Financial Planning: Process and Rules - Disciplinary Rules and Procedures
ARTICLE 1: INTRODUCTION
Certified Financial Planner Board of Standards, Inc. (“CFP Board”) has adopted the Code of Ethics and Professional Responsibility (“Code of Ethics”), Rules of Conduct, and Financial Planning Practice Standards (“Practice Standards”), which establish the expected level of professional conduct and practice for CFP® professionals. CFP Board has also established the Fitness Standards for Candidates and Professionals Eligible for Reinstatement (“Fitness Standards”), which apply to candidates for CFP® certification and individuals who were previously certified and are eligible to reinstate the CFP® certification (“Professionals Eligible for einstatement”). The Code of Ethics, Rules of Conduct, Practice Standards, Disciplinary Rules and Procedures (“Disciplinary Rules”) and Fitness Standards may be amended from time to time, with revisions submitted to the public for comment before final adoption by CFP Board. To promote and maintain the integrity of its CFP®, CERTIFIED FINANCIAL PLANNER™, and certification marks (“the marks”) for the benefit of the clients and potential clients of CFP® professionals, CFP Board has the ability to enforce the provisions of the Code of Ethics, Rules of Conduct and Practice Standards. Adherence to the Code of Ethics and Rules of conduct and compliance with the Practice Standards by CFP® professionals is required, with the potential for CFP Board sanctions against those who violate the regulations contained in these documents. CFP Board will follow the Disciplinary Rules set forth below when enforcing the Code of Ethics, Rules of Conduct and Practice Standards for CFP® professionals and enforcing the Fitness Standards.Hereafter, CFP® professionals, candidates for CFP® certification and Professionals Eligible for Reinstatement may be referred to as “Respondent” or “Respondents.”
ARTICLE 2: DISCIPLINARY AND ETHICS DEC
2.1 Function and Jurisdiction of the DEC
CFP Board’s Disciplinary and Ethics Commission (referred to herein as “the DEC”), formed pursuant to and governed by the bylaws of CFP Board, is charged with the duty of reviewing and taking appropriate action with respect to alleged violations of the Code of Ethics and Rules of Conduct, alleged non-compliance with the Practice Standards and conduct reviewed pursuant to the Fitness Standards. The DEC shall have original jurisdiction over all such matters.
2.2 Powers and Duties of the DEC
The DEC shall be required to:
(a) Evaluate the performance of the volunteers during the hearings;
(b) Report annually to the Chief Executive Officer and Board of Directors of CFP Board on the operation of the DEC;
(c) Provide input to the CEO on the selection of prospective DEC members. The DEC Chair and Chair-Designee shall provide input to the CEO on the selection of prospective volunteers who serve temporarily on a Hearing Panel;
(d) At its summer meeting each year, the DEC shall recommend to the CEO, subject to the CEO’s appointment, the DEC Chair to serve during the following calendar year;
(e) Recommend to the CEO, as may be necessary and subject to review and approval of the Board of Directors, amendments to these Disciplinary Rules;
(f) Adopt rules or procedures, subject to review and approval of the CEO, as may be necessary to ensure that the hearings, ratification process and disciplinary decisions are fair to all participants; and
(g) Recommend to the CEO such other rules or procedures as may be necessary or appropriate.
2.3 Powers and Duties of the CEO of CFP Board
The CEO shall be required to:
(a) Appoint the DEC Chair, members and volunteers of the DEC;
(b) Oversee the DEC to ensure it follows the established rules and procedures required to provide a fair process to all participants;
(c) Ensure that each Hearing Panel is comprised of individuals who act in an impartial and objective manner and have no conflicts of interest with the complainant or Respondent subject to the complaint;
(d) Conduct appropriate background investigations of prospective DEC members and volunteers; seek the input of the Board of Directors and the DEC on prospective DEC members; and seek the input of the DEC Chair and Chair-Designee on prospective volunteers; and
(e) Report to the Board of Directors the intended appointments to, and activities of, the DEC.
2.4 Hearing Panel
The Hearing Panel shall consist of three persons, two of whom must be CFP® professionals. A Hearing Panel shall be comprised of two DEC members and one volunteer, unless circumstances make it impractical. One member of each Hearing Panel shall serve as Chair of each hearing. The Hearing Panel Chair must be a DEC member. The Chair shall rule on all motions, objections and other matters presented at, or prior to, a hearing.
DEC members and volunteers shall not participate in any proceeding in which they, a member of their immediate family or a member of their firm have any interest or where such participation otherwise would involve a conflict of interest or the appearance of impropriety. A Respondent must identify any conflicts with potential Hearing Panel members in his or her Answer to CFP Board’s Complaint. Failure to do so will result in the waiver of an objection to the Hearing Panel member. A Respondent may raise any conflicts arising after the filing of his/her answer with the Hearing Panel at the start of the hearing and the Chair of the Hearing Panel shall make a ruling pursuant to Article 9.4.
2.6 “CFP Board Counsel,” “CFP Board Designated Counsel” and “CFP Board
Advisory Counsel,” and the duties thereof:
(a) CFP Board Counsel refers to the staff attorney who:
i. Conducts any investigation commenced under Article 6.1;
ii. Makes the probable cause determination under Article 6.3;
iii. Issues Administrative Orders of Revocation under Article 7.4; and
iv. Presents the case to the Hearing Panel as an advocate for CFP Board.
(b) CFP Board Designated Counsel refers to the outside attorney who presents the case to the Hearing Panel as an advocate for CFP Board.
(c) CFP Board Advisory Counsel refers to the attorney who acts in an advisory capacity in providing advice on the Standards of Professional Conduct and hearing procedures to the Hearing Panel and the DEC during the Ratification Meeting.
(d) No person shall act as both CFP Board Counsel and CFP Board Advisory Counsel during the same set of hearings.
Unless otherwise approved by the Board of Directors, CFP Board’s headquarters shall serve as a central office for the filing of requests for:
(a) the investigation of Respondent conduct;
(b) the coordination of such investigations;
(c) the administration of all disciplinary enforcement proceedings carried out pursuant to these Disciplinary Rules; and
(d) the performance of such other activities as are designated by the CEO.
Article 3: Grounds For Discipline