Prominent financial planners criticized the CFP Board at a luncheon this week for its lack of communication, not only when it made changes that led to the resignation of key members on its disciplinary commission but on other matters as well.
Planners complained that the Board makes too many decisions in secrecy, often without enough input from CFP certificants who will be affected by their actions. The Board's recent changes regarding its Disciplinary and Ethics Commission (DEC) were one case in point, they said.
The criticism came at a luncheon session Tuesday hosted by CFP Board CEO Kevin Keller, Board of Governors President David Strege and Board member Daniel Candura during the 2008 FPA Retreat.
Strege told planners that the Board's mission is to "benefit the public" based on its charter as a 501(c)-3 organization. Jay Shein, CEO of Compass Financial Group in Deerfield, Fla., replied that the Florida Bar Association is structured as a 501(c)-6 organization, with a mission to serve its member stakeholders, and that consumers still had confidence in the Bar. Shein went on to complain that no CFP licensees had any knowledge of the DEC changes until after the fact.
Strege told the crowd that the Board would try to do a better job communicating in the future, but some licensees were not reassured. "Dave, I've known you a long time. I have a lot of respect for you and I believe what you're saying," said Former FPA President Roy Diliberto, chairman and CEO of RTD Financial Advisors in Philadelphia. "But this lack of communication has been going on a long time. I don't think it's going to end; it just keeps happening and happening, and somehow it has to stop."
Elaine Bedel, a past chair of the CFP Board and president of Bedel Financial Consulting in Indianapolis, pointed out that previously the Board of Governors' meeting minutes were made public immediately following a meeting. That is no longer the case. Barry Kohler, an advisor with BDMP Wealth Management in Portland, Me., noted that in the past, Board meetings were open to the public and the profession; now they're closed.
Guy Cumbie, former FPA president, said that in his opinion, the communication issue is a symptom of a larger problem, not the problem itself. Cumbie, founder of Cumbie Advisory Services in Fort Worth, Texas, said that there was something fundamentally wrong institutionally when an organization such as the CFP Board continuously promulgates policies that are at odds with the beliefs of its licensees.
Cumbie suggested that the CFP Board would be better served if it stopped trying to benefit the public by protecting it from CFP licensees, and instead tried to benefit the public via CFP licensees.
Kirk Francis, CEO of Cross Financial Services in San Antonio, Texas, said fiduciary standards preclude an advisor from making client decisions in secret and without input. So why, he asked, doesn't the CFP Board follow those principles?
"I think it's totally insane, and it scares me down to my heart, to have the staff appointing the members of the examination and disciplinary councils. That is the Board of Governors' responsibility, and they have no right to abdicate it," said Harold Evensky, past chair of the CFP Board and president of Evensky & Katz Wealth Management in Coral Gables, Fla.