CFP Board Outlines Enforcement for Revised Ethics Code

The board will begin enforcement of the Code of Ethics and Standards of Conduct on June 30.

The Board of Directors of the Certified Financial Planner Board of Standards Inc. announced the adoption of new procedural rules, strengthening the processes for enforcement of the ethical and practice standards for Certified Financial Planner (CFP) professionals.

“CFP professionals have committed to the high standards of competency and ethics that are set forth in the Code of Ethics and Standards of Conduct. CFP Board’s new procedural rules are aligned with the new Code and Standards and outline a process designed to be credible to the public and fair to those whose conduct CFP Board is evaluating,” says Jack Brod, 2020 chair of CFP Board’s Board of Directors.  “The new procedural rules clarify important information for CFP professionals and further strengthen CFP Board’s enforcement process.”

The final procedural rules consolidate and replace the disciplinary rules and procedures and the appeal rules and procedures and will become effective on June 30, when the CFP Board begins enforcement of the new Code of Ethics and Standards of Conduct.

The CFP Board intends for the procedural rules to improve the process that governs those who are subject to the CFP Board’s enforcement function. The CFP Board first released proposed procedural rules for public comment in November 2018, and a revised version was released for a second public comment period in March 2020.

To help CFP professionals understand the updated enforcement process outlined in the new rules, the CFP Board has created an Enforcement Process Guide containing five flow charts that describe the investigative, settlement and hearing processes.

The CFP Board has also updated several documents for consistency with the new procedural rules, including the fitness standards, the sanction guidelines, and the terms and conditions of certification and trademark license (Terms and Conditions).

In addition to updating references to the procedural rules, the fitness standards were updated to remove the process explanations now contained within the procedural rules. The Terms and Conditions were updated to align with the Code of Ethics and Standards of Conduct and the procedural rules, to reference deadlines and requirements now contained in the procedural rules, to clarify that a CFP professional was required to comply with—and was bound by—CFP Board’s standards and policies from the first date of certification through the date of the Terms and Conditions, and to clarify that the CFP Board may revoke the certification of any CFP professional who had not satisfied the certification requirements or fitness standards in place at the time the CFP professional was granted certification. The updated Terms and Conditions also introduce a new requirement that a respondent file an arbitration within 60 days of any final decision of the appeals committee.