The Curious Case of the CFP Board and a Double-Dipping CFP

Here's how Mr. Keller responded to this assertion in his letter to me:

What's also disappointing is that CFP Board, in a completely transparent effort to illustrate the strength of our enforcement process, extended an invitation to Mr. Roth to serve as a "panel volunteer" on our Disciplinary and Ethics Commission (DEC) and write about it—something  which had never been done before.  

Consistent with our standard procedures for all our DEC volunteers, we asked him to sign a confidentiality provision and—to ensure that no confidential information was unintentionally included—asked to review a draft of the article in advance. Yet, Mr. Roth declined to sign it and thus our offer was turned down. Contrary to his assertion, we never required "approval" of the author's content.

Keller further responds to Roth's claims and addresses the CFP Board's role on a fiduciary standard for all advice-givers and its own fiduciary standard: 

If Mr. Roth's client brought a similar claim today—under our revised standard—the outcome would likely be very different. In fact, under our publicly available sanction guidelines, a breach of CFP Board's fiduciary duty would generally result in a suspension to use the marks for one year and one day. 

Contrary to Mr. Roth's suggestions, CFP Board has been a leader in supporting the fiduciary standard.  We required it more than two years before Dodd-Frank became the law of the land. Beyond the actions we took requiring it for certification and re-certification, we have been on the leading edge of an effort to create a uniform fiduciary standard of care with more than 10 submissions to the SEC and Capitol Hill advocating this important consumer protection reform. 

In retrospect, Roth summed up his version of the case this way: "In my mind, this wasn't a close call. How could it possibly have been determined that the CFP acted in the best interests of the client? The only difference between this case and a broker without fiduciary duty is that at least the broker never claimed to be working in the client's best interests." Which led him to ask the question about the CFP Board's "fiduciary standard": "Is it merely an advertising campaign, or is it real?" 

Contrary to some of the comments found on Roth's blog, this is not a story about an "isolated case" or vilifying CFPs: it's about the CFP Board and its seriousness, not just about a fiduciary standard, but about actually regulating financial planners. Sure, this is just one case. But it's a really bad one. Lost complaints, confidential rulings, private censures?

The only really salient point that Mr. Keller raises here is that the infraction in question took place before the Board adopted a fiduciary standard. Fair enough, as far as it goes. But that raises at least as many questions as it answers: Why didn't the Board simply tell that to Roth, who had conversations with both Michael Shaw and Kevin Keller (secrecy is one of the problems here)? I suspect he might have dropped the matter.  Also, double dipping is unethical even for brokers, who aren't fiduciaries: so why would it be okay for a financial planner, who still had the duty to "put the client's interest first" even before the fiduciary standard? 

The sad truth, as revealed in the Dodd-Frank debates and in cases such as this one, is that the powers that be aren't going to take financial planners seriously until they start taking themselves seriously: which has to start and end with the "self" in their SRO.