Sanction Guidelines

PURPOSE OF THE SANCTION GUIDELINES

The mission of Certified Financial Planner Board of Standards, Inc. (CFP Board) is to credential competent and ethical financial planners, uphold CFP® certification as the recognized standard and advance the financial planning profession. CFP Board’s Procedural Rules outline procedures for investigating alleged misconduct and enforcing CFP Board’s Code of Ethics and Standard of Conduct (Code and Standards), which reflects the commitment that all CFP® professionals make to high standards of competency and ethics. A violation of the Code and Standards or the Pathway to Certification Agreement constitutes grounds for sanction. In cases where grounds for sanction are proven, CFP Board may impose a sanction ranging from a private censure, a public censure, a suspension, or a revocation of the right to use the CFP® marks.

CFP Board developed these Sanction Guidelines to provide guidance on the sanction that might apply to particular violations and to promote consistency in the imposition of sanctions for similar offenses. The Disciplinary and Ethics Commission (DEC or Commission), which is charged with adjudicating alleged violations and issuing sanctions, and the Appeals Commission, which reviews and decides all appeals of DEC decisions, consider the Sanction Guidelines in issuing their decisions.

The Sanction Guidelines are not binding on the DEC or the Appeals Commission; the Sanction Guidelines are intended to serve as guidance only. Deviation from the Sanction Guidelines by the DEC and/or the Appeals Commission is not in and of itself an abuse of discretion as defined in the Procedural Rules. It is CFP Board’s intent that publication of these Sanction Guidelines will provide notice to CFP® professionals and others of the types of sanctions that might follow from specific types of misconduct. The Sanction Guidelines may also be used in presenting settlement offers to the DEC.

Principal Considerations

CFP Board has adopted the following list of factors to assist the DEC and the Appeals Commission in evaluation of whether sanction is warranted. These factors are not absolute and are meant to serve as guidance. The DEC and the Appeals Commission may consider other factors in addition to the factors listed below. The Sanction Guidelines contain additional factors that the DEC and the Appeals Commission should consider when making an evaluation. Although a factor listed below may be an “aggravating factor,” the absence of that factor does not necessarily lead to an inference of mitigation. The DEC and the Appeals Commission have discretion to determine the relevancy of the factors listed below and will evaluate each matter on a case-by-case basis taking into consideration the facts and circumstances of the particular case. For violations that are not addressed within the Sanction Guidelines, the DEC and Appeals Commission are encouraged to look to the Sanction Guidelines for comparable violations.

The following factors may serve as either aggravating or mitigating factors:

1. Did the CFP® professional have a prior sanction? If yes, what is the nature of the prior sanction?
2. Did the CFP® professional acknowledge the conduct and the harm that resulted from that conduct?
3. Has the CFP® professional exhibited exemplary conduct since the violation?
4. Did the CFP® professional attempt to remedy or rectify the misconduct prior to detection?
5. Did the conduct occur more than 5 years ago?
6. Did the CFP® professional reasonably rely on the assistance of counsel or the assistance of an accountant?
7. Was there a pattern of misconduct?
8. Were there numerous violations?
9. Did the CFP® professional engage in the conduct over an extended period of time?
10. Did the CFP® professional attempt to conceal his or her misconduct?
11. What was the mental state (i.e., negligent, reckless or intentional) of the CFP® professional?
12. Did the CFP® professional’s misconduct result in direct or indirect harm or injury to the client? If yes, what was the nature and extent of the harm or injury?
13. Did the CFP® professional provide extraordinary cooperation with CFP Board?
14. Did the CFP® professional intentionally fail to cooperate with CFP Board?
15. What was the level of sophistication of the injured or affected client(s)?
16. Has the CFP® professional filed for bankruptcy?

The following factors should not be considered aggravating or mitigating:

1. The CFP® professional was forced or compelled to pay restitution.
2. The CFP® professional agreed to the client’s demand for certain improper behavior or settled a lawsuit.
3. A complaint or lawsuit against the CFP® professional was withdrawn.

Amendments to the Sanction Guidelines

The Sanction Guidelines may be amended from time to time. CFP Board will publish for comment any material changes to the Sanction Guidelines prior to implementation.