This is a column I included in my quarterly newslette to clients and friends.
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CFP Board – again
Just over a year ago, I started what
was to be a four-year term as a Commissioner on the Discipline and Ethics
Commission (DEC) of the CFP Board of Standards.
Having already completed a year of meetings as a volunteer, I knew the
territory and could not have been more pleased and excited to be a member of
the commission. My tenure there was
short-lived.
Last month, at the March hearings of
the Commission, I, along with four others of the nine member commission,
resigned in protest of actions taken by the Board of Directors of the CFP Board
of Standards. The immediate cause of the
mass resignation was a resolution, passed in violation of their own rules
requiring public comment periods for such actions, turning governance of the
DEC over to staff. For the entire
history of that body, the DEC (and its predecessor body the Board of
Professional Review) had been vested with the primary responsibility for
matters of ethics and discipline within the CFP® community. This event was another in a long line that
exhibits a system of governance marked by insularity, isolation, arrogance and
unbelievably poor communications. The
CFP Board has a long and unfortunate history of ill-advised initiatives. This is puzzling, given that the folks who
serve on the Board are almost universally really decent people who have records
and histories of service to the financial planning profession. There seems to be something in the water at
the CFP Board.
My first direct experience with the
CFP Board took place in January of 2003 when I was asked by NAPFA (National
Association of Personal Financial Advisors) to attend a Board meeting as an
observer at the invitation of the Board.
At that meeting the Board passed a resolution eliminating the election
of Board members (to rotating 4-year terms) by licensees / certificants
(holders of the right to use the CFP® marks).
This change was explained in part, ironically, by the desire to avoid
having a small minority exert too much influence over the mark. Now the board is entirely self appointed and
self perpetuated by the smallest minority: themselves, a body of twelve,
answering to no one. I attended board
meetings for the next 3 years as an observer, and during that time I saw the
proportion of “executive session” time increase to the point where the amount
of the meeting open to the public was insignificant. Now, it is my understanding that Board
meetings are no longer open to the public at all. Minutes of the Board meetings are not
published. In the past, Chairpersons of
the DEC and the Commission on Examinations were invited to Board meetings. About a year ago, even these folks were
disinvited. These are all part and parcel
of the process by which the Board has purposefully and consistently separated
themselves from any input from or official interaction with the population of
certificants.
In the middle of last year the Board
announced, without any prior consultation or conversation with interested
parties, that the organization would be moving to Washington, DC. In short order, the Denver staff were replaced by the new Chief Executive
with an entirely new staff hired in DC.
The reasons for the move have not been adequately explained to this
date, other than to simply state that in DC, the Board can be “closer to K Street”. Yet there has been no discussion or
conversation as to why it is necessary or even valuable for the Board to be
“closer to K Street”.
So, what is it in the water at the
CFP Board. What is it that causes the
board to operate in self-imposed bubble?
Why does a continuously changing group of highly accomplished,
well-meaning, and highly respected people consistently make such curious and
apparently obtuse decisions? It’s hard
to know since they won’t tell anyone what they are thinking. We’re left with conjecture. The unfortunate fact is that when the Board
goes to such lengths to operate in secret, it fosters a profound distrust among
the “governed”.
One place where the board clearly
goes wrong is in thinking that it is through their efforts that the CFP marks
have been so successful. It is not. It is through the efforts of the 55 thousand
certificants who meet with, care for, and interact with their clients that the
marks have become respected. And if the
55 thousand were not, for the most part, doing excellent work for their
clients, nothing the Board could do would be of any significance. Of course, the Board does have a
responsibility of stewardship of the marks, since the Board, as a non-profit
corporation, is the legal owner of the marks.
The Board seems to regularly overlook the fact that the marks have value
only because of the efforts of the 55,000.
It may or may not be possible to
change things now. But it seems to me
that when it comes to evaluating the Board’s work, it is obvious that the Board
themselves cannot be the ones in charge.