Updated Thursday, July 30, 2015 as of 6:07 AM ET

CFP Board Makes Change to Compensation Disclosure

The CFP Board is trying to clarify what one of its instructors calls the “opaque” compensation disclosure process that tripped up former Chairman Alan Goldfarb and lead to his resignation.

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Comments (3)
Thank you Ann for continuing to write on this subject but the Board's not getting it. It's not a matter of clarifying compensation but rather the attitude of the Board when it comes to how they handle innocent mistakes. The issue is not the wording or which box gets checked as much as the fact that the current Disciplinary Ethics Commission would RUIN a good CFP's long-tenured spotless track record career over an unintentional misunderstanding on a compensation term. That is ludicrous and is not in anyone's best interest. It turns CFP's against their own peer organization and the public abolishments leave the public feeling they can't trust anyone. The issue is not clarification of compensation; it's bigger and more foundational than that. Educate, support, communicate and yes, when a bad CFP intentionally does something bad to a trusting innocent member of the public, hang them from the highest tree but this aggressive prosecution for the infractions CFP's are having their lives ruined over is outside any realm of reasonableness. The Board needs to see who there has created this approach and replace them before they are allowed to continue to ruin this organization and the long-valued CFP marks. Thank you, again, for being our voice as with the current attitude of the Board, we do not dare voice our own opinions. ..what a sad statement!
Posted by Tim E | Thursday, August 08 2013 at 3:47PM ET
Mohrman_Gillis said ""After careful analysis, CFP Board determined that our 'Find a CFP Professional' search tool does not provide an accurate and understandable description of how the client will pay the CFPprofessional," - news flash - the client still wont. That has to be one of the lamest statements around. A client pays 2000 bucks for a plan - the client knows exactly how they paid for it. A CFP on a flat salary is going to get the same salary regardless if the plan costs 2K or 5K.

That being said, who would have thought that the CFPBOS, the organization which for 75 percent of their existence fought the fiduciary standard would now adopt the most stringent definition of fee only. I imagine that the next few quarters will show a large number of certificants getting publicly admonished formisrepresenting their compensation.

@Tim E - Let's not forget that Goldfarb had did have an ownership interest and if I recall the facts correctly, he was needed so that the firm could sell insurance for a commission - and hence the K1.

What I do find shocking is that the CFPBOS feels that this issue is a more egregious violation than blatant and multiple violations of soliciting and gathering clients in violation of state rgeulations.
Posted by Pat P | Friday, August 09 2013 at 9:02AM ET
I completely agree with Tim E's comment. The whole attitude of the CFP board makes me very angry. After reading this article I still think I'm a fee only advisor but maybe I'm really a fee and commission advisor. I will look into this more, but I am now afraid of the CFP board. When you are angry at and afraid of someone who can take away your good reputation and cause you great harm, it is a very bad thing.

I have always practiced complete honesty and always disclosed everything in a client brochure, long before there was any requirement for a plain language brochure. But now the CFP board shows their completely misguided and severe nature of punishment for some small error of understanding or disclosure. Another person wrote that they were thinking of dropping there CFP certification. If the CFP board does not apply their own punishment to their wrong "sanctions committee", then maybe many of us should protest and then if necessary leave.
Posted by Jordan G | Monday, August 12 2013 at 12:42PM ET
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