CFP Board overhauls its sanctions and certification rules

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The professional body for financial planners says it's making changes to maintain fairness while serving the public’s best interest.

The CFP Board is adopting a raft of revised guidelines and standards aimed at bolstering ethical conduct and accountability among financial planning professionals.

The updates, set to take effect July 1, include changes to its sanction guidelines, fitness standards for candidates for CFP certification and former CFP professionals seeking reinstatement, and procedural rules.

The revised sanction guidelines will apply to misconduct occurring after the July 1 effective date, while the updated fitness standards will affect all candidates submitting their applications for CFP certification from that date onwards.

The Certified Financial Planner Board of Standards Inc. has also updated its procedural rules to reflect these adjustments, which will govern all proceedings that are pending or will commence after the implementation date.

“These revisions will further the standard for financial planners to advance the profession and serve the best interest of the public while maintaining fairness for CFP professionals,” CFP Board CEO Kevin R. Keller said in a statement.

The wide-ranging revisions include a new inventory of 52 conduct categories aligned with the CFP’s Code of Ethics and Standards of Conduct, as well as a list of 25 general aggravating and mitigating factors.

The framework for assessing a candidate’s fitness has also been revamped, clearly defining scenarios where an applicant may be permanently barred, deemed currently ineligible, or required to petition for a fitness evaluation for CFP certification.

Other key updates include:

An expanded list of specific aggravating and mitigating factors linked to distinct conduct categories;
A comprehensive description of conduct that will lead to a permanent prohibition, a decision to make an applicant ineligible for CFP certification, or a required petition for fitness;
A uniform application of the Sanction Guidelines to both candidates and existing CFP professionals

The CFP Board is making the changes after an exhaustive multiyear review by its Commission on Sanctions and Fitness – a group it established in 2021 – as well as a public consultation that included a webinar and in-person meetings in five cities.