The Certified Financial Planner Board of Standards announced Wednesday that it's seeking comments by Feb. 17 on whether to modify the way the board handles bankruptcy filings by CFPs.
As it stands now, the CFP Board asks CFP candidates on their initial application if they've filed for bankruptcy to determine whether they are "fit for CFP certification," and in the case of a CFP professional, to determine whether the bankruptcy filing resulted from conduct that would warrant discipline. CFP professionals are asked on their CFP renewal application, which they must fill out every two years, whether they have filed for bankruptcy.
The CFP Board says that it proposes replacing the current disciplinary approach to cases involving a "single bankruptcy filing (bankruptcy-only cases)" with a "non-disciplinary, disclosure-oriented approach" in which the public has access to notice of the bankruptcy filing to assist it in making an informed decision when evaluating whether to work with a CFP professional who has filed for bankruptcy.
Under the proposed approach, the CFP Board says that it "would no longer investigate and the Disciplinary and Ethics Commission would no longer hear bankruptcy-only cases."
