In case you missed it in June, CFP Board announced that effective January 1, 2006, all continuing education (CE) taken by CFP® certificants to meet the biennial 30-hour CFP Board CE requirement had to be taken from CFP Board-registered CE sponsors, and any program completed after this date from a non-registered CE sponsor would not be accepted for CE credit with CFP Board.

There were several reasons for the updated policy. CFP Board is making a concerted effort to reduce the amount of paper involved in the certification process and to automate processes where appropriate, as reflected in the introduction of the online renewal process. Part of this initiative is the requirement, also effective January 1, 2006, that all registered CE sponsors report attendee lists electronically. A certificant who takes a CE program from a sponsor registered with CFP Board will not need to fill out CE reporting forms by hand or online, will not need to question whether CFP Board will accept the program, and will not need to retain documentation of programs completed. Certificants will also have timely online verification of completed CE programs.

CE taken from sponsors not registered with CFP Board must be reviewed manually by CFP Board staff, a very labor-intensive and costly process when you consider that over 20,000 certificants renew their certification each year, each required to report 30 CE hours. The biennial certification fees do not currently cover the costs associated with this manual review.

CFP Board appreciates the comments certificants and CE sponsors have provided regarding the announced policy changes. A concern has been raised that the new policy appeared to provide no manual fail-safe for certificants who may take CE from non-registered sponsors to meet CE requirements for another license or designation. Another concern focused on not-for-profit organizations that may not have the financial resources to register all of their programs with CFP Board.

In response to these concerns, CFP Board has explored options and developed a transitional “safety net” it believes addresses these issues fairly and remains consistent with our obligation as a 501(c)(3) entity to spend our resources and assets efficiently in the public interest.

First, CFP Board will continue to accept CE taken from non-registered sponsors reported by certificants but assess a $20 per-program processing fee to cover the costs of the manual review process, a solution that was actually suggested by several certificants. This processing fee will go into effect on January 1, 2006 and will be assessed when reporting CE online. It must be paid online for the CE to be submitted, and the CE will be subject to review to ensure it meets CFP Board’s requirements. Because the processing fee is designed to cover the manual review costs, it will not be refunded if the review determines the program is not acceptable to meet CFP Board’s requirement. This processing fee is not intended to create an additional revenue stream for CFP Board, but simply to cover the costs associated with the manual review process so that CFP Board’s resources are managed in a cost-efficient manner.

Second, CFP Board will establish special rates for not-for-profit entities that provide CE programs to their members. These entities will be required to pay a one-time $100 sponsor registration fee and submit documentation verifying their not-for-profit status. If a not-for-profit CE sponsor does not charge its members to attend its CE programs, CFP Board will waive the program registration fee so the sponsor can register programs online and electronically submit attendee lists. If the not-for-profit CE sponsor does charge its members a fee to attend its CE programs, CFP Board will discount the program registration fee.

CFP Board has been communicating with registered CE sponsors to ensure that all of their programs have been submitted to and accepted by CFP Board for credit. CFP Board will be proactively contacting non-registered CE sponsors used often by certificants to encourage them to register their programs with us. We have also asked certificants to notify their favorite sponsors about the requirement to further get the word out. As a result, 350 information packets have been sent out to prospective sponsors and over 40 new sponsors have registered with CFP Board since June.

CE hours reported by certificants for earning a pre-approved professional license or designation and for qualified teaching or authorship activities will continue to be accepted, and data regarding the pre-approved professional licenses and designations is being added into our information system so they will be automatically accepted when reported online.

CFP Board understands that changes to long-standing processes can be a cause for concern, and we are committed to ensuring all of our stakeholders understand the reasons for such changes.

Under the change to the Bankruptcy Law that will be in effect October, 2005, debtors seeking to file bankruptcy first must either seek out credit counseling from designated providers or obtain 2 hours of financial education from approved providers. CFP Board is exploring the option of becoming an educational provider through an internet based course. This email is being sent to each of you to solicit requests for proposals to create the instructional program materials need to provide the instruction to debtors.

Proposals should take into account that the instructional program must be at least 2 hours long and cover the topics of 1) Budget Development; 2) Money Management; 3) Wise Use of Credit; 4) Consumer Information. It should also take into consideration the need to demonstrate on a 6 month to annual basis the effectiveness of the course. The U.S. Trustee’s Web site may provide additional guidance on the instructional program material.

Proposals should also include a compensation schedule that covers the initial development of the instructional materials, editing of materials, assistance during the process of CFP Board’s application to become an approved provider, working with information technology staff to implement the program, travel and follow-up during the first year the materials are available for use to the public.

Proposals should be received no later than October 25, 2005. An updated status of the proposal evaluation process will be provided on CFP Board's Web Site.

Last winter CFP Board implemented a new information system to manage all the certificant data, as well as information about Continuing Education Sponsors, Registered Programs and other stakeholders. This change has not only streamlined our internal processes, but has enabled us to establish online options for many stakeholders. For example, in May, CFP Board launched online certification renewal, and by July more than 90% of certificants due to renew accessed their secure accounts on www.CFP.net to complete the renewal process. CFP Board is no longer sending out four preprinted forms to 2000 renewing certificants each month, instead sending e-mail notifications and postcards, saving a significant amount of staff time and money.

Also in May, online exam registration became available to candidates. By the end of June, the initial certification application and work experience submission processes were also available online. CFP Board anticipates that candidates who pass the July 2005 exam will be able to complete the remaining initial certification requirements online and be certified in a matter of days, instead of weeks under the previous manual process.

In the next several months, certificants will be able to request a one-time, one month extension to complete their renewal requirements, request voluntary relinquishment, and apply for reinstatement online; and candidates will be able to withdraw from a registered exam and request an extension to meet their work experience requirement online.

