After several alleged ethics violations involving some its members, the National Association of Personal Financial Advisors yesterday sent an open letter to its members reaffirming its commitment to upholding the group's ethical standards.

The Arlington Heights, Ill.-based membership organization was embarrassed last month when the group's past president, James Putman, along with another employee at his firm, Wealth Management LLC in Appleton, Wisc., were accused by the SEC of taking $1.24 million in kickbacks related to certain investments they made for clients.

Elsewhere, the SEC has charged Matthew Weitzman, an Armonk, N.Y., investment advisor and NAPFA member, with stealing more than $6 million in client funds for personal use, including from terminally ill and mentally impaired clients. Another NAPFA member, Julie Jarvis, a planner in Columbus, Ohio, was charged by the SEC with stealing money from elderly clients and using it to buy property in the Carribbean.

"Having several members accused of wrongdoing is providing us the motivation and drive to actively review our standards and to identify what we should do differently," read the letter.

"Our members are angry about it, and so are we," NAPFA national chair Diahann Lassus says in an interview. "We're all asking the question, 'Iis there something we can do differently?'"

These cases are a black eye for NAPFA, a fee-only group that holds itself out as a beacon of ethical probity. "I think it puts a stain on the organization, although it's probably only temporary because we'll deal with it quickly," says Lassus, who is president of Lassus Wherley, a wealth management firm in New Providence, N.J. and Bonita Springs, Fla. "But anytime you hold yourselves to a higher standard and some of your members are found lacking, people pay attention to that."

Lassus takes exception to published reports questioning the rigor of joining NAPFA, which currently has about 2,100 members. To attain membership, applicants pay $475, submit for review a recent comprehensive plan for a client, agree to offer comprehensive financial planning, and sign a fiduciary oath. Members also must complete 60 hours of continuing education.

"That's double the CFP requirement," Lassus says. Starting on January 1, 2010, all NAPFA members will be required to hold the certified financial planner designation.

NAPFA members discussed the problem in a closed session at last week's national conference near Washington, D.C. At this point, Lassus says, the organization is trying to put together concrete steps to help avoid future blow ups among its members.

"We want to do everything we can to educate members and help firms with employees to figure out the best ways to eliminate any potential issues within their firm," Lassus says.