A letter to share:
BEEN THERE, DONE THAT
A Recent History of the BOPR
I served on the CFP *Board of Professional Review (BOPR) from Jan 2003 through December 2006. I served on the Associate Board of Professional Review from Jan 2000 through December 2002.
I pray that this letter will help those who have not served to better understand how the current DEC has functioned, why it has worked so well in the past, why what isn’t broken should not be fixed, and finally, why the proposed changes to the operation of the DEC will be detrimental to the public.
How the process begins
When a CFP® certificant or candidate for CFP® licensing has a formal complaint filed against him/her, a case is opened by the staff at the CFP® Board of Standards. The complaint may be self disclosed at the time of license renewal or original license application; it may be discovered by the CFP® Board by random audit or press information; it may be reported by another professional, or it may be reported by a client. At the time the case is opened, the CFP ® professional or candidate investigated becomes the Respondent. The staff is charged with the responsibility to determine if there is probable cause that an infraction of the CFP® rules of disciplinary procedures or ethics code has been violated. If no probable cause is determined, the case is dismissed. The respondent is notified in writing of the staff’s decision. If probable cause is determined, the respondent is notified in writing that his/her case will go before a formal hearing process before the CFP® Board of Professional Review, (BOPR), now known as DEC (Disciplinary and Ethics Commission).
The Associate Board
In 1999 an Associate Board was created to determine probable cause. The Associate Board was made up of CFP® certificants who had been through the disciplinary hearing process and served on disciplinary hearing panels. Several times a year, materials representing preliminary respondent cases were sent to Associate members who , after receiving them, agreed upon a time to have a conference call with two other Associate members. (Telephonic Inquiry hearing) The materials were prepared by the Board of Standards staff and included the complaint against the respondent, and information sent in by respondent to support his/her case. On the conference call were three panel members who either decided to dismiss the case for lack of probable cause that a violation had occurred, or find probable cause and send it forward for the Board of Standards to prepare a case for the BOPR to hear at a later date. The Associate Board existed for four years. After this time, a decision was made by the BOPR and the Board of Governors to disband the Associate Board. Reasons given, as I understand, were that the Board of Standards staff had become more proficient and knowledgeable, having less turnover in staff and more experience by then, thus able to determine this step at the staff level. Also the costs of reproducing and mailing materials were burdensome for the staff, and the extra step created an unreasonable delay for respondents from the time the complaint had first been made to the time the complaint reached the hearing panel stage for decision by the CFP ® Board of Professional Review. Thus, the Associate Board was discontinued at the end of 2002.
Board Member Selection and Terms
The BOPR (now the DEC), is made up of nine CFP® certficants who have had extensive professional experience, usually at least ten years, differences in practices and geographical locations. Some BOPR members are self employed, while others are employed by small independent firms, and still others at large firms. Some have commission-based practices; others are fee-only, and some are a combination of both. Some have broker dealers, others do not. Some are Registered Investment Advisors, others not. At least one of the members usually has a law degree and/ or a CPA credential. The outgoing chair and incoming chair also give consideration, ( statistics supported this), to having both male- female representation, and potential members who could round out the board by having different types of expertise such as specialized knowledge of investments or insurance matters.
The board terms have evolved to be four years, staggered, so that new members come on each year as older members’ terms expire. Each new member has served as a volunteer on hearing panels prior to being recommended for the BOPR. CFP® certificants submit their names and resumes to the CFP® Board for consideration as a volunteer. After serving as a volunteer, current BOPR members evaluate strengths and potential for consideration as a future BOPR (DEC) member. (I did not know anyone on the governing board or the BOPR when I first volunteered.)
The Hearing Process
If probable cause for violations are found, the respondent is notified that his/ her case is going before the hearing panel. He/she pays a hearing fee, and decides whether to appear in person at the hearing site, have a telephonic hearing, or propose a settlement offer. Hearings are held three times yearly. A staff attorney is assigned to represent the CFP® Board against the respondent. Case materials are prepared by staff and sent out to board members and volunteers three to four weeks in advance of hearings for study. The nine BOPR members and four volunteers make up hearing panels. Hearings have historically occurred over 1 ½ days, with the non-board members arriving a day early to go through an orientation and mock hearing. Hearing panels consist of three people: two BOPR members and one volunteer. Four hearing panels occur at the same time in concurrent conference rooms at the hotel hearing site. When respondents participate in the hearings at a telephonic or personal appearance, the room is equipped with a court reporter, staff attorney, (who presents the case to the hearing panel,) and paralegal, in addition to the hearing panel. Any visitors must ask the respondent permission to be present. Respondents may have attorneys or witnesses, if prearranged. At the end of the hearing, after the case has been heard, the respondent is told he/she will be notified in writing within 30 days of the BOPR decision, and that they have the right to appeal the decision. The hearing panel then clears the room, going into closed discussion to consider the facts and testimonies heard by both sides. When a majority of the three panel members agree on a decision and appropriate discipline, when applicable, a decision sheet is completed. In a proposed settlement offer, (the respondent is not present), the hearing panel convenes in a private room to discuss and consider the facts surrounding the settlement offer. The panel may decide to accept the offer, make a counter offer, or reject the offer proposed. Again, the decision sheet is prepared when a majority agrees on a decision.
