The CFP Board extended a broad amnesty to hundreds of advisors who had been breaking its rules by calling themselves fee-only on the board’s website.
Last week the Board removed profiles of thousands of advisors at its web site who claimed to be fee-only. The move created an uproar because many (most? all?) of the advisors are in fact "fee only." The problem is that the CFP Board does not consider an advisor to be fee only if he is associated with an entity that charges commissions - for anything - even if the particular advisor does not use or recommend the commissioned product.
That definition makes it impossible for any advisor who is registered with a wire house to say he is "fee only." There has been no statement as to why the CFP Board created such an odd definition,and no explanation as to why it permitted thousands of advisors to state they were "fee only" when they were not, according to the Board's definition.
The entire mess came to a head when the Board unilaterally changed thousands of its certificants’ profiles -- removing “fee only,” regardless of the circumstances, and inserting “none provided” – it became temporarily impossible to definitively identify advisors based on their compensation. In addition, resetting the profiles without any forewarning also insulated the board from the prospect that it might receive thousands of complaints about rule-breakers.
The board made the changes on its website last week just hours after Financial Planning reported that 486 wirehouse advisors – and hundreds more at banks, insurance companies and other firms –were calling themselves fee-only against the board’s rules on its Find a CFP Practitioner search tool.
Seems to me that if anyone should be fined, it should be the CFP Board for misleading its own advisors with an odd definition and lax enforcement of that definition on its own web site.
For more information, see CFP Board Offers Broad Amnesty to Rule-Breaking Advisors