On behalf of all of us at CFP Board, I’d like to thank the thousands of CFP® professionals who took time to complete CFP Board’s first “Pulse” survey. The results of the pulse survey speak well of our work to help Americans chart a course to reach their goals. Results showed that 78 percent of the clients of CERTIFIED FINANCIAL PLANNER™ professionals are standing firm with their existing financial planning strategies. Many of those are also taking thoughtful steps to rebalance their portfolios and investigate investment opportunities amid the current market turmoil. As professionals who work with the intimate details of our clients’ finances, CFP® professionals have a unique perspective on the current economic situation, and I believe it is important to share the wealth of our collective experiences publicly.

I’d also like to thank the hundreds who have completed our Public Policy Questionnaire and shared their thoughts about public policy issues affecting the financial planning profession. Your feedback will be of great value in assisting our new Public Policy Council as they prioritize CFP Board’s advocacy work. Your input helps assure that their work will be informed by the diverse views within the CFP® certificant community. I know many more of you have good thoughts about important topics such as the future of regulation in the financial planning profession, and I hope you’ll share those thoughts through our Public Policy Questionnaire.

With the recent pulse survey and public policy questionnaire, CFP Board has offered CFP® certificants some very structured methods of providing feedback. Next month, you’ll have another chance to share your thoughts with CFP Board – on any topic of interest to you – during our second Business Update Webinar. The leadership of CFP Board’s 2008 and 2009 Board of Directors will be on hand to share updates on CFP Board’s current activities and future plans. And the Webinar will be presented in an interactive format with ample time for us to address questions from participants. We hope you’ll join us and participate in this important opportunity for dialogue between CFP Board and our valued stakeholders.

David G. Strege, CFP®
2008 Chair, Board of Directors
CFP Board

Contact CFP Board’s Board of Directors at BOD@CFPBoard.org.

It’s been a wild few weeks on Wall Street, to say the least. And all the financial turmoil has caused a mix of bewilderment, worry, anger, and panic on Main Street. What advice and reassurance can planners give to clients who may fear the worst for their portfolios, retirement plans, or education funds? A trio of CERTIFIED FINANCIAL PLANNER™ professionals share their tips for managing a practice during turbulent times.

“The first thing to do,” says Michael Kitces, CFP®, director of financial planning for Pinnacle Advisory Group in Columbia, Maryland, “is to acknowledge where the client is. It is scary. It is distressful. When markets are down so much so rapidly, it’s reasonable to feel fear. And it’s okay [for the planner] to acknowledge that. What the client does in response to the situation is separate. That is something the planner needs to help the client think constructively about.”

One of the most constructive things to do in a crisis — financial or otherwise — is to stay focused on the facts. Robert Glovsky, CFP®, president of Mintz Levin Financial Advisors in Boston and 2009 Chair-Elect of CFP Board’s Board of Directors, urges people to “go back to the goals. Clients need to keep in mind, What is the money for? Then do the analysis: How much is enough? If I don’t have enough, what do I need to do? Regardless of what’s going on in the market, the fundamentals don’t change. People still want to retire, to educate their kids, to have adequate insurance. In some ways, the fundamentals become even more important.”

Once the fundamentals are back in focus, the usual suspects come into play. If clients are looking at major expenses in the next few years — whether it’s for college, a home improvement or purchase, or retirement — that money shouldn’t be in stocks anyway. They should keep enough cash or other liquid assets on hand to cover a year’s worth of expenses or more.

Allocation is key, all three planners agree. If circumstances do dictate a change in strategy, then that change should be carried out dispassionately and always with the long-term goal in mind. But clients should also be careful not to become too conservative too soon, since many people could easily live for 30 years or more in retirement; they will need to ensure their money lasts for that entire period. For younger people with longer time horizons, it’s good to remind them that most of the money they will need in retirement isn’t even invested yet. This could be a great buying opportunity for them, though that is an argument some people might find easier to accept on an intellectual rather than an emotional level.