At the beginning of August, we began testing secure online Continuing Education program registration with a target group of CE Sponsors. This functionality will be available to all CE Sponsors in the next few weeks. CE Sponsors and Registered Programs also will be able to register themselves with CFP Board and register and renew their programs online once that feature is activated.

We are also working on launching an online store, where certificants and other stakeholders will be able to order brochures, certificates and other merchandise securely and quickly.

Tamara Monroe
Managing Director of Core Operations

A lot has happened in the Professional Review department during the last year. And more can be expected over the next year or two. We will summarize some of these undertakings below, but would be remiss if we did not open by saying that the most important work of the Board of Professional Review (BOPR) and the Professional Review department are our basic operations, and those proceed apace.

In late 2004 the Board of Governors (Board) requested a comprehensive review of our operations and substantive guidelines. Staff took the first step, compiling for the Board a comprehensive memo comparing CFP Board’s operations to those of similar bodies in the US and overseas. This memo contained fifty examples of interesting practices that might, in one form or another, be worth considering.

This memo generated numerous discussions at both Board and BOPR meetings. These bodies weighed and measured the ideas and ranked them based on variables such as importance and difficulty of implementation. Staff took this information and put together a short list of procedural changes for the Board to consider adopting at the fall meeting.

The most substantial of these changes is a proposal to include up to one professional who is not a certificant on hearing panels. There is a strong trend in this direction among professional bodies with obligations to the public—peer-review panels made up solely of the profession’s own are increasingly viewed as too insular or conflicted. The BOPR has already used non-certificant professionals as ex-officio panel members. At their July meeting the BOPR voted to institutionalize this practice.

Over the next year or so we expect that the Board will discuss and implement a variety of other, generally less significant, improvements to CFP Board’s professional review operations. Most of these have in common a desire to ensure that CFP Board’s assets are spent on the most important issues and cases and that decisions are made by the groups or individuals in the best position to make them. The overall system—one that relies on peer-review panels—will remain unchanged.

To ensure that CFP Board runs the best professional review operation it can, the division is also reconfiguring its staffing model. The new model includes more attorneys who will be positioned to take cases from beginning to conclusion. This replaces a system under which cases were handed off from compliance analysts to attorneys.

We are working on two large, longer-term projects, as well. First, at the Board’s request, staff is just starting to develop Sanctions Guidelines that will help the public and certificants understand what aggravating and mitigating factors are likely to affect BOPR decisions. The National Association of Securities Dealers (NASD) has an elaborate set of Sanctions Guidelines for brokers. We expect CFP Board’s Sanctions Guidelines to be roughly similar in format.

Second, we are working to create detailed written procedures that document all of our in-house processes. We do have well established processes but there are a number of advantages to capturing these processes in more detailed writing than currently exists.

More generally we are assessing the department’s use of technology. And, we are working with both the BOPR and the Board to publish another edition of our Practice Standards. We are hoping this new edition will be somewhat easier for practitioners and the public to use. We expect these will also be easier for the BOPR to enforce and interpret.

In the last five years, only a smattering of CFP Board’s legal matters have been handled by in-house attorneys. The General Counsel role was filled by an outside attorney and the vast majority of CFP Board’s legal work was sent to a variety of outside law firms at no small cost to the organization.

Now, CFP Board has a true legal department comprised of an in-house General Counsel and very capable paralegal staff. Changing to this staffing model means that individuals who are very familiar with CFP Board’s business operations will integrate risk management strategies into each of CFP Board’s day-to-day decision making processes. Plans to “take back” many of the legal functions that were routinely outsourced will better protect the corporation, governors and staff from claims of liability in a more cost-efficient manner than in the past.

The following areas have been the focus of the work by staff in the legal department:

Corporate Governance
The legal department is the company’s resource for vital corporate documents such as articles of incorporation, by-laws and governance policies. Ensuring CFP Board’s management and Board of Governors act in compliance the corporation’s governing documents is perhaps the most important function of the General Counsel. In addition, the on-going evaluation of CFP Board’s activities in light of the organization’s public mission and tax status are being moved from outside counsel to CFP Board’s in-house counsel.

Intellectual Property
CFP Board owns numerous trademarks and copyrights, including “the big three:” CFP®, CERTIFIED FINANCIAL PLANNER™ and certification marks. Monitoring and protecting CFP Board’s intellectual property is a major undertaking for the legal department. Activities include pursuing unauthorized users of the marks as well as trademark and copyright infringers, sometimes in civil court, filing oppositions and other actions in the United States Patent and Trademark Office, and encouraging correct usage of the marks by both certificants and third parties who reference the marks, to name a few.

Corporate Transactions
Work has progressed on a centralized repository of information and report generation related to CFP Board’s corporate contracts. A system has been developed that is capable of executing built-in reminders, flags and other critical milestones to track CFP Board’s relationships with other parties.

Human Resources
Legal department staff is working diligently to configure and input data into new payroll and benefits administration software that includes an employee self-service component. CFP Board continues to use outside counsel specializing in employment issues, but most routine employment matters are handled by the General Counsel.

To summarize, proper evaluation and use of outside counsel, paired with competent and professional handling of many corporate legal matters in-house is allowing CFP Board to realize substantial cost-savings. The General Counsel’s role in determining corporate-wide policies and procedures will serve to manage legal risk to the organization. Educating staff about the legal department’s responsibilities and abilities has, and will continue to establish the legal department as a separate and distinct part of the organization. The goal is to engender an acceptance of legal risk analysis as an essential part of CFP Board decision-making.

Margaret Brock
General Counsel