The Independent Task Force on Enforcement created by the Certified Financial Planner Board of Standards has issued a report that heavily criticizes the CFP’s enforcement program and related governance structure. The Task Force concludes that the CFP Board’s enforcement program is “not reasonably designed to ensure CFP certificants are held to an appropriate level of compliance.” The Task Force recommends that the CFP retain a dedicated Director of Enforcement, increase resources devoted to enforcement, undertake periodic audits, and enforce penalties. The Task Force also recommends several governance reforms. The CFP Board commissioned the Task Force to address gaps between public expectations and the actual operations of the enforcement program.
We laud the CFP Board for commissioning this Task Force to issue a public report this critical. However, this Report will cause big problems for the CFP Board and the industry. The CFP Board must take action to create a credible enforcement program or risk a diminution of its public perception. The industry can now expect the involvement of yet another supervisory body that can conduct audits and impose penalties.