Certified Financial Planner Board of Standards Inc

What it reported doing in 2024

Professional conduct, enforcement and legal: as a condition to certification, all cfp professionals agree to abide by cfp board's code of ethics and standards of conduct and predecessor versions (code and standards), which includes the practice standards for the financial planning process. The code and standards became effective on october 1, 2019 with an enforcement date of june 30, 2020, replacing cfp board's prior ethical standards set forth in the standards of professional conduct (standards) booklet. Cfp board formed a standards resource commission (src) to develop guidance for cfp professionals and their firms regarding the code and standards. The src began to publish guidance materials regarding the code and standards in 2018, and its work continued throughout 2024. In 2023, cfp board's sanctions and fitness commission completed its work offering revisions to cfp board's sanction guidelines and fitness standards and recommending to the board that those revisions be put out for public comment. With certain modifications, the board adopted the revised sanction guidelines and fitness standards in march, 2024 with an effective date of july 1, 2024. Cfp board has established a fair process for enforcing cfp board's code and standards (and the predecessor standards). This process is set forth in the procedural rules, which cfp board revised effective september 1, 2023.first, cfp board seeks to detect potential misconduct. Cfp board receives complaints (grievances) from consumers and other individuals, collects self-reported information from cfp professionals and candidates, and conducts background checks that involve a review of brokercheck, the investment adviser public disclosure database, state insurance and securities regulatory databases, and other public records to detect evidence of potential misconduct. Cfp board performs background checks on those seeking cfp certification, cfp professionals, and those seeking reinstatement of their cfp certification. In 2019, cfp board developed automated processes for reviewing these public sources, allowing it to continuously detect evidence of potential misconduct by cfp professionals. In 2024, these detection efforts resulted in cfp board staff opening 1148 investigations. Second, cfp board investigates potential misconduct. Cfp board provides notice to those who are under investigation, identifies the general nature of the investigation, and offers them an opportunity to respond. At the conclusion of the investigation, cfp board makes a probable cause determination as to whether grounds for sanctions exist. Cfp board enforcement department staff may issue a complaint that sets forth the grounds for sanctions, including a detailed factual description of the conduct and a specific statement of the alleged violation. The respondent has an opportunity to respond, to submit documents, to file motions, to produce and cross-examine witnesses, and to be represented by counsel at a hearing on the record. Third, when a respondent responds to the complaint, cfp board's disciplinary and ethics commission (dec), a peer-review body made up of cfp professionals and public members, adjudicates each matter and determines whether the respondent violated the code and standards, and if so, what sanction is appropriate. A three-person hearing panel conducts a review or holds a hearing, considers the evidence, and recommends to the dec whether to find that a violation has occurred and whether there are grounds for sanction, and, if so, the appropriate sanction. The dec then must review de novo and accept, reject, or modify the hearing panel's findings and recommendations. A respondent has the right to appeal an adverse decision to the appeals commission, a peer-review body made up of cfp professionals and public members, which issues the final decision of cfp board. Respondent and enforcement counsel also may agree upon a settlement offer, in the form of a proposed consent order, which a three-perso

Financial Efficiency

• Mission deployment rate: Limited
• Program expense ratio: Limited
• Fundraising efficiency: Limited

Transparency & Controls

• Consistency checks: 100%; rating input score 100; 68th percentile among comparable filings
• Pay-setting controls: 0 of 6 controls in place; rating input score 0
  • Compensation committee: Missing
  • Independent consultant: Missing
  • Other Form 990s reviewed: Missing
  • Written employment contract: Missing
  • Compensation survey or study: Missing
  • Board or committee approval: Missing
• Foreign activity oversight: Limited
• Grant itemization coverage: 100%; rating input score 100; 77th percentile among comparable filings
• Major donor itemization: Limited
• Related-party transparency: Limited

Accountability

• Independent voting board: 100%; rating input score 100; 77th percentile among comparable filings
• Governance controls: 9 of 9 controls in place; rating input score 100
  • Conflict-of-interest policy: Pass
  • Whistleblower policy: Pass
  • Document-retention policy: Pass
  • CEO compensation review process: Pass
  • Other executive compensation review process: Pass
  • Form 990 shared with the board: Pass
  • Board meeting minutes documented: Pass
  • Audit committee oversight: Pass
  • Independent financial-statement audit: Pass

Sustainability

• Operating margin: 3.4%; rating input score 49; 49th percentile among comparable filings
• Total-asset coverage ratio: 0.85; rating input score 34; 34th percentile among comparable filings
• Liabilities to assets ratio: 0.86; rating input score 15; 15th percentile among comparable filings
• Officer compensation ratio: 1.9%; rating input score 57; 57th percentile among comparable filings

Growth

• Program expense growth: Limited
• Revenue growth: 10.5% per year; rating input score 100; 79th percentile among comparable filings
• Asset growth: 3.8% per year; rating input score 100; 26th percentile among comparable filings