Financial professionals with the Certified Financial Planner (CFP) are required to adhere to the CFP Board’s Code of Ethics and Standards of Conduct. The CFP Board will formally open an investigation if they believe a violation occurred.
If you receive a Notice of Investigation from the CFP Board’s Enforcement Counsel, you should contact a securities attorney immediately. When the CFP Board begin an investigation, your CFP designation and reputation become at risk.
The CFP Board generally learns of potential violations by complaints, self-disclosures, U-4's and U-5's and background checks. Some of the types of matters that the CFP Board investigates include:
Litigation and arbitration;
Certain U-4 and U-5 termination reasons;
Customer complaints;
FINRA, SEC, or state regulatory action;
Bankruptcies and liens; and
Certain criminal matters.
When the CFP Board formally opens an investigation, the CFP designee receives a written Notice of Investigation from either a CFP Board. This Notice informs the CFP designee is under investigation and outlines the alleged misconduct. The Notice will include a request for documents and information and typically requires a response a production of documents within 30 days. CFP designees are required to cooperate in connection with any CFP Board investigation and must provide timely, truthful and complete information in response to all CFP Board inquiries.
After reviewing your response and documents, the CFP Board sometimes sends a supplemental written request for additional documents and information, or it may request a deposition.
If the CFP Board determines that there is probable cause that a violation occurred, they typically proceed with the filing of a formal complaint unless a resolution can be negotiated.
The matter will then proceed to a formal hearing before a CFP Board Hearing Panel. The Panel's finding of a violation can be further reviewed by the CFP Board’s Disciplinary and Ethics Commission and the CFP Board of Directors’ Appeals Committee.
Possible Disciplinary Actions
If the CFP Board determines you violated their Code of Ethics and Standards of Conduct, you will be subject to disciplinary sanctions, which may include:
Private censure
Public censure
Suspension of rights to use the CFP marks, up to five years
Permanent revocation of the right to use the CFP marks
All disciplinary matters, except for private censure, are publicly disseminated and considered public information.
When faced with a CFP Board inquiry, retaining an experienced lawyer is critical for the best outcome.