The hard line that the CFP Board is adopting with bankrupt CFP licensees is a sign of the profession's increasing maturity.

The last five years have challenged tens of millions of Americans financially, and financial advisors have hardly been immune to the Darwinian economy. So it shouldn't be surprising that more than a few advisors have been forced to file for bankruptcy.

The CFP Board requires licensees to disclose, at the very least, any bankruptcy filing when they renew their licenses. If the advisor is not under investigation for any other conduct, the CFP Board notes the filing on the public profile page of the organization's Web site. It also shames those advisors in the public square by sending a press release to both national and local news media.

While a financial advisor filing for Chapter 11 in Tucson is unlikely to pique the interest of editors at The Washington Post or Wall Street Journal, it might just attract the attention of a local newspaper in an advisor's backyard, where it hurts. The Board's move struck me as similar to the draconian bankruptcy laws of Ireland, where any individual who goes belly up gets mentioned in both national and local media.

It also stands in striking contrast to how other professions treat bankruptcy. Early this year, the giant New York law firm of Dewey & LeBoeuf went bankrupt, largely as a result of overpaying to acquire several law firms with debt just before the financial crisis struck. Some former partners may yet be prosecuted for misappropriation of the firm's funds. In the meantime, many former partners are doing what lawyers do best-suing each other.

I suspect the CFP Board believes that someone whom the public entrusts with their life savings ought to be able to manage his or her own finances, or at least avoid bankruptcy. All other things being equal, an advisor experiencing financial difficulties is more likely to take an action that isn't in a client's interest when handling that person's money. More than a few broker-dealer executives have told me privately that when they suddenly see a rep selling more high-commission annuities than usual, they immediately conduct a credit check.

The sad truth is that when a bankruptcy surfaces, other problems are often right behind. Financial advisors know the inner plumbing of the financial system better than ordinary Americans, so often they are more adept at juggling debts. Where there is one bankruptcy, there could soon be another, or something worse.

But while the public has a right to know if their advisor is bankrupt, there are also legitimate reasons not to get too sanctimonious about this subject. Millions of Americans are living under financial duress. Some of today's top advisors privately concede that when they started their businesses, they, like many entrepreneurs, maxed out their credit cards and found themselves not far from the debt abyss back in the 1980s or early 1990s. Having had a near-bankruptcy experience themselves decades ago could help them relate to clients suffering through hard times today. It's a fine line.