Glovsky also believes in the need to be straight with clients: “People are nervous about what’s happening, so you have to tell the truth. If you’re 70 years old, already retired, and have barely enough to get by on, this is going to affect you. If you’re 65 and planning to retire, you may have to work a little longer. If you’re 50 and looking to retire at 55, you may not be able to. Clients have to watch what is going on with the knowledge that they are investing for the long term, and they have to keep coming back to their allocation and their goals.”

The planner’s job is made all the more difficult by around-the-clock news coverage, which can help whip up a kind of irrational despondency about the future. Dan Candura, CFP®, president of the Massachusetts investment advisory firm PennyTree Advisors and a member of CFP Board’s Board of Directors, cites the stock price volatility of Vestas, a Danish manufacturer of turbines for wind energy, as a case in point. Vestas’ value plummeted during the turmoil along with the rest of the market, even though nothing about the company’s fundamentals had changed. “Why did that happen?” Candura asks. “Was there suddenly less wind?”

There is arguably a lot more wind during a financial crisis, a lot of it hot air blowing in from the media. That’s why Candura believes it’s vital for planners and clients alike to “Block out the noise. The value of the information purveyed by the media is often questionable. Stock declines are not unusual. They always go down faster than they go up, but the general creep is upwards.” Candura would urge clients not to stop investing, not to stop saving: “Ride it out and you’ll be among the people for whom it turns out fine.”

This is also a time, Candura suggests, when planners need to reach out to clients beyond fixed points of contact like the annual review. “Send an e-mail,” he says. “Pass on good information. Let people know you’re there. Clients are hearing from the media that the sky is falling, so they will need some reassurance. The real thing to fear is everybody panicking.”

According to Candura, the best advice for planners is to practice what they preach. “If you’ve got lots of panicky clients, it’s probably not only the clients’ fault,” he says. “Look at how you’ve talked to clients. What promises were made? What promises were implied? And what services can you provide now to mitigate this?”

Above all, he says, “Don’t sell performance. Asset allocation is boring; buy-and-hold is boring; continue-to-invest is boring. But planners should be selling a strategic approach that will help clients through good times and bad times. The real work lies in getting people prepared long before an event like this takes place. And when something like this does happen, ask the ‘So what?’ question. Does this change anything I’m doing? Usually, the answer is no.”

- James Geary

Download the FAQ on CFP Board's Revised Standards (PDF format)

CFP Board's revised Standards of Professional Conduct, which has an effective date of July 1, 2008 and an enforcement date of January 1, 2009, includes significant updates to the content and organization of the ethical standards for CFP® certification. But one section of the Standards publication looks much as it did before: the Disciplinary Rules and Procedures. Aside from a few changes in terminology, the Disciplinary Rules and Procedures retain the investigatory and disciplinary processes CFP Board has designed over the years to be fair to CFP® certificants and their clients, as well as credible to the public. As CFP Board’s Director of Professional Review, I wanted to share with CFP® certificants a bird’s eye view of CFP Board’s disciplinary process and what happens during disciplinary hearings before CFP Board’s Disciplinary and Ethics Commission.

CFP Board’s Disciplinary Rules and Procedures outline the procedures used by CFP Board’s Professional Review staff and Disciplinary and Ethics Commission (“Commission”) to review conduct by CFP® certificants, candidates for CFP® certification or “registrants” (individuals who have applied to reinstate CFP® certification) that may be in violation of the Code of Ethics and Professional Responsibility, Rules of Conduct and/or Financial Planning Practice Standards. When CFP Board becomes aware of such conduct, whether through disclosure on a certification application, discovery through routine background checks, or notification from a grievant or regulatory authority, CFP Board’s Professional Review staff notifies the CFP® certificant of the conduct under investigation and requests relevant information and documentation.

