US media reports question CFP Board conduct
The US organisation sitting at the heart of the Certified Financial Planner (CFP) designation has found itself in the US media spotlight over allegations that the online directory it uses to direct clients to financial planners is neglecting to mention their criminal or regulatory histories.
A report in The Wall Street Journal said the online directory, LetsMakeAPlan.org was promoted as a place where people could find a screened, skilled and trustworthy financial planner but was falling short of that promise.
“What they won’t find there is any indication that thousands of the planners bearing the board’s seal of approval have had customer complaints or faced criminal or regulatory problems - often directly related to their work with clients,” the newspaper report said. “More than 60 have filed for bankruptcy within the past decade although the website says they haven’t disclosed such an event in the last 10 years.”
The newspaper said it had compared data on the LetsMakeAPlan.org site with records kept by the Financial Industry Regulatory Authority with the exercise revealing that more than 5,000 had faced formal complaints from their clients over investment recommendations or sales practices, and hundreds had been disciplined by financial regulators or left brokerage firms amid allegations of misconduct.
The report noted that the CFP Board awarded the CFP designation to stockbrokers, insurance agents, financial planners and investment advisers.
The CFP designation in Australia is controlled by the Financial Planning Association (FPA) and until the implementation of the Financial Adviser Standards and Ethics Authority (FASEA) regime represented a major revenue source for the organisation.
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
