The criticism at the luncheon was triggered by the Board's handling of DEC changes. On March 8, five of the nine DEC members resigned to protest changes to longstanding DEC procedures that were undertaken without their prior knowledge or consent. In particular, they objected to new procedures that give Keller oversight of the selection and election process of DEC members, as well as the decision to have a CFP Board staffer present when the DEC ratifies its disciplinary decisions. On May 20, the Board named five new members.
Previously, DEC chose its own members, who were approved by the CFP Board of Directors. Cases brought before the DEC had been open hearings with a CFP Board staff member presenting the case against the respondent (a CFP licensee or a CFP applicant). The DEC panel-traditionally comprised of CFP licensees-deliberated the case in private before it rendered a verdict.
In a letter this week to Financial Advisor magazine, Strege said he "wanted to set the record straight" so that any further news coverage reflects the facts. "CFP Board staff members will be present during the ratification meeting and not in the individual case deliberations and rulings. The staff will serve as a resource and to provide consistency, not to steer deliberations. The staff counsel who attends the ratification meeting will not be the same individual who presents cases on behalf of CFP Board before the hearing panels. In others words, staff won't be the judge and jury," Strege said.
"The ratification meeting occurs following the hearings, which are conducted in private by the Commission's hearing panels. Hearing panels have been and will continue to be comprised of unique combinations of three individuals. Rulings, to be fair to consumers and to certificants, require consistency. Building case law is a desired outcome that is dependent on more uniform interpretations," he added.
In a follow up meeting yesterday, Strege and Candura said the Board would solicit input from current DEC members on the changes, leaving open the possibility that the Board would reconsider its DEC decision. When it was noted that the only members left on DEC had little or no experience, Strege said he might consult with a larger group of practitioners when changes to DEC procedures are reviewed.