CFP Board Announces New Guidelines for Disciplinary Sanctions

Will help guide Disciplinary and Ethics Commission in deliberations

Certified Financial Planner Board of Standards, Inc. today announced that its Board of Directors has approved the organization’s first-ever Sanction Guidelines, which will be used by the Disciplinary and Ethics Commission and staff when determining sanctions for particular CFP Board violations.

The Board of Directors approved the Sanction Guidelines – effective August 27, 2012 – at its July board meeting following careful and thoughtful review of feedback received from stakeholders during the comment period.

“These guidelines will help CFP® professionals understand what types of punishment they may receive for violating the rules they have agreed to as well as provide staff and the Disciplinary and Ethics Commission clear guidance on the appropriate sanction for a violation,” said Kevin R. Keller, CEO of CFP Board.

CFP Board enforces its ethical standards by investigating incidents of allegedly unethical behavior by following the procedures established in CFP Board’s . In cases where violations are found, CFP Board may impose discipline ranging from a private letter of censure or public admonition to suspension or revocation of the right to use the CFP® marks.

CFP Board’s enforcement process includes written notice to individuals under investigation, the opportunity to respond to the matters under investigation, the opportunity to appear at a hearing to address allegations of misconduct, the right to be represented by legal counsel and introduce witnesses and evidence and the right to appeal decisions involving discipline.

In keeping with having a fair, thorough and expedient disciplinary process, CFP Board developed the Sanction Guidelines to help staff and the DEC maintain consistency regarding the imposition of sanctions for the violations of CFP Board’s Standards of Professional Conduct.

The Sanction Guidelines identify the sanction guideline for violations of the Standards of Professional Conduct and policy notes for the DEC to consider when imposing the appropriate sanction. However, the DEC is not bound by the Sanction Guidelines, which are intended, along with anonymous case histories, to guide the DEC in its decision making.

The DEC may deviate from the sanction guideline if there are aggravating factors that warrant a more severe sanction or mitigating factors that warrant a less severe sanction. The Sanction Guidelines may also be used by the Appeals Committee of the Board of Directors, which considers appeals of the DEC’s decisions.

The decision by the Board of Directors followed a 45-day comment period held from April 30, 2012 through June 14, 2012, during which CFP Board received a total of 33 comments and 162 responses to an online survey. Many commenters suggested that the sanction guidelines for specific categories of conduct were too lenient but were generally in favor of the proposed Sanction Guidelines. CFP Board considered these comments and modified its initial proposal to increase the sanction guidelines for several categories of conduct. In other instances, CFP Board amended the guidelines to provide for more clarity.

CFP Board will discuss the Sanction Guidelines in more detail during a webinar on August 14, 2012. The Sanction Guidelines can be found on CFP Board’s website at
www.CFP.net/downloads/CFPBoard_Sanction_Guidelines_2012-07.pdf.