Wall Street Journal Blogger Refutes CFP Board's Response To His Accusations; Says CFP Board For Years Has Publicly Preached Putting Clients First

Thursday, September 27, 2012 08:52
Wall Street Journal Blogger Refutes CFP Board's Response To His Accusations; Says CFP Board For Years Has Publicly Preached Putting Clients First

Allan Roth, a CFP and blogger for The Wall Street Journal, refutes the CFP Board's claims about when it was obliged to enforce the fiduciary standard and says the CFP Board's offer to put him on a committee to review disciplinary actions against CFPs came with strings attached.

Two weeks ago, Roth, a CFP practitioner from Colorado, Springs, Col., publicly chastised the CFP Board in his WSJ blog for not enforcing the fiduciary standard. He cited an incident in which he alleged that a CFP professional "double-dipped" by charging a client 5.29% in commissions and advice fees annually on assets in a variable annuity and says he and the client filed complaints with the CFP Board against the other advisor for not doing what was in the client's best interest. Roth accused the CFP Board of giving little more than lip service in requiring CFPs to act in their clients’ best interests.


I posted about Roth's allegations because his effort could help clarify the CFP Board's position on the fiduciary standard. 


The CFP Board responded earlier this week by sending me a statement by its CEO Kevin Keller saying that Roth's allegations covered actions by the accused advisor before the CFP Board began enforcing a fiduciary standard on CFP licensees. 


On Tuesday evening, just as the Jewish holiday of Yom Kippur started, Roth sent me this response below. Because of the holiday, I was delayed in publishing it until now.


Thank you for the response, Mr. Keller.

In actuality, my complaint noted the conduct continued into 2008. The CFP Board had been using the word "fiduciary" before July 1, 2008 and saying that the client comes first since before 2008. The CFP Board has been preaching "client first" for a long time.

For example, on May 9, 2008, you sent an email to the Mole (my pen name) at Money Magazine stating, “We at CFP Board preach Ethics every day. An element of becoming a CERTIFIED FINANCIAL PLANNER™ involves agreeing to abide by our code of ethics.”

I stated in my Wall Street Journal blog post that the CFP Board lost my complaint but did not mention the CFP Board did not have a single question about my complaint. Regarding writing about the Disciplinary and Ethics Commission process, the CFP Board turned down my proposal to have the CFP Board review and even approve the facts being disclosed in my article, but not my opinions on the process. That would have assured, as you put it, “no confidential case information was included.”

I agree with the 88% of CFP professionals you mention who think that financial professionals should be held to a fiduciary standard. I just think this should be enforced. I am beginning to analyze some recent data on CFP Board enforcement to see whether CFP professionals are held to a higher standard than non CFP professionals.

As a CFP professional, I share your goal of working in the best interests of the client. In my opinion, however, we need to recognize conflicts of interests in our profession and provide standards on dealing with these conflicts. For example, when is a fee too high or what is considered fair disclosure? I would like to see the CFP Board come out with positions on these and many other important issues.

I also agree with the Board’s mission to benefit the public and have some ideas of how better achieving this mission can be accomplished. I hope we can meet to discuss them in person in the near future.


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Comments (2)

I guess very few of your subscribers feel that this issue is worth posting about, except perhaps you and me. I wonder why so few of us want to engage on this issue? Seems to me that discussing how the Board enforces and executes its fiduciary standard would be of immmense concern to CFP professionals as well as RIAs who also operate under this standard.
mitchellkeil , September 27, 2012
The posts are being read by advisors. My first post on the topic a week ago has gotten more than 1,700 hits. With just 5000 registered members of A4A, that's a big part of them.

Maybe advisors are not commenting more because the facts from Allan Roth and the CFP Board are largely focused on a specific complaint and both are contradicting each other on important details in their updates and responses.

Maybe they're not commenting because many CFPs are reluctant to criticize the CFP Board publicly.

Also, some comments from CFPs are being posted directly on Allan Roth's blog at http://on.wsj.com/OYvbJL

We've not heard the last of this issue, however.

CFP Board is in a tough spot, having to clarify its position on the fiduciary standard without alienating CFPs affiliated with BDs and brokerages that supervise CFP licensees who are also registered reps.
agluck , September 28, 2012

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