A federal court has thrown out a lawsuit filed by a Florida couple against the CFP Board of Standards Inc. that centered on when financial advisors can use the term fee-only to describe their practices.
U.S. District Court Judge Richard J. Leon in Washington ,D.C., issued an order late Monday granting the CFP Board’s motion for summary judgment in the case and dismissing the suit in its entirety.
The long-standing controversy over the fee-only designation was brought to a head by Jeffrey and Kimberly Camarda, the owners of Camarda Financial Advisors in Fleming Island, Fla., who filed suit against the board for threatening them with administrative action for using the fee-only designation in their marketing material and on their website.
The couple also owns an insurance company that accepts commissions, which the CFP Board says disqualifies them from saying their advisory business is fee-only.
“CFP Board is very pleased that Judge Leon dismissed the case on the basis of deficient legal claims without the need for a trial. This ruling affirms CFP Board's authority to set and enforce its standards of professional conduct, which serve as critical consumer protections,” said Marilyn Mohrman-Gillis, managing director of public policy and communications for the CFP Board.
The CFP Board plans to issue a supplemental statement after reviewing the judge’s opinion, which is currently under court-ordered seal.
The parties have 14 days to submit motions if they wish to have all or part of the opinion remain sealed. If they do not, the order will be made public at that time.
The dispute over the fee-only designation erupted into a bigger controversy when other advisors, including former CFP Board Chairman Alan Goldfarb, became entangled. Goldfarb resigned from his position after the board accused him of misusing the fee-only title because he owned 1 percent of his firm’s broker-dealer, which accepts commissions.
The CFP Board acknowledged it had mishandled the problem and at one point removed the fee-only designation from its website and asked all 8,000 CFP designees to resubmit their income designations.
Neither Camarda nor his lawyer was immediately available for comment Tuesday. Camarda has said the firm stopped using the fee-only designation and tried to work out a settlement with the board.