After a thorough investigation of the information and documentation in a specific case, Professional Review staff reviews the matter to determine whether there is probable cause to believe grounds for discipline exist. A majority of the cases that come to CFP Board’s attention are dismissed at this stage, as determinations are made that the assembled evidence demonstrates that the conduct at issue did not violate the Standards or that apparent violations do not rise to the level where discipline is appropriate. Investigations conducted under CFP Board’s Disciplinary Rules and Procedures are confidential, unless or until a public discipline is issued, and cases dismissed as a result of probable cause review remain private matters not disclosed to the public.

For those cases where a determination of probable cause is made, the individual under investigation (called the “Respondent”) is issued a Complaint that identifies the alleged violations of the Standards. Once a Complaint is lodged, the matter is scheduled for a hearing at the next available set of hearing dates. CFP Board staff and Commission members work together to arrange the hearing process for each group of hearings. Each year, hearings are scheduled over two-day periods in March, July and November. Hearings may run from one hour to two, and there can be up to four hearing panels meeting simultaneously during each hearing session.

A Hearing Panel of three members presides over each hearing. Each Hearing Panel includes at least two Commission members and up to one volunteer enlisted by the Commission to assist with a set of hearings. During the hearing, CFP Board staff counsel presents the facts alleged in the complaint, but neither prosecutes the case nor recommends to the hearing panel what action to take. The Respondent is given the opportunity to explain the situations related to the Complaint allegations, ask questions of CFP Board staff counsel, and answer any question posed by the Hearing Panel. Respondents may also choose to be represented by legal counsel and to introduce witnesses and evidence in their defense.

After all presentations are made and the Hearing Panel members have asked any questions they may have of CFP Board staff counsel and the Respondent, the Hearing Panel ends the hearing. CFP Board staff counsel and certificant or registrant are asked to leave the hearing room, and the Hearing Panel then begins to deliberate the case in private.

Following its deliberations, the panelists make a preliminary recommendation or decision to the full Commission. The Commission may vote to ratify, modify or reject the findings of fact and outcome recommended by the Hearing Panel. If the full Commission rejects the decision, it will decide on its own the outcome of the case. The Commission must decide the findings of fact and, if appropriate, the type of discipline to be imposed.

The Commission provides its decisions to CFP Board staff to finalize, but not alter, all decisions and communicate directly with the Respondent. CFP Board staff also handles all administrative and enforcement functions following the Commission’s decision.

If a discipline is imposed and the disciplined individual does not agree with the Commission’s decision, he or she can appeal the decision to the Appeals Committee, which is composed of members of CFP Board’s Board of Directors. The appeals process ensures that a separate body reviews the matter for deficiencies in the hearing process and allows the Appellant the chance to show that the hearing was clearly erroneous. The Appeals Committee does not review new evidence or evidence that was not allowed into the Commission’s hearing. The Appeals Committee has the power to affirm, modify or reject the findings of fact or disciplined imposed. It can also remand a case back to the Commission for further consideration.

CFP Board’s disciplinary process is involved and complex, with many opportunities for those under investigation to present responses and evidence, and with much deliberation by CFP Board’s staff and the dedicated professionals who serve on the Commission and Appeals Committee. To put the process in perspective, CFP Board staff opened about 1305 matters in 2007, and of those cases, only 72 matters went in front of the Commission. Of the 72 matters the Commission reviewed, seven certificants had their use of the CFP® certification marks revoked permanently, six had their CFP® certification suspended for some period of time, and six were publicly admonished. Those who find themselves involved in the process may find that it seems to move slowly, with cases typically taking between six months and a year to reach resolution. While CFP Board works to resolve cases as quickly as possible, our primary goal is to ensure that our investigations and hearings provide a fair and credible enforcement process for the ethical standards that are an essential part of the CFP® certification.

