CFP Board’s Regulatory Regime for CFP Certificants

Dated: October 28, 2024

Executive Summary

The Securities Industry and Financial Markets Association (“SIFMA”) is comprised of hundreds of member firms that employ tens of thousands of individuals who hold the Certified Financial Planner (“CFP”) private certification (“CFP Certificants”) issued by CFP Board. SIFMA member firms employ a significant percentage of the total number of CFP Certificants, which currently stands at over 100,000. CFP Certificants provide a wide variety of products and services on behalf of their firms, and many serve as financial advisors to their firm’s clients in their capacity as a registered representative of a broker-dealer (“BD”) and/or as a representative of a registered investment adviser (“RIA”). CFP Certificants, and their firms, are subject to extensive regulatory oversight by the SEC, FINRA, and state securities regulators, among others, as well as the associated, robust standards of conduct imposed by those regulators.

Purpose

The purpose of this White Paper is to:

• document the growing concern of financial services firms with CFP Board’s self-created and expanding role as a de facto, private regulator of CFP Certificants by establishing separate rules, guidance and standards, conducting investigations, bringing enforcement actions, imposing sanctions, and publishing related information about CFP Certificants online;
• identify the various ways that CFP Board’s regulatory activities: (i) duplicate, conflict with, and/or impose obligations in addition to, existing SEC and FINRA rules, guidance and standards governing the advisory activities of BDs and RIAs; and (ii) create significant regulatory, compliance, supervisory, reputational, and third-party risks for the firms that employ or associate with CFP Certificants; and
• recommend specific courses of action that CFP Board could, and should, take to ameliorate and/or eliminate these risks for financial services firms, and also encourage the SEC and FINRA to address the risks associated with CFP Board’s regulatory activities, and provide appropriate regulatory relief and/or exercise regulatory forbearance in appropriate circumstances.

Key Recommendations

Some of SIFMA’s key recommendations to CFP Board include:

• Eliminate rules and standards that duplicate or conflict with SEC and FINRA rules and standards,
• Implement safeguards around CFP Board document and information requests to CFP Certificants,
• Provide additional notices to the CFP Certificant’s firm regarding CFP Board investigative and enforcement milestones, and other currently unreported events, and
• Give timely notice and copies to the CFP Certificant’s firm of any Firm Materials or Regulatory Materials produced by a CFP Certificant to CFP Board.