The CFP Board is calling for comments on a proposed change in the way it discloses CFP declaring personal bankruptcy. The move will let certificants who have filed for bankruptcy in the last five years avoid discipline, but they will still need to disclose their credit status.
Removing declarations of personal bankruptcy from its caseload will "allocate more of CFP Board's resources to investigate other matters such as fraud, misrepresentation, and misappropriation of funds," says the CFP Board, the licensing body of CFPs.
Bankruptcy was a factor in 36% of the 25 actions in the CFP Board's most recent disciplinary report.
Given the more than 60,000 planners falling under the non-profit CFP Board's oversight, planners don't get into trouble very often.
But when they do, the Board wants to make sure its Disciplinary & Ethics Commission has the time to catch them before they sully the good name of the profession as a whole.
As Michael Shaw, the CFP Board's managing director for professional standards and legal, notes, "CFP Board is the only financial planning designation that enforces its rules and standards through a process that may result in sanctions including suspension or revocation of the CFP marks."
Disclosing practitioner bankruptcies ensures that planners who fail to practice what they preach will be publicly noted.
"The proposed policy change continues this commitment of benefiting the public, being transparent and ensuring that consumers are aware of pertinent information about CFP(R) professionals and candidates," Shaw adds. "We believe that this proposed
change provides a better process, allowing for greater consumer protection since we will be disclosing bankruptcy filings for all