I hope this overview provides you with a general understanding of the disciplinary process CFP Board uses to enforce its Standards of Professional Conduct. While I haven’t cited the specific Articles that describe each part of the investigation and disciplinary process, the information I’ve provided here comes largely from CFP Board’s Disciplinary Rules and Procedures, and I encourage CFP® certificants to become familiar with that document. In coming months, I will share some trends CFP Board has noticed in actual cases that have gone through the disciplinary process in 2008, including brief case studies that illustrate the analysis involved in the Commission’s decisions. If you have questions about CFP Board’s disciplinary process or revised Standards, please contact us at standards@CFPBoard.org.

J. Barron Knight, Esq.
Director, Professional Review
CFP Board

About the Revised Standards of Professional Conduct:
On May 31, 2007, CFP Board’s Board of Directors announced the adoption of a revised version of CFP Board’s Standards of Professional Conduct, which sets forth the ethical standards for CERTIFIED FINANCIAL PLANNER™ professionals. The revised Standards become effective July 1, 2008 and apply to the more than 58,000 financial planners in the U.S. who are authorized by CFP Board to use the CFP® certification marks.

CFP Board Pulse Survey Results

CFP Board recently conducted a “Pulse” survey that questioned CFP® professionals about their views and the practices of their clients. Based on responses submitted online by 5,261 CFP® certificants, the survey found:

• Two thirds of financial planners have seen an increase in potential clients “as the turbulence with the economy has increased over the past several weeks,” with 27 percent reporting a significant increase and 39 percent a moderate increase.
• When asked what actions their clients are taking with their financial plans, 78 percent of respondents said “standing firm with existing strategies,” 57 percent said “reviewing asset allocation,” 48 percent said “reviewing financial goals,” 45 percent said “moving assets to lower-risk positions,” 40 percent said “taking advantage of investment opportunities,” and 37 percent said “rebalancing portfolio.”

Read more

Business Update Webinar, November 17, 2008

CFP Board invites you to attend our second Business Update Webinar on November 17, 2008 from 11:00 a.m. to 12:15 p.m. (Eastern Time). This informational Webinar is designed to update CFP® certificants and other CFP Board stakeholders on CFP Board's activities and key issues related to CFP® certification and give certificants an opportunity to ask questions and provide their input.

During the Webinar, David G. Strege, CFP®, 2008 Chair of CFP Board's Board of Directors, Marilyn Capelli Dimitroff, CFP®, 2008 Chair-Elect of the Board of Directors, and Kevin R. Keller, CAE, CFP Board's CEO, will provide updates on CFP Board’s recent and upcoming activities. Robert J. Glovsky, CFP®, 2009 Chair-Elect of the Board of Directors, will also review the experience requirement for CFP® certification, sharing insights from his participation on CFP Board’s Experience Task Force, and introducing recommendations made by that task force. CFP Board’s communications and consumer outreach initiatives will also be discussed. The Webinar will be presented in an interactive format and be hosted by Daniel Moisand, CFP®, 2008 Chair of CFP Board’s Disciplinary and Ethics Commission.

The free, informational Webinar (not for continuing education credit) will include time for questions and answers, and certificants are invited to submit questions prior to and during the program. Questions may be submitted in advance of the program through the registration process or via e-mail to webinars@CFPBoard.org.

Register to participate in CFP Board’s Business Update Webinar at https://www2.gotomeeting.com/register/924120539.

Public Policy Questionnaire

The current financial and political climate provides a potential window of opportunity for CFP Board to influence public policy. As CFP Board's new Public Policy Council begins its work to identify significant public policy issues that affect CFP® certificants and the American public and develop policy positions for consideration and adoption by the Board of Directors, this is also an excellent opportunity for CFP® certificants to help shape the direction of CFP Board’s public policy activities. To gather input from the CFP® certificant community on significant policy issues, we’ve assembled a short questionnaire designed to capture your thoughts on these important matters.

