As of this writing, Jim Putman, CEO and majority owner of Appleton, Wisc.-based Wealth Management Inc., is an innocent man. I say this not because he once gave me a ride to an airport after an industry event (more on this later), or because one of our writers once quoted him.

Instead, it's important to remember that under the American system of justice one is innocent until proven guilty. Until our justice system embraces another doctrine, like France's Napoleonic Code, which sometimes holds that accused are guilty until proven innocent, he should enjoy the same rights as any other citizen charged with violations of civil (not criminal) law.

That said, being charged with taking $1.24 million in kickbacks to invest clients' money in a variety of partnerships containing risky investments like a water company, an oil production company, insurance-related contracts, real estate and other illiquid debt vehicles, after telling clients their funds would be placed in investment-grade debt securities, looks downright awful.

For his part, Putman has issued a statement expressing disappointment with the SEC's action while pledging to "continue to work cooperatively with them and [anticipating] a prompt and favorable resolution of these issues either through discussions with the SEC or the judicial process."

A review of the charges and other reports about Putman's partnership reveals a number of destroyed financial lives. According to the SEC's litigation and reports in The Milwaukee Journal-Sentinel, Putman has reportedly told some clients their investments in six partnerships, which his firm collectively valued at $102 million last year, are virtually worthless. The list of clients reportedly includes an Alzheimer's patient.

Putman's problems couldn't come at a worse time for the financial planning community, given that Washington, D.C. currently is considering remaking the entire regulatory landscape, starting at the top with the Federal Reserve Board winding its way down to self-regulatory organizations. Putnam was a former president of Napfa, having served in 1996 and 1997. As such, he can be viewed as a leader of the profession, even if he wasn't particularly active in recent years.

As noted earlier on this blog, financial advisors have enjoyed a nearly pristine image over the past 15 years as many folks, myself included, have bought into the concept of independent advice. In both the trade and consumer press, that philosophy has resonated, and understandably so.

Moreover, until a few month's ago, there were few reasons to challenge the seemingly pro-consumer agenda of Napfa, the FPA and CFP Board. A few bad apples shouldn't spoil the whole bunch, but this year the SEC has managed to bring charges against more than a dozen investment advisors, some of whom  agreed to settle the charges, albeit without denying or admitting to them.

The lack of such cases, coming after years of only a few arbitration cases involving investment judgment rather than misappropriation of clients' funds, may have lulled financial planning's leadership into an insular view that they were the lone point of light in a virtual sea of financial services darkness. I remember seeing thousands of attendees applaud at an FPA conference as Ben Stein obsequiously thanked both them and God for advisors doing the lord's work.

Confronted with so many cases of alleged fraud in such a short space of time looks awfully suspicious to many advisors. But the time for serious discussion is now. In chat rooms and other conversations, it would seem that some advisors think that Putman and others accused of misdeeds are simply victims of the SEC's Mary Schapiro and FINRA's Richard Ketchum cynically carrying the ball for a regulatory agenda of wirehouses who have paid them so well.

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