Last year, the CFP wiped out the compensation model for all certificants because of concerns about misinformation by some who checked the “fee-only” box when they should not have. So rather than have CFPs selectively make the change on their own, the CFP Board preferred a “redo” for everyone. Now, they have sent a letter to all 70,000 CFPs announcing a new investigation process to identify those who inaccurately disclosed their compensation model.
The investigative process will include a combination of random selection plus use of publicly available information from social media, advisors’ websites, licensing data, ADV forms and Google.
The controversy began when the CFP Board’s chairman and three other Board members departed after being sanctioned for failing to comply with the compensation model criteria, as well as a pending lawsuit by Florida planners Jeff and Kim Camarda that is still pending. Some people have criticized the CFP for taking wholesale action, while others question how the fee-only criterion is being applied. In one case, an advisor owns a portion of his brother’s real estate business and receives a dividend — yet that could prohibit him from being listed as fee-only. The National Association of Personal Financial Advisors (NAPFA) allows members to be considered fee-only if they own up to 2% of a company that receives commissions.
