The Certified Financial Planner Board of Standards' "continually expanding role as a de facto private regulator" for CFPs creates "major regulatory, supervisory and reputational risks for the firms that employ" CFPs, according to a just-released white paper by the Securities Industry and Financial Markets Association.
There's a growing concern among financial services firms with the CFP Board's regulatory behavior, including "establishing separate rules, guidance and standards, conducting investigations, bringing enforcement actions, imposing sanctions, and publishing related information about CFP Certificants online," the white paper states.
Also troubling: Many of CFP Board's regulatory activities duplicate and conflict with existing Securities and Exchange Commission and Financial Industry Regulatory Authority rules, the white paper states.
"SIFMA and its members are committed to addressing and ameliorating the significant risks imposed by CFP Board's regulatory regime," Ken Bentsen, SIFMA's president and CEO, said Monday in a statement. "We look forward to working collaboratively with CFP Board, and the SEC and FINRA, to develop long-term workable solutions that benefit all affected parties."
CFP Board said Monday in a statement shared with ThinkAdvisor that it's reviewing SIFMA's recommendations.
"We will consider SIFMA's input as we have with all public comments on our ethics documents, including CFP Board's Procedural Rules, Sanction Guidelines, Fitness Standards and Code of Ethics and Standards of Conduct," a CFP Board spokesperson said.
The CFP Board gets its regulatory powers "through contract," Tom Sporkin, the board's managing director of enforcement, told ThinkAdvisor in a separate interview at the board's inaugural Connections Conference in Washington in early October.