Interested certificants are invited to complete our online questionnaire, available at www.surveymonkey.com/s.aspx?sm=z0BDKNfuFgZSO1WwhDp_2bjw_3d_3d.

This questionnaire will remain open until November 1, 2008.

CFP Board signs MOU with MHNGS to Assist Military Families

CFP Board has signed a memo of understanding with MHN Government Services (MHNGS) to support the financial literacy and readiness of our country’s military personnel and their families through MHNGS-organized programs sponsored by the Department of Defense. These programs provide Personal Financial Counseling (PFC) services to help Active Duty, Guard and Reserve Service Members and their families address the financial challenges of military life and deployments. Counselors are screened and credentialed, and counselors are compensated for their services in connection with the PFC program. CFP® certificants may apply to participate as counselors in the program.

CFP Board will not share CFP® certificants’ contact information with MHN. As MHNGS schedules events at military installations across the country, CFP Board will notify CFP® professionals in the vicinity about the opportunity to participate, along with instructions on the MHNGS application process.

Forbes.com Adds CFP® Certificant Search

CFP Board has partnered with Forbes.com to offer a “Search for a CERTIFIED FINANCIAL PLANNER™ Professional” function on the Forbes.com Web site. The search function, which is identical to the search function available on CFP Board’s Web site, is available in the “Personal Finance – Adviser Network” section of the Forbes.com Web site and provides visitors to Forbes.com the ability to locate a CFP® professional in their area.

CFP Board Paper Award Presented at AFS Annual Conference

At the annual conference of the Academy of Financial Services, held on October 3, 2008 in Boston, MA, Kevin R. Keller, CFP Board’s CEO, presented the annual CFP Board paper award of $1,000 for the manuscript, Reality Check: The Implications of Applying Sustainable Withdrawal Rate Analysis to Real World Portfolios by Qianqiu Liu, University of Hawaii at Manoa, Rosita P. Chang, CFP®, University of Hawaii at Manoa, John H. Robinson, Hawaii Wealth Management, and Jack C. De Jong, University of Hawaii at Manoa.

“It’s important that financial planning professionals have access to rigorous academic scholarship and research related to current situations that impact the personal finances of the American public,” said Keller. “I am pleased that CFP Board continues to support this work through awards to individuals who make meaningful contributions to scholarship and research related to financial planning.”

CFP® Marks in the News

Viewers of PBS Nightly Business Report recently heard Joe Collum share “It's true anyone can call himself or herself a financial planner, so that doesn't count for much. Being a CERTIFIED FINANCIAL PLANNER[™ professional] carries more weight.”

US News and World Report provided its readers tips on “How to Find a Financial Planner,” including this guideline: “In general, an adviser should have the CERTIFIED FINANCIAL PLANNER[™ certification].”

Read these and more notable media references to the CFP® certification at www.CFP.net/certificants/marksinthenews.asp.

CFP Board continues its efforts to promote awareness of CFP® certification among media outlets and the audiences they serve. Those efforts are greatly enhanced by the many CFP® professionals who are engaged in their own efforts to reach national and local media with the message of the benefits of financial planning and working with a CFP® professional. We appreciate all of you who help further awareness of CFP® certification across the country through your media contacts and your involvement in your communities.

Accomplishments of CFP® Certificants

CFP Board congratulates the following CFP® professional on his professional activities and accomplishments:

Donald J. Settina, CFP®, President and CEO of Financial Service Standards, LLC, a national 401(k) training organization headquartered in Pittsburgh, for being honored with a 2008 Signature Award from the Profit Sharing/401k Council of America (PSCA). The annual PSCA Signature Awards recognize excellence in plan communication and investment education in 401(k) plans.

CFP Board welcomes information about the activities and accomplishments of CFP® professionals. If you have information you would like to share with CFP Board, please contact us at mail@CFPBoard.org.

