The Certified Financial Planner Board of Standards Inc. is expected to issue a public admonition letter next Monday to Alan Goldfarb regarding allegations that Mr. Goldfarb, the former CFP Board chairman, failed to describe how he was compensated accurately on the Financial Planning Association's website.
Although such a letter is the mildest formal penalty the board can issue to CFP certificants, Mr. Goldfarb has come out swinging.
“What I originally perceived to be a fair, impartial and transparent process wasn't actually such,” Mr. Goldfarb wrote in a four-page rebuttal to the charges obtained by
InvestmentNews. The case was “nothing more than a misunderstanding on how to report my compensation on the FPA's website.”
(What to read: How it all started)
At worst, “it should have been dismissed with a caution,” Mr. Goldfarb added in an interview. “I still don't think I did anything wrong.”
Mr. Goldfarb claims he was paid a salary at this former firm, Weaver Wealth Management LLC, which is owned by an accounting firm.
But since he had a small, noncompensated equity stake in the accounting firm's broker-dealer and insurance agency, the CFP Board felt that listing his compensation as fee-only and salary on the FPA's website was misleading, Mr. Goldfarb wrote.
The case was “blown out of proportion because of my leadership role as chairman of the CFP Board,” he said in the statement. “I expected to be treated impartially, but now believe the CFP Board's management felt backed into a corner. I expected to be afforded the same treatment as any other certificant, but that did not happen.”
He said others with similar violations had received nothing more than a private warning.
Mr. Goldfarb told
InvestmentNews he was surprised that the board would be admonishing him.
“I felt it was [a] cut and dry” case, he said.
But the board's disciplinary panel apparently felt his salary had been “tainted” by commission revenue coming from subsidiaries, he said.
Mr. Goldfarb added that any salaried or fee-based adviser whose firm earns some commissions could face similar repercussions from the CFP Board for misstating their method of compensation.
The board has “to define some of these [compensation descriptions] before taking action,” against people, he said.
Mr. Goldfarb does not plan to appeal the case.
“If and when we have an announcement related to this matter, we will release the information to the public,” said CFP Board spokesman Dan Drummond in an email.
Last November, the CFP Board announced its disciplinary proceeding against Mr. Goldfarb, at which time he resigned from the board.
Mr. Goldfarb left Weaver Wealth late last year and later formed his own firm, Financial Strategies Group LLC in Dallas, which is affiliated with Concert Wealth Management.
He said his departure from Weaver Wealth was unrelated to his dispute with the CFP Board.
