It has been almost a year since Alan Goldfarb resigned as chairman of the organization that oversees the certified financial planner designation. To put it mildly, he's still not happy with how the CFP Board handled the case and would like the board to make amends.
On Oct. 30, 2012, Mr. Goldfarb stepped down from his leadership position at the Certified Financial Planner Board of Standards Inc. when the organization alleged that he had violated CFP rules regarding compensation disclosure.
Mr. Goldfarb said the board should have addressed ambiguities in its definition of “fee-only” before pursuing any enforcement cases.
In June, the CFP Board's Disciplinary and Ethics Commission formally admonished Mr. Goldfarb for misrepresenting his compensation — first as “fee-only,” then as “salary” — on the Financial Planning Association website when he was director of wealth strategies at Weaver Wealth Management.
“You do the definition and clear it up first before you sanction someone for following what they perceived to be the only definition out there,” said Mr. Goldfarb, who is now managing director of Financial Strategies Group LLC. “I'd love to see some form of recognition as well as compensation for at least the expenses for fighting the case.”
Mr. Goldfarb has maintained his innocence all the way through. At the time he resigned as chairman, two members of the disciplinary panel also resigned for allegedly misrepresenting their compensation. One of them was Tina Florence, a partner at Lane Florence LLC.
Ms. Florence wants an apology and a refund of her legal costs.
“Investigations were opened before we were given the chance to change our profile information the way that thousands of CFPs were just given in the past [few] days,” she said.
Last week, the CFP Board temporarily removed the “fee-only” description from its website and told the 8,000 CFPs who had been using it in their profiles to review the organization's definition of “fee-only” and restore the term, if it fit their practice.
The controversy over the “fee-only” description originated prior to Mr. Goldfarb's case with a similar proceeding launched by the CFP Board against Jeff and Kim Camarda, managing members of Camarda Financial Advisors LLC. The Camardas have filed a lawsuit against the CFP Board.
Like Mr. Goldfarb and Ms. Florence, Kim Camarda thinks the CFP Board should have sorted out the compensation situation before turning to enforcement.
“That's all we've ever asked them to do,” Ms. Camarda said. “Be clear in this definition. There's obviously a misunderstanding here.”
Under CFP Board rules, a holder of the mark can deem himself or herself “fee-only” only if their compensation is solely derived from fees charged to clients and they are not affiliated with a financial firm that charges commissions. If CFPs work for a firm that has a brokerage arm, or own a stake in such a company, they must call their compensation “commission and fee.”
Earlier in the week, CFP Board spokesman Dan Drummond said the organization has been reaching out extensively to CFPs to help them comply with compensation description. He said the goal is to protect the public.
“We're erring on the side of the consumer and providing clarity,” Mr. Drummond said.