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Notice of Arbitration Decision

July 19, 2018

A CFP® professional filed an arbitration, in accordance with the Terms and Conditions of Certification, concerning a disciplinary action.  Information about the result of that arbitration is set forth below. 

CFP Board’s enforcement process is a critical consumer protection. CFP® professionals agree to abide by CFP Board’s Standards of Professional Conduct, which includes the Rules of Conduct.  CFP Board enforces its standards of conduct by investigating alleged violations and, where there is probable cause to believe there are grounds for discipline, presenting a Complaint containing the alleged violations to the Disciplinary and Ethics Commission (Commission) pursuant to CFP Board’s Disciplinary Rules and Procedures.  If the Commission determines there are grounds for discipline, it may impose a sanction ranging from a private censure or public letter of admonition to the suspension or revocation of the right to use the CFP® marks.  A CFP® professional may file an appeal, in which case CFP Board’s Appeals Committee of the Board of Directors issues CFP Board’s final decision.  In 2016, CFP Board amended the Terms and Conditions to allow a CFP® professional to file an arbitration concerning the final decision and for CFP Board to issue a public report about the arbitration that states which party prevailed and identifies the nature of the dispute including facts relating to the arbitration.

In December 2016, the Commission issued an order in which a CFP® professional (Respondent) would receive a Public Letter of Admonition.  The Commission issued its order after finding that Respondent communicated false and misleading information to clients or prospective clients when Respondent (1) represented Respondent’s compensation structure as “fee-only” on CFP Board’s Find a CFP® professional website, (2) used the term “fee-only” to describe his firm in the text box description of Respondent’s profile on CFP Board’s Find a CFP® professional website, and (3) used the term “fee-only” on Respondent’s firm’s website to state that the firm is a fee-only Registered Investment Advisor.  CFP Board determined that the “fee-only” description was false and misleading because Respondent, who was the owner and only employee of the firm, was licensed and appointed to sell insurance and received commissions from the sale of insurance, and was licensed by the Financial Industry Regulatory Authority, Inc., registered with an affiliated broker-dealer, and received brokerage commissions for the sale of securities products.  The Commission determined that Respondent’s conduct violated Rule 2.1 of the Rules of Conduct and provided grounds for discipline pursuant to Article 3(A) of the Disciplinary Rules and Procedures.  In May 2017, an Appeals Panel affirmed the Commission’s decision, and in August 2017, the Appeals Committee affirmed the Appeal Panel’s decision.

In October 2017, Respondent filed a Demand for Arbitration with the American Arbitration Association.  In June 2018, the panel issued its award, in which it found that neither party was the prevailing party under the Terms and Conditions.  The panel affirmed the Commission’s first finding that Respondent misrepresented Respondent’s fee structure, and reversed the Commission’s second and third findings because there was no evidence that Respondent’s firm made any false statements about its fee structure and Respondent did not have notice that Rule 2.1 prohibited the statements.  The panel remanded the matter to CFP Board to determine an appropriate sanction.