Financial planners are irked at an e-mail sent Nov. 2 by American College chief executive Larry Barton to alumni of the school in reaction to news that Alan Goldfarb, chairman of the Certified Financial Planner Board of Standards Inc., had stepped down, pending an investigation into alleged ethics violations.
“This is a very sad day for our friends at the CFP Board,” Mr. Barton wrote. “These are serious allegations, of course, and we hope that our profession is not damaged by the charges behind them.”
Mr. Barton said that he hopes that “the CFP Board, the Financial Planning Association and others will reflect upon recent incidents and help us come back to basics,” namely that “no single designation has a monopoly on quality [and there is a need for] an independent national body to review and certify designations based on rigor.”
He called on the various organizations to work together.
Mr. Barton's missive irked a number of CFPs, who were quick to note that he would have more room to criticize the CFP Board if The American College had a similar disciplinary process.
DISMAYED BY TONE
“I was very dismayed by the nature, tone and outright schadenfreude of Barton's letter,” Michael Kitces, a partner and director of research at Pinnacle Advisory Group Inc., wrote in an e-mail.
“The ink wasn't even dry on this [CFP Board] news release” about Mr. Goldfarb when Mr. Barton's e-mail went out, said FPA president Paul Auslander, chief executive of American Financial Advisors Inc.
Mr. Goldfarb's resignation is an illustration of the stringent standard of professional conduct that the CFP Board upholds, Mr. Auslander said.
"POLICING MECHANISM'
No other credentialing organization has “a policing mechanism where you might actually have to step aside or have your designation revoked,” Mr. Auslander said.
“With other designations, you pay the money, take the test, and whatever they do after that, nobody knows,” said Sheryl Garrett, founder of The Garrett Planning Network Inc., who has served on the CFP Board's disciplinary commission and as a member of its public-policy council.
The e-mail was sent to alumni and students of The American College, Keith Hickerson, senior strategy consultant at the college, wrote in an e-mail.
“We felt it appropriate that they be aware of this issue and ... in the light of [the] CFP Board's revelations to think about how all of the various organizations” can support one another, he said.
Mr. Hickerson added that though the college has “meaningful ethical enforcement for our designees through the certification committee of our board of trustees, we are educators, not regulators.”
Mr. Kitces said that he responded to Mr. Barton about the e-mail, noting that the CFP Board has already proposed a national body to review and certify designations.
As far as working with other organizations, “it's The American College that sends out press releases with headlines like: "Welcome to the job: American College CEO blasts new FPA boss,'” Mr. Kitces said.
SCHADLE'S COMMENTS
He was referring to an August statement from The American College criticizing Lauren Schadle, the new FPA chief executive, for comments that she made supporting the use of one planning designation.
“We received overwhelmingly positive response to [Mr. Barton's e-mail] with a common theme of the comments being that [the] CFP Board was trying too hard to become a regulator instead of focusing on their core mission,” Mr. Hickerson said.
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