A Florida adviser and his wife, both certified financial planners, are suing the Certified Financial Planner Board of Standards Inc. over a disciplinary case the board brought against them for using the term “fee-only” to describe their compensation.
Jeffrey Camarda, chairman of Camarda Wealth Advisory Group in Fleming Island, Fla., and his wife, Kimberly Camarda, the firm's president, disputed the board's assertion that they misrepresented their compensation, and are asking a federal court to block the CFP Board from giving them a public admonishment.
The board began an investigation of the couple in March 2011 after receiving a complaint from a local competitor, the couple claimed in a lawsuit filed in June 2012 with the U.S. District Court for the District of Columbia, where the case is pending.
After hearing the Camardas' case, the CFP Board issued an order in March 2012 finding that they had misrepresented their compensation as fee-only because the couple also owned a commission-based insurance agency, Camarda Consultants.
The Camardas appealed, but in January a CFP Board appeals panel ruled against them. The court claim is an effort to reverse the board's action.
“I refuse to have my reputation impugned over an unfair and capricious process,” Mr. Camarda said in a statement.
Dan Drummond, a spokesman for the CFP Board, said the lawsuit is without merit.
In a July court filing, the CFP Board said that “Camarda Advisors and Camarda Consultants are functionally one organization” and had a “mutual referral fee arrangement.”
But in their suit, the Camardas claimed that the CFP Board “failed to present or even consider any evidence as to whether Camarda Advisors and Camarda Consultants were, in fact, separate entities and whether any clients of Camarda Advisors or Camarda Consultants had actually been misled.” The board also failed to present any evidence of a revenue-sharing arrangement between the firms, the Camardas said. The couple is not asking for damages.
The Camarda case is similar to the CFP Board's complaint against its former chairman, Alan Goldfarb. In that case, the board accused Mr. Goldfarb of misrepresenting his compensation as fee-only even though he was part owner of a broker-dealer that received commissions. Mr. Goldfarb countered that he received only a salary from his advisory firm.
In June, a CFP Board disciplinary panel issued a letter of admonition to Mr. Goldfarb. He resigned from the CFP Board last November when the board's disciplinary proceeding against him was announced.
The Camardas raised the issue of hypocrisy at the board in their own case, saying that “evidence was presented during the extensive proceedings which demonstrated at least two of the [board] hearing officers had done the same thing as the Camardas,” their lawsuit said.