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CFP Board

May 21, 2014

Dear CFP® Professional,

When I became a CERTIFIED FINANCIAL PLANNER™ professional in 1990, the public had very little idea of what financial planning was, much less what the letters “CFP” meant after someone’s name. Now, nearly 25 years later, the CFP® certification is recognized as the highest standard for financial planners by the public and financial professionals alike.

This didn’t just happen. It is the result of tens of thousands of CFP® professionals like you who embody and reflect the competency and ethical standards in your daily work with your clients, as well as the efforts of CFP Board’s dedicated volunteer leadership and staff.

To maintain CFP® certification as the recognized standard, CFP Board has put in place an array of resources to assist CFP® professionals with compliance, including a compliance checklist, frequently asked question documents, compliance guidelines, sample disclosure forms, webinars, and the opportunity to seek individualized guidance as to the application of our Standards of Professional Conduct to specific facts and circumstances.

Most recently, CFP Board has worked to facilitate compliance with our rules and definitions related to compensation disclosure, including a Notice sent by first class mail last August reviewing the obligation of CFP® professionals to make accurate disclosures of compensation methods on all public websites, public search engines, and public disclosure forms.

We are taking additional steps to facilitate compliance with our compensation disclosure rules and definitions and promote the availability of accurate information to the public.

  • Review of Compensation Information on “Find” Tool. CFP Board will initiate a systematic review of the information CFP® professionals communicate to the public through our “Find” tool to better ensure the accuracy of the communication. Using risk-based prioritization and random sampling, CFP Board will compare compensation information entered on our “Find” search tool with compensation information available through public sources such as regulatory filings and firm websites. As we made clear in last September’s communication to the CFP® professionals who identified themselves as “fee only” on the “Find” tool, if CFP Board discovers potentially inaccurate compensation information, CFP Board will conduct further review that may lead to an investigation. While CFP Board does not conduct audits or examinations of CFP® professionals like those conducted by the SEC, FINRA and other regulators, CFP Board has the authority, consistent with our Standards, to review public information that relates to CFP® professionals in order to evaluate the accuracy of such information.

  • Firm Exclusion List. Under our rules and definitions, if a CFP® professional or a related party (including the CFP® professional's firm) receives commissions, the CFP® professional may not describe his or her compensation method as “fee only.” CFP Board is offering those firms, whose business model or structure would preclude such CFP® professionals from identifying themselves as “fee only” under our Standards, the opportunity to instruct CFP Board to “block” the CFP® professionals from stating that they are “fee only” on our “Find” tool. All firms, regardless of size or business model, may make this request. Firms that wish to be placed on our Firm Exclusion List, or who would like guidance on whether this option is appropriate for their situation, should contact Sara Muehlbauer, Firm Relations Manager, at sara@cfpboard.org.

As always, CFP® professionals may receive guidance as to the application of our rules and definitions by contacting standards@cfpboard.org.

Let me close by assuring you that the Board of Directors of CFP Board is squarely committed to preserving and protecting the integrity of the CFP® certification. We believe that these additional steps to facilitate compliance with our rules and promote the accuracy of information on our websites will benefit the public as well as our CFP® professionals.

We would also welcome any comments, questions or feedback at BOD@cfpboard.org.

We look forward to working with you to achieve our goal of increasing the quality of CE by putting in place standards and review processes consistent with those which have proven effective in the established professions.

Sincerely,

Ray Ferrara, CFP®
Chair, Board of Directors

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.