The Certified Financial Planner Board of Standards said Thursday that it has revised the terms and conditions of holding the CFP mark to include a new mandatory arbitration process.
Leo Rydzewski, CFP Board's general counsel, announced the changes on a call with reporters at 2 p.m. Thursday, and the newly updated terms and conditions were delivered to CFP holders at 3 p.m.
The terms and conditions take effect on May 2, and "will be binding for all current and existing" CFPs, Rydzewski said.
In updating the CFP Board terms and conditions, which Rydzewski said hadn't been done in a decade, CFP Board concluded that arbitration "is the most appropriate forum for what amounts to a fourth level" of disciplinary review. Arbitration, he said on the call with reporters, "is private, quicker and may be less costly than litigation in court."
According to the new terms, arbitration occurs only after there have been three levels of review of a CFP professional's alleged conduct:
- CFP Board Counsel's review of the allegations of misconduct;
- The Disciplinary and Ethics Commission's peer review of the allegations set forth in the complaint; and
- The Appeals Committee of the Board of Directors' peer review of decisions by the Disciplinary and Ethics Commission.
Rydzewski said on the call that he was "not aware of any individual seeking a fourth level review" at this time.
