Board Upgrades Its Scrutiny of Financial Planners

The Wall Street Journal analyzed public records at a website run by the Financial Industry Regulatory Authority


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brendan mcdermid/Reuters

The Certified Financial Planner Board of Standards Inc. said Tuesday that it is upgrading its scrutiny of financial planners and appointing a task force to review its enforcement and disclosure procedures.

A Page One article in The Wall Street Journal, analyzing public records at a website run by the Financial Industry Regulatory Authority, found that thousands of planners listed on the CFP Board’s website without any disclosures have reported customer complaints, criminal histories, financial problems or regulatory proceedings on the Finra site.

In response to “some important issues” covered in the Journal article, said the CFP Board, it will no longer rely solely on planners to self-report any red flags in their records when they renew their annual certification. Instead, the CFP Board will review each renewing planner’s public records at the Securities and Exchange Commission’s website and at BrokerCheck, the online resource from Finra that the Journal used for its analysis.

“Clearly we’ve been relying on self-disclosure” to monitor whether CFPs’ listings should be updated to include any red flags, said Susan John, chair of the organization’s board of directors, during a press conference Tuesday. “We really do believe that most people are honorable,” she said, “but it’s time for us to do something else.”

The Journal article “pointed out some opportunities” where the organization “could do a better job” in screening and disciplining financial planners, CFP Board Chief Executive Kevin Keller said during the press conference.

The task force, described by the CFP Board as independent, is expected to submit its recommendations to the group’s board of directors by November. It will be chaired by Denise Voigt Crawford, a former securities commissioner for the state of Texas who also serves on the board of directors of the CFP Board.

Write to Jason Zweig at intelligentinvestor@wsj.com

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