VOTE-Would You Retain a Bankrupt CFP® for Financial Advice?

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According to colleague and financial advisor, Mike Kitces CFP®:

As the difficult economic environment continues, bankruptcy filings in the United States continue to occur at an elevated rate.

And it appears that financial planners are having their share of bankruptcies as well … requiring the CFP Board via their disciplinary process to adjudicate whether a CFP® certificant should receive a public letter of admonition, or has his/her marks suspended or revoked. 

With a rising number of financial planner bankruptcies putting pressure on their disciplinary resources, the CFP Board has proposed a change to how it treats such bankruptcy situations. The upshot: a bankruptcy by a financial planner will no longer bar him/her from getting or keeping the CFP® marks. However, going forward, any bankruptcy by a financial planner will be publicly disclosed for the following 10 years on the CFP Board’s website.

Question: And so, as a doctor, nurse, management consultant or even another financial advisor, would you ever retain a Certified Financial Planner® who had declared bankruptcy?





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21 Responses

  1. Broke Doctors

    Maybe the doctors are broke precisely because they went to these CFPs!
    OR, the CFPs ate their own advice?

    Remember, no one cares about your money … more than you … No One!

    Dr. J.P. Clippers


  2. Hell no!



  3. Chubby Doctors Could Be Bad for Your Health

    Study finds they’re less likely to counsel heavy patients on weight.

    So, I would not go to a bankrupt financial advisor – and I would not go to a fat doctor for weight loss control. Seems like common sense to me.



  4. A Trade Organization?

    As one financial advisor said to me the other day, and I paraphrase him:

    The CFP Board’s Message is we are a trade organization who’s bureaucracy depends on membership increasing – not decreasing. So one might suspect this is about the Board’s revenue and not the integrity of the business.

    Disgusted CFP®

    Editorial Noteworthy: The commentator used the term “business”. He did not use the term “profession”.


  5. More on the CFP Board

    Dear Disgusted CFP®

    I read this somewhere in the blog-o-sphere, and I now also paraphrase:

    The CFP Board was born in sin, has lived in sin (remember CFP® lite) and continues to miss the mark (The Greek definition of Sin).



  6. New Bankruptcy Disclosure Procedure

    From the CFP Board of Standards, Inc.

    Dr. David Edward Marcinko MBA CMP™


  7. For the CFPs

    Dr. Marcinko – I just found this essay: How to survive bankruptcy

    Filing for Chapter 7 or Chapter 13 is a hard blow for most people, but it can be the first step toward a more financially stable future.



  8. 5 ways to avoid bankruptcy

    If your balance sheet is in the red, declaring bankruptcy may seem like your only option. Try these 5 strategies first to help get out of debt.

    Maybe all the bankrupt CFPs and FAs should read this essay.



  9. Does Bankruptcy Still Carry a Stigma?

    Bankruptcy is one of the most difficult financial events a person can experience, affecting your financial and emotional health.

    Why? A bankruptcy can stay on your credit report for up to 10 years after the filing date, which means that the impact of a bankruptcy can stay with you much longer than a missed credit card payment or even a foreclosure.

    But, does a bankruptcy also carry a social stigma that will follow you around? Even for CFPs?




  10. Bankruptcies Mar Disciplinary Records of Some CFPs

    More than 60,000 individuals hold the CFP designation, a mark of financial savvy, but some still have trouble managing their own money.



  11. CFP Board Implements New Bankruptcy Rules

    The CFP Board identified 112 advisors who have declared bankruptcy, but under new rules will not subject them to disciplinary action.

    Meanwhile, it reversed such actions against seven CFPs®.



  12. Are you … serious?


  13. Maybe Not?
    [Steven Wilkinson of Oakland, California]

    The Disciplinary and Ethics Commission determined that because Wilkinson filed for Chapter 13 bankruptcy in 2000 and Chapter 7 bankruptcy in 2012, he demonstrated what it described as “a continued inability to manage his personal finances.”

    The board revoked Wilkinson’s right to use the CFP® certification effective January 5th, 2014.



  14. Planners Unhappy Over CFP Board’s Bankruptcy List

    According to journalist C. Paikert: “There’s a lot of nuance that’s not reflected in simply listing personal bankruptcy,” says Mark Witaschek, whose bankruptcy was cited in a board announcement.

    Another Disgruntled CFP®


  15. Under Pressure – FINRA Moves to Expand Advisor Background Checks

    FINRA is moving to toughen reporting requirements for BrokerCheck, following revelations that hundreds of registered advisors have failed to publicly disclose personal bankruptcies, criminal charges and other potentially damaging information.



  16. CFP Finds the Upside to the Downside of Bankruptcy

    This Morgan Stanley CFP uses her bankruptcy to build bridges to her clients and hone her practice.

    Really — Say it ain’t so.



  17. CFP Board Names 19 CFPs With Bankruptcies

    Why are financial planners, of all people, declaring bankruptcy?

    Hospital bills, the real estate downturn and the related financial crisis drove the bankruptcies of some of the 19 planners who appear on the CFP Board’s most recent list of CFPs who’ve filed for relief for protection from creditors.



  18. Earl,

    Maybe these folks should have hired a financial planner … oh, right!



  19. CFP TV ADD

    According to the CFP Board new TV commercial and advertising campaign:

    When it comes to your financial future, you can’t just leave it to anyone. But, when you choose a Certified Financial PlannerTM professional you’ll know you’re in good hands. That’s because every CFP® pro is thoroughly vetted to uphold the highest standards of education, experience and ethics. It’s confidence and peace of mind you can’t get anywhere else.

    Now, define vetted?



  20. NOPE,

    For me at age 75, 90% cash and equivalents (CD’s) and 10% diversified stocks/mutuals/ETFs let me sleep at night with close to zero concerns.

    I’ve invested in the “market” since 1958 and don’t want to experience any more risk trauma, ever again.

    I’ve tried highly recommended CFP’s, etc and been VERY disappointed in their performance or more correctly, the losses they incurred.



  21. CFP Fiduciary – NOT?

    Ron Rhoades, a former NAPFA board member and head of the financial planning program at Alfred State College in Alfred, N.Y., says “many consumers may be under the impression, as a result of the CFP Board’s advertisements, that [its] certificants are trusted advisors when, in fact, many do not always practice in such fashion.”

    Rhoades has accused the board repeatedly of perpetuating fraud against consumers by creating this impression.



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