that Mr. Gold had a pattern or practice in which he failed to appropriately advise clients as to unrealistic expectations of market returns and that he failed to appropriately counsel one client about the inadvisability of mortgaging her primary residence to fund additional investments in the market.

CALIFORNIA
Cynthia M Couyoumjian (Tustin): In July 2006, Ms. Couyoumjian entered into a settlement agreement with CFP Board, pursuant to which she consented to findings that she disseminated to the public advertising and sales literature that 1) presented oversimplified claims which omitted material information or failed to provide a sound basis for evaluating the facts; 2) contained exaggerated, unwarranted or misleading statements or claims; 3) contained unclear comparisons of investment products that failed to provide a fair and balanced presentation of any material differences between the subjects of the comparisons; 4) were not approved by a registered principal of an NASD member firm; and 5) were not filed with NASD as required, in violation of CFP Board's Code of Ethics and Professional Responsibility. As part of the settlement, CFP Board issued Ms. Couyoumjian a Letter of Admonition.

OREGON
Robert L. Keys (Portland): In August 2006, CFP Board issued a Letter of Admonition to Mr. Keys after its investigation of several matters. After a hearing, the Board of Professional Review found that 1) despite his involvement in several arbitrations and a civil lawsuit, Mr. Keys falsely attested on applicable Certification Renewal Applications that he had not been a respondent in civil proceedings relating to his business or professional conduct; and 2) Mr. Keys and his company entered into a Letter of Acceptance, Waiver and Consent (AWC) with NASD wherein, without admitting or denying the allegations, he consented to a finding that he violated NASD Conduct Rules by failing to keep investor funds in a separate, segregated bank account when the investor funds were released, in violation of the terms of a private placement memorandum, thereby rendering the representations in the memorandum false and misleading. Pursuant to the AWC, Mr. Keys agreed to accept a censure and a $15,000 fine.

PENNSYLVANIA
Thomas C. Hock (Schnecksville): In July 2006, Mr. Hock entered into a settlement agreement with CFP Board, pursuant to which he consented to a finding that he altered an address on a variable universal life insurance application, in violation of CFP Board's Code of Ethics and Professional Responsibility. As part of the settlement, CFP Board issued Mr. Hock a Letter of Admonition.

SOUTH CAROLINA
Christopher E. Cabri (Charleston): In August 2006, Mr. Cabri entered into a settlement agreement with CFP Board, pursuant to which he consented to a finding that he pleaded guilty to a misdemeanor of attempting to purchase a gram of cocaine, first offense, for which he was sentenced to two years of probation and ordered to pay a $2,000 fine. Mr. Cabri completed the probation term in December 2005. Pursuant to the settlement agreement with CFP Board, he also consented to a finding that he falsely attested on a Certification Renewal Application that he had not been a defendant in a criminal proceeding since signing his last Renewal Application. As part of the settlement, CFP Board issued Mr. Cabri a Letter of Admonition.

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REGIONAL TRADEMARK EDUCATION INITIATIVE TO FOCUS ON SEATTLE AREA

Last month CFP Board released an updated Guide to Use of the CFP® Certification Marks and introduced a regional Trademark Education Initiative, which began concentrating CFP Board's trademark review and enforcement activities in the Atlanta, Georgia area.

The initiative will next focus on the Seattle, Washington area. CFP® certificants in the Seattle area may be contacted by CFP Board staff during the next month for a review of the use of the CFP® marks in their business materials.

While the educational initiative will focus on one region at a time, CFP Board has found that it often discovers trademark misuse outside the area of primary focus, which means that CFP® certificants throughout the United States may be contacted about trademark issues. To ensure that your use of CFP Board's trademarks complies with the updated guidelines, we encourage you to review our recently updated Guide to Use of the CFP® Certification Marks.

If you have a question about proper usage of CFP Board's trademarks, CFP Board's Trademark Department is available to answer your questions or review materials. Questions, materials and comments may be sent by e-mail to TrademarkDept@CFPBoard.org or by fax to 303-860-7388.

TRADEMARK TIP:
 
The CERTIFIED FINANCIAL PLANNER™ mark must always be presented in ALL CAPITAL letters. A SMALL CAP font, which leaves the letter at the start of each word large but reduces the size of the other letters in each word, may also be used for the CERTIFIED FINANCIAL PLANNER™ mark.

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RESULTS RELEASED FOR JULY 2006 CFP® CERTIFICATION EXAMINATION

Score results for the July 2006 CFP® Certification Examination were recently released to exam takers. The 10-hour, two-day exam was conducted at 50 sites nationwide. Of the 3,041 individuals who sat for the July 2006 exam, 58 percent passed.

The CFP® Certification Examination covers nearly 100 topics based on periodic studies of the job knowledge necessary to practice financial planning. Similar in concept to the bar examination for licensed attorneys and the exam for licensed CPAs, CFP Board's CFP® Certification Examination requires full integration of knowledge covered in CFP Board's financial planning topic list.

The next exam will be held November 17 and 18, 2006 and will be the first exam to cover the 89-subject topic list created as a result of the 2004 Job Analysis Study.

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PARTICIPATE IN THE STANDARD SETTING MEETING FOR THE CFP® CERTIFICATION EXAMINATION

Would you like to help shape the CFP® Certification Examination and earn up to 12 CE hours for your CFP® certification renewal requirements? Have you been looking for an excuse to visit Denver during the prime post-holiday ski season? If so, CFP Board invites you to participate in the Standard Setting Meeting for the CFP® Certification Examination.

What is the Standard Setting Meeting?

CFP Board uses Standard Setting Meetings to set the passing standards appropriate for the CFP® Certification Examination. The 2004 Job Analysis resulted in updates to the topic list which forms the basis for the exam, and these updated topics are being tested for the first time in November 2006. CFP Board is seeking a committee of volunteer CFP® certificants to take the latest CFP® Certification Examination to assist in setting the passing standard that will be used as a benchmark for all exam administrations until the next Job Analysis. CFP Board's exam administrator, Thomson Prometric, will train participants to rate the questions and determine characteristics that constitute the minimum level of competency that a financial planner must have when seeking the CFP® certification.

Information and Logistics

Date:        Friday and Saturday, January 5 and 6, 2007
Time:        7:30 a.m. to 5:30 p.m.
Location:  JW Marriott, 150 Clayton Lane, Denver, CO 80206
                (303-316-2700)
Deadline:  Friday, December 22, 2006

A full breakfast and lunch will be provided on both days, as will dinner on Friday evening. CFP Board will reimburse participants for reasonable out-of-pocket expenses associated with travel to the Standard Setting Meeting, and participants who attend the entire meeting will receive credit for 12 CE hours.

Only CFP® certificants in good standing with CFP Board can participate.

How to Sign Up

Simply send an e-mail to exam@CFPBoard.org and let us know you would like to attend the Standard Setting Meeting. Space is limited to 25 participants and will be filled on a first come, first served basis. Be sure to include your CFP Board ID number and your contact information in the e-mail.

If you have any questions, please contact Theresa Bartlett, Senior Manager, Examination, at exam@CFPBoard.org.

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