• Ethics Webinar, November 5, 2008
• Financial Planning Clinic, November 15, 2008, Miami, FL
• Business Update Webinar, November 17, 2008
• Ethics Workshop for Compliance Officers, November 20, 2008, Chicago, IL
• 2008 Firm Meeting, December 5, 2008, Washington, DC

• Results of Pulse Survey: CFP® Certificants Share Views of Current Economic Situation
• Video review of recent Financial Planning Clinic in Washington, DC
• Updated Tax Tables for November 2008 CFP® Certification Examination

Final Preparations Underway for CFP Board’s Financial Planning Clinic in Miami

Miami-area residents will have an opportunity to discuss their financial questions and concerns with dozens of local CFP® professionals at CFP Board’s Financial Planning Clinic on Saturday, November 15. The goal of the free event, to be held from 11 a.m. to 4 p.m. at the Hyatt Regency at Miami Convention Center, is to increase public awareness of the value of CFP® certification and the importance of financial planning. The Clinic comes at a time when many consumers are concerned about their financial situation due to the recent economic uncertainty and volatility in the financial markets.

CFP Board’s Clinics are designed to give consumers an opportunity to experience the benefits of competent and ethical financial planning in a friendly, relaxed setting – that is free of sales pitches for any products or services. Attendees will be able to meet one-on-one with dozens of volunteer CERTIFIED FINANCIAL PLANNER™ professionals, attend 50-minute educational workshops on popular personal finance issues, and leave with experiences and materials designed to create an understanding of what financial planning and the CFP® certification are about.

At CFP Board’s September 13 Financial Planning Clinic in Washington, DC, hundreds of local consumers connected with more than 100 CFP® professionals who provided guidance on a host of financial planning issues. In a post-event survey, 100% of attendees found their experience so rewarding that they would recommend it to others, while 98% of volunteers stated that they would participate again. Volunteers said they truly enjoyed interacting with consumers from a diverse range of financial backgrounds. To view a short video of the event, visit the homepage of CFP Board’s Web site.

The Financial Planning Clinic in Miami is geared to appeal to a wide range of consumers who have a wide range of interests and concerns. Educational workshops will discuss introductory financial planning concepts such as living beyond paycheck to paycheck, as well as more complex issues such as estate planning and investment planning for retirement assets. All workshops will be presented by CFP® professionals who are experts in their fields. Select presentations will be available in Spanish.

Among the CFP® professionals who will present a workshop is Karen Greenberg, CFP®, president of Prosperity Life Planning, a not-for-profit organization based in Delray Beach, Florida, dedicated to teaching families of disabled children and adults ways to provide for a financially comfortable quality of life. Greenberg will offer strategies and planning advice to people who are caring for a family member with special needs and has developed her specialty while caring for her autistic son.

We appreciate the efforts of CFP Board’s stakeholders to help spread the word about this exciting event. If you know individuals in the Miami area who could benefit from attending the Financial Planning Clinic, please encourage them to attend. Information about the Clinic can be obtained through CFP Board’s Web site at www.CFP.net/clinic, by email at clinic@CFPBoard.org or by contacting CFP Board at 800-487-1497.

NEFE Grants Program: Orientation Conference Calls in November

National Endowment for Financial Education (NEFE) provides grants to help meet the financial education needs of Americans. Two conference calls have been scheduled for potential grant applicants to answer general questions about its 2009 grants programs, which require submission of a Concept Inquiry Form by December 2, 2008 or June 2, 2009. During these calls, NEFE Grants staff provides an overview of the process and responds to questions about the grant program guidelines. Although prospective grant applicants are not required to participate in these orientation calls, all are encouraged to take part in one of them.

Conference calls for NEFE’s latest grant cycles will be held on November 5 at 11:00 a.m. Eastern Time and on November 7 at 4:00 p.m. Eastern Time. Each call is expected to last no more than an hour. Those interested in participating in the conference calls must register at least 48 hours before the scheduled call. To register, visit the NEFE Web site.