In This Update:

• Bankruptcy Disclosure Procedure
• Amendments to Disciplinary Rules and Procedures
• Amendments to Experience Requirement

Dear Colleagues, 

CFP Board’s Board of Directors recently approved updates to the way CFP Board addresses a single bankruptcy filed by a CFP^® professional or candidate for certification, certain provisions of CFP Board’s Disciplinary Rules and Procedures (Disciplinary Rules) and amendments to the Experience requirement required for initial CFP^® certification.

The changes strengthen the CFP^® certification, enhance public disclosure and provide clarity to its disciplinary rules and procedures. They also further support CFP Board’s mission to benefit the public by granting the CFP^® certification and upholding at the standard of excellence in ethical and competent personal financial planning.

Bankruptcy Disclosure Procedure

Currently, CFP Board subjects CFP^® professionals and candidates for CFP^® certification who have filed a single bankruptcy within the previous five years to its disciplinary process, which has resulted in some outcomes that are not available to the public.

Following review of comments received during a 30-day comment period held from January-February 2012, the Board of Directors adopted a new procedure for addressing those individuals who have filed a single bankruptcy within the previous five years and are not under investigation by CFP Board for any other conduct. These are known as "bankruptcy-only cases."

Under the new procedure, CFP Board will disclose all such bankruptcy filings to the public.  This procedure is consistent with CFP Board's mission to benefit the public and with a CFP^® professional's obligation under CFP Board's Rules of Conduct to disclose any information about the CFP^® professional that could reasonably be expected to materially affect the client's decision to engage the certificant, including a bankruptcy filing.:

With the new bankruptcy disclosure procedure, CFP Board will:

• Verify the bankruptcy filing by checking publicly available records;
• Note the bankruptcy filing on the CFP^® professional’s public profile as displayed on CFP Board’s website, www.CFP.net;
• Include the individual’s name in a news release identifying CFP^® professionals who have filed bankruptcy within the previous five years; and
• Share with consumers and other stakeholders who contact CFP Board regarding a CFP^® professional’s certification status the information in the CFP^® professional’s public profile, including whether the CFP^® professional has filed bankruptcy.

The disclosure of the bankruptcy in a CFP^® professional’s public profile will continue for 10 years from the date CFP Board is notified of the bankruptcy, whether resulting from disclosure by the CFP^® professional or discovery by CFP Board. A retroactivity provision addresses situations pre-dating this new procedure when individuals received public discipline for bankruptcy-only cases.

Read additional information and background on the new bankruptcy disclosure procedure.

These changes are effective July 1, 2012.

CFP Board will discuss the procedure in more detail during a webinar on May 2, 2012. Registration details will be available soon.

Amendments to Disciplinary Rules and Procedures

Through its Disciplinary Rules and Procedures (“Disciplinary Rules”), CFP Board enforces the Code of Ethics and Professional Responsibility, Rules of Conduct and Financial Planning Practice Standards and establishes a process for applying the Standards of Professional Conduct to actual professional activities.

Following a public comment period and review of comments received during a 45-day comment period held from August-October 2011, the Board of Directors approved amendments to the Disciplinary Rules.

These amendments were designed to clarify ambiguities, eliminate inconsistencies and strengthen, in particular, the interim suspension procedures of the Disciplinary Rules.

Some of the key changes include:

• The Disciplinary and Ethics Commission now has the discretion to treat an individual’s failure to respond to a request for information stemming from an investigation as having admitted to the allegations in the complaint.
• CFP Board is now permitted to immediately issue an interim suspension without a hearing in instances where it receives evidence of a conviction or professional suspension.
• CFP Board may now share investigatory information with government regulators and industry self-regulatory organizations (SROs).

These amendments are effective on June 1, 2012.

Amendments to Experience Requirement

Individuals seeking to attain CFP^® certification must complete CFP Board’s Education, Examination, Experience and Ethics requirements. Under the current Experience requirement, those wanting to become certified must have three (3) years of relevant financial planning experience. There are six (6) categories for which someone can obtain experience – personal delivery of financial planning, supervision, direct support, teaching, internships and residency programs. In addition, individuals must successfully complete a course of study addressing a required financial planning curriculum, pass the comprehensive CFP^® exam, pass a background check and agree to CFP Board’s Code of Ethics and Professional Responsibility, Rules of Conduct and Financial Planning Practice Standards.

In 2011, CFP Board conducted a comprehensive review of the Experience requirement in accordance with best practices for professional certification organizations, including CFP Board’s accrediting organization, National Commission on Certifying Agencies. Following a public comment period and review of comments received during a 30-day comment period held from August-September 2011, the Board of Directors approved the following changes to the Experience requirement consistent with CFP Board’s mission:

• CFP Board will recognize two (2) years of full-time experience, or its part-time equivalent, as a way to fulfill the experience requirement when three very rigorous requirements are met and documented:
• The individual is working under the direct supervision of a CFP^® professional;
• The individual is providing direct financial planning services to clients; and
• The individual has documented performance of all six (6) steps of financial planning process.
• CFP Board will no longer require individuals applying for CFP^® certification have six (6) months of experience gained within twelve (12) months of reporting the experience. The requirement that experience must occur within ten (10) years before or five (5) years after the successful exam completion still applies.
• CFP Board will offer a pre-review option for individuals who seek to determine whether experience accrued prior to successful completion of the CFP^® Certification Examination qualifies toward CFP Board’s Experience requirement.

These changes are effective September 1, 2012.

CFP Board appreciates the input of everyone who provided comments during the development of these updates related the CFP^® certification. If you have questions about the new bankruptcy disclosure procedure or amendments to the Disciplinary Rules and Experience requirement, please contact us at 800-487-1497 or mail@cfpboard.org.
 

CERTIFIED FINANCIAL PLANNER BOARD OF STANDARDS, INC.
mail@cfpboard.org
P 800-487-1497 • F 202-379-2299 • CFP.NET
1425 K STREET, NW #500 • WASHINGTON, DC 20005
 
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Certified Financial Planner Board of Standards Inc. owns the certification marks CFP^®, CERTIFIED FINANCIAL PLANNER™, CFP^® (with plaque design) and CFP^® (with flame design) in the U.S., which it awards to individuals who successfully complete initial and ongoing certification requirements.