The process is a peer review process, with the peer review not ending with the completion of the decision sheets. After the hearing panels all complete their morning cases, the full BOPR and the four volunteers meet to give a summary of cases heard. This is called the Ratification process.
The Ratification Process
Ratification has historically been a closed-door session, attended only by BOPR Board members and volunteers. Each hearing panel presents a summary of each case, one by one, to the board members and volunteers. After discussion and questions, board members vote to ratify the decisions made earlier by the hearing panels, case by case. A majority of the board present is needed to finalize the decision. Presentations are lively. Board members with respective professional experiences add valued comments. Disagreements often respectfully ensue. If a dissent among votes occurs, the original panel members must leave the room to change their decision or come up with stronger reasons to make their original decision stand. This process is repeated after each set of hearings, until all decisions are final and submitted to the CFP® Board. The CFP® Board staff sends out decision letters to the respondents, who, as stated earlier, may appeal the decision to the Board of Appeals, made up of members from the Board of Governors (Board of Directors).
Recent changes made by the Board of Governors
The Board of Governors recently voted to make changes in the entire process. The year I completed service, decisions were made to change the names of the BOPR to the DEC, and the Board of Governors to the Board of Directors. The proposed new changes would probably allow (if not require), a non CFP® certificant to serve on the DEC ], the CEO (not the Board of Directors or DEC), to appoint the DEC members, staff to be present during the decision and ratification process, and a process which seems to be leading to more settlement offers proposed and accepted by staff members, bypassing the DEC.
My Comments
Apparently, the Board made these changes to the DEC to help make decisions (outcomes) more consistent. However, the BOPR was constantly evolving to improve consistency. Standards were set in the last few years by which certain violations found were automatically a public censure, instead of a private. If the hearing panels found that violations occurred, a decision of dismissal could not be rendered, so that the gap of inconsistency could be narrowed. The statistical results of reports provided by staff after every set of hearings were constantly improving as to how many appeals were filed , and fewer cases were being overturned by the Board of Appeals.
One reason given for increased responsibility given to staff in previous years was their tenure and increased experience in dealing with CFP® licensee complaints. Yet, now, all staff is new to the disciplinary process and procedures. The CEO does not have a CFP® certification nor the experience of being in a CFP® practice to know how to select DEC candidates. One particular hearing comes to mind which makes me cringe to think that staff members are making the decisions to dismiss complaints. A respondent proposed a settlement offer for an aggregious complaint. Included in his materials submitted, intended as a defense for himself, was a statement of confession that this was not his first time before the CFP® Board. He had a complaint dismissed some months earlier by a CFP® Board staff attorney which never came before the BOPR. It was for an offense that would have automatically been a public discipline if it had been heard and preponderance of evidence pointed to violations.
On one occasion when I was present, the BOPR had two volunteers who were not financial practitioners. Their lack of knowledge and preparation was evident by the awkward and elementary comments and questions directed to the respondents.
In my opinion, the decision made by the Board of Directors to have a staff member present in the room during panel decisions or ratification process entirely negates the impartiality of the hearing process. Remember, it is the CFP Board® staff , after all, who brings the case against the respondent. How can any decision made under these circumstances be considered as impartial or fair?
Many hours of preparation and expertise are necessary by BOPR (DEC) members and volunteers before each hearing to understand and consider the circumstances of each case. Years of trial and error experiences have caused the BOPR (DEC) to be what it has evolved to be. Every Board of Directors member and other volunteer who have been through the experience of serving on a hearing panel has had a testimony of praise and admiration for this process. Expecting inexperienced staff and non licensed volunteers to reinvent the disciplinary process makes no sense at all.
I continue to pray that the Board of Directors come to their senses. The procedures and processes that evolved over the past 10 years or so are good ones.
Indeed, the Board’s own revised version of its Disciplinary Rules and Procedures, effective July 1 of this year, states in Article 2.1 that “CFP’s Disciplinary and Ethics Commission…is charged with the duty of investigating, reviewing and taking appropriate action with respect to alleged violations of the rules of conduct and alleged non-compliance with the Practice Standards as promulgated by the CFP Board and shall have original jurisdiction over all such disciplinary matters and procedures.”
This is how the BOPR has always successfully performed its duties; please rescind your decisions and give the DEC back the authority to carry out its job!
Sincerely,
Debby Vinyard, CFP® (Connett)
* Board of Professional Review, affectionately known as BOPR, underwent a name change to the DEC (Disciplinary Ethics Commission) by decision of the Board of Governors, who also changed their name to the Board of Directors. The terms BOPR and DEC refer to the same entity, and Board of Governors, (BOG) and Board of Directors